The most common structure is to set up an Australia subsidiary, which can either be a private or a public company. However, there are other legal structures available. For example, a business can be carried out through an Australian branch or a trust. Each type of business structure has different legal and taxation implications.

A private (or proprietary) company is more commonly used for private ventures or as a subsidiary of foreign companies because it is simpler and less expensive to manage. However, it cannot have more than 50 non-employee shareholders and it is not allowed to engage in fundraising activities that would require the issue of a prospectus. A public company is often used for large public ventures and can be listed on the Australian Stock Exchange (ASX). There is no limit on the number of its shareholders.

Setting up a company would normally take half a day once the required details are provided.

A private company must have at least one director who ordinarily resides in Australia. It is not mandatory to have a secretary but if a secretary is appointed, the person must ordinarily reside in Australia.

Large proprietary and public companies are required to be audited. A small proprietary company is normally exempt from audit but if it is controlled by a foreign company, it is required to be audited and lodge its financial report with the Australian Securities & Investments Commission within four months after year end. There is, however scope to apply for relief if the prescribed conditions are met.

Yes but provided that the first financial year is not more than 18 months. As the income tax year end in Australia is 30 June, an application should be made to the Australian Taxation Office for a substituted accounting period. The application is generally granted if the reason for the application is to synchronize with the overseas parent company’s reporting period.

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