In this guide, we provide a brief outline on setting up a registered foreign company in Australia.
If a foreign company wishes to carry out business in Australia but does not wish to incorporate a separate Australian entity to manage its Australian operations, a registered foreign company would be a suitable choice.
Let’s jump right in.
What is a registered foreign company in Australia?
A registered foreign company in Australia is not a separate legal entity from the parent company. In practice, this is similar to establishing a representative office or branch of a foreign company in another country.
The foreign company can register directly with the Australian Securities and Investments Commission (ASIC).
Steps of incorporating a registered foreign company
There are 3 key steps to setting up a registered foreign company in Australia.
Step 1: Ensure the name you wish to register is available
The ASIC website has a business name search tool that you can use to check if a business name is available.
A business name cannot be used if it is reserved by another entity, currently in use, or is deemed by ASIC to be unacceptable or misleading (see Schedule 6 of the Corporations Regulations 2001 for specific details).
If the desired name is available and you wish to reserve it to prevent others from adopting the name while you are organising your registration, you can do this by filling out Form 410 – Application for Reservation of a Name.
If approved, the name will only remain valid for two months, so it is imperative that it is then registered in a timely manner.
The fee for reserving a name is AUD 51.
Step 2: Complete the relevant application form and compile accompanying documents
Form 402 – Application for Registration as a Foreign Company must then be completed in order to register the foreign company.
A number of documents must also be lodged along with Form 402, including:
- A certificate from the company’s governing body in its home jurisdiction that confirms the company is registered. This certificate must be dated no earlier than three months before lodgement with ASIC.
- A certified copy of the company’s constitution (certified by the ASIC, a notary public or a company officer with a duly certified affidavit)
- A completed Form 418 – Memorandum of appointment of local agent.
- A memorandum stating the powers of certain directors. If the directors listed in Form 402 include resident directors in Australia, or if there are members of a local board of directors, the company must lodge a memorandum stating the powers vested in those directors.
Step 3: Lodge the form and accompanying documents with the prescribed lodgement fee
Form 402 and the supporting documents must be submitted to the following address:
Australian Securities and Investments Commission
PO Box 4000
Gippsland Mail Centre VIC 3841
The cost of lodgement of Form 402 is AUD 506.
Once the application is processed and approved, the ASIC will issue an Australian Registered Body Number (ARBN) which is a unique, nine-digit code. This is similar to an ACN (Australian Company Number), but specifically to registered foreign companies.
ASIC can take up to 28 days to process an application to register a foreign company.
Once the foreign company is registered with ASIC and has an ARBN, there are a number of post-registration obligations that the company must comply with.
Appoint a local agent
At all times, a registered foreign company must have a local agent.
By definition, a local agent:
- Is answerable for the doing of all acts, matters and things that the foreign company is required to do by, or under, the Corporations Act
- Is personally liable for a penalty imposed on the foreign company for a contravention of the Corporations Act if a court or tribunal hearing the matter is satisfied that the local agent should be so liable
Form 418 is used to initially appoint the original local agent, as well as to appoint new or replacement local agents. Form 404 – Notification of Change to Agent of a Foreign Company must also accompany Form 418 when appointing a replacement local agent.
Local agents act as a representative of the foreign company in Australia and are able to lodge ASIC forms on behalf of the company.
Display company name
A registered foreign company must display its name in a conspicuous position and in legible characters outside every office and place of business in Australia that is open and accessible to the public.
It must also display its place of origin, the words registered office at its registered office, and the word Limited or Ltd, or a notice that the liability of its members is limited, if that is the case.
Correctly use ARBN
There are strict guidelines regarding the use of the registered foreign company’s ARBN.
In summary, it must be displayed in legible characters in company correspondence, along with the words Australian Registered Body Number or ARBN.
Lodge a financial statement
Registered foreign companies must lodge financial statements with ASIC annually (at intervals no longer than 15 months).
Financial statements comprise a balance sheet, profit and loss, and cash flow statement, any other documents the company is required to prepare by the law that applies in its home jurisdiction (such as an audit report), and Form 405 – Statement to Verify Financial Statements of a Foreign Company.
The lodgement fee is AUD 1,260.
Financial statements must be lodged in original, hard copy format.
For companies exempt from lodging a Form 405, a Form 406 – Annual Return of a Foreign Company is required to be lodged for the same fee of AUD 1,260.
Notify ASIC of Other Changes
Registered foreign companies must also notify ASIC of the following changes:
- Change of name, constitution or powers of local director (Form 409)
- Change of Registered Office address or opening hours (Form 489)
- Change in directors (Form 490)
- Ceasing business or winding up (Form 407)
Setting up a registered foreign company in Australia is the option foreign companies should choose if they want to have a presence in Australia without establishing a separate entity. The registered foreign company can be registered with the ASIC, making the process straightforward. Do not hesitate to contact Acclime for advice.