Foreign investment
1. What are the legal structures available to carry on a business in Australia

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.

2. What is the difference between a private and a public company ?

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.

3. How long does it take to set up a company ?

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

4. How many directors are required for a private company ?

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.

5. Does the Australian subsidiary need to be audited ?

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.

6. Can the financial year end of the Australian subsidiary be changed to synchronize with the overseas parent company’s year end ?

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.


The information provided is a general guide only and should not be treated as advice. It does not cover the topics exhaustively and should not be regarded as offering a complete explanation of the matters referred to. We disclaim any liability or responsibility to any person, who acts or fails to act as a consequence of reliance upon the whole or any part of the contents on this page.

Contact Us
Level 18, Citigroup Centre
2 Park Street, Sydney NSW 2000
+ 61 2 9264 8887
to our newsletter
Sign Up
Thank you for your submission.
Sign Up
Liability limited by a scheme approved under Professional Standards Legislation
© Copyright Eva Law & Associates 2013