Establish your overseas company branch in Australia: a step-by-step guide

A branch business is an extension of a foreign company that operates in another country without forming a separate legal entity. It allows the parent company to conduct business directly in the Australian market while maintaining control and responsibility for the branch's liabilities. Establishing a branch in Australia is often an ideal choice for businesses looking to expand their global reach without setting up a subsidiary.

By Ro Elvinia

To open a branch in Australia, foreign companies must meet specific regulatory and compliance requirements under the Australian Corporations Act 2001. The following guide outlines the step-by-step process to establish an overseas company branch in Australia and ensure compliance with all regulatory requirements.

1. Acquire a Director Identification Number (DIN) for all directors
One of the fundamental steps in setting up a branch of your overseas company in Australia is ensuring that all directors, even those who are based overseas, obtain DIN. This unique identifier is issued by the Australian Business Registry Services (ABRS), a government body responsible for managing and maintaining the national business registers in Australia and is mandatory for all directors of companies registered under the Australian Corporations Act 2001, the law that governs the registration, operation and regulation of companies in Australia, including the establishment of overseas branches. The process requires non-resident directors to provide one primary and one secondary identification document and apply through a paper application.

Foreign or non-resident directors are compliant once they apply for a DIN, even if it has not yet been issued. The ABRS advises that issuing DINs to foreign directors may take 3 to 12 months. No further action is needed during this period, as both the ABRS and legislation recognise the application as sufficient for compliance.

To prevent delays in the branch registration process, it is advisable for non-resident directors to apply for their DIN as early as possible, as it is a necessary requirement for company registration with the Australian Securities and Investments Commission (ASIC), Australia’s corporate, markets and financial services regulator.

2. Identify a legal address in Australia
Your company must have a legal address in Australia for correspondence and official communications. This registered address must be a physical location in Australia and cannot be a P.O. box. The address will be used for ASIC and other government correspondence, serving as an official location for compliance checks and other business-related matters.

3. Appoint a local agent
A critical requirement for establishing an overseas branch in Australia is appointing a local agent, as mandated by the Australian Corporations Act 2001. This role, which can be filled by either an individual or a business entity based in Australia, is essential for ensuring that the branch complies with all legal and regulatory obligations. To qualify, the local agent must live in Australia or, if it is a business, be registered and have a physical location in the country. They also need to be legally able to manage communications with ASIC and other regulatory agencies.

Although the law does not require it, having a local agent who knows Australian corporate rules can be very helpful for effective management. The local agent serves as an important contact, managing official communications and paperwork to keep the branch in good standing and compliant with Australian regulations.

4. Register for an Australian Business Number (ABN)
An ABN registration is essential for any branch operating in Australia. This unique 11-digit number identifies your business to the government and is required for various business activities, such as tax registration, invoicing and other operational functions. The process may take between 45 to 70 days for businesses based overseas after sending proof of identity documents to Australia by post.

5. Register for Goods and Services Tax (GST)
If your branch business expects to have an annual turnover exceeding AUD 75,000, you must register for GST in Australia. Registering for GST lets your business collect GST on sales and get credits for GST paid on purchases. You can register for GST at the same time as you apply for your ABN.

6. Choose an office or virtual address
One of the key steps in opening a branch business in Australia involves selecting a suitable address for your operations. You have two primary options: a registered office address or a virtual office address.

As mentioned in point 2, a registered office address, a type of legal address, is a mandatory requirement that must be registered with ASIC. This address serves as the official location where all government correspondence, including documents from ASIC and other regulatory bodies, will be sent. It is crucial for maintaining compliance with local regulations.

Additionally, an Australian virtual office address provides a reputable business address without the necessity of a physical office space. This option often includes additional services, such as mail handling and forwarding, and can serve as a registered office address as long as it meets ASIC’s criteria. However, it is important to ensure that the virtual office is a physical location rather than a P.O. Box. A virtual office is particularly beneficial for international companies looking to establish a branch business in Australia while minimising overhead costs. This arrangement can enhance your business's professional image and provide a local contact point.

Therefore, choosing between an office and a virtual office address is a vital step in the process of opening a branch business in Australia, as each option offers distinct advantages that can support your operational and regulatory needs.

7. Open a bank account
When establishing a branch business in Australia, one essential step is opening a bank account to manage transactions, pay taxes and conduct other financial operations. Typically, the process of opening a bank account can take between six to eight weeks, so it is important to plan accordingly.

Most Australian banks require several documents for account opening, including proof of your company’s registration, identification of directors and an ABN. Therefore, it is advisable to ensure that all necessary documentation is prepared in advance and that you allocate sufficient time for the entire process.

COMPLIANCE REQUIREMENTS

After completing the essential steps to establish your overseas branch in Australia, it is vital to ensure ongoing compliance with the ASIC and Australian Taxation Office (ATO) regulations. ATO is the main agency for collecting taxes in Australia.

Adhering to these compliance requirements is crucial for maintaining your branch’s legal standing and operational integrity. Below, we outline the key aspects your branch must consider to thrive in the Australian market.

8. ASIC compliance
ASIC oversees corporate regulations and compliance. Your branch must comply with all ASIC requirements, including regular reporting, maintaining up-to-date records and meeting financial disclosure obligations. ASIC will need your company to submit annual financial statements, maintain a registered office address and keep a local agent in place.

9. Tax compliance
Tax compliance is another crucial aspect of running an overseas branch in Australia. Your branch must adhere to all relevant ATO requirements, including lodging Business Activity Statements (BAS) for GST, filing annual tax returns and fulfilling any other tax obligations. Ensuring that your branch has robust bookkeeping and payroll services in place will help maintain tax compliance and avoid potential fines or legal issues.

HOW ABN AUSTRALIA CAN HELP YOU

Opening a branch business in Australia can create new opportunities for growth. However, navigating the rules and regulations can be tricky. At ABN Australia, we have been helping businesses since 1976, giving us the knowledge and local experience you need. We understand the Australian market and can guide you through every step of the process. Whether you need help getting a DIN, finding a local agent, registering for an ABN and GST, acquiring a registered office or virtual office address, opening a bank account or making sure you comply with ASIC and ATO rules, our friendly team is here to help.

Published: 9^th Dec 2024 | Last updated: 9^th Dec 2024