Australia: Tips for foreign businesses looking to enter the Australian market

Last Updated: 11 August 2017
Article by Esteban Gomez

Most Read Contributor in Australia, December 2018

Australia continues to be an attractive destination for foreign businesses looking to expand or invest capital. Australia has a proven resilient economy, well developed infrastructure, a sophisticated business environment and is excellently located as a gateway to China and South East Asia.

Foreign businesses should be aware that there are several different ways to enter the Australian market, each with advantages and disadvantages which must be carefully considered due to the legal and also regulatory, accounting and taxation consequences. Crucially, it is important for a foreign business to plan ahead to determine what sort of business it expects and wants to be operating in Australia over a period of time, to ensure that correct decisions are taken from the outset.

Below are a selection of ways foreign businesses can enter the Australian market.

(1) Incorporate an Australian subsidiary company

There are several well-established structures for conducting business in Australia. These include operating as a sole trader, in a partnership, in a joint venture, via a trust (which is a legal relationship whereby property is held for the benefit of a third party) and by registering a company. There are approximately 2.5 million companies registered in Australia. For the purposes of this article we focus primarily on proprietary companies limited by shares ("Pty Ltd"). These are a form of private company commonly used to start new ventures and which confer on shareholders the benefits of limited liability.

A foreign business can register a new Pty Ltd company and issue shares on incorporation to the foreign entity. On incorporation, the Pty Ltd company becomes a distinct legal entity and the subsidiary of the foreign entity. There is no requirement for a local shareholder and there are few formalities on incorporation other than ensuring that the proposed name is available, appointing at least one director who resides in Australia and having a registered office in Australia.

The Pty Ltd company will in substance be no different from any other Australian Pty Ltd company, and other Australian businesses will feel comfortable interacting with such an entity. The process of establishing a Pty Ltd company is inexpensive, simple and fast, usually taking around one business day.

Note that a Pty Ltd company is limited to a maximum of 50 non-employee shareholders, and cannot raise funds by offering their shares to the public (although some limited private fundraising can occur). Pty Ltd companies that are controlled by foreign companies also need to comply with financial reporting and auditing requirements, unless an exemption or relief applies. Notably, regulatory relief exists for foreign controlled small proprietary companies that are not part of a large group.

(2) Acquire an existing Australian company or business

This can take several forms. A foreign business may choose to acquire the shares or the assets of an Australian business and an acquisition may be a full acquisition or a partial investment.

In all cases, Australia's foreign investment framework needs to be considered. This framework is administered by the Foreign Investment Review Board (FIRB) and relevantly requires foreign persons to obtain approval before acquiring a substantial interest (at least 20%) in an Australian entity valued above AU$252 million (AU$1,094 million for foreign persons from Australia's Free Trade Agreement partners Chile, China, Japan, Korea, New Zealand and the United States, except in respect of sensitive sectors including media, telecommunications, transport and defence). Approval must also be obtained for acquisitions by foreign persons of direct interests (generally, at least 10%) in an agribusiness where the investment is more than AU$55 million (AU$1,094 million for foreign persons from Chile, New Zealand and the United States), regardless of the value of the agribusiness. Threshold figures are indexed annually. Other ownership restrictions apply to specific industries including media, banking, airlines, airports and shipping, and where the proposed investor is a foreign government.

There are also special rules for takeovers of public companies and companies listed on the Australian Securities Exchange, and in respect of schemes of arrangement (which are akin to friendly mergers requiring shareholder and court approvals). Clearances from competition regulators may also be required.

(3) Register as a foreign company with ASIC

This is an obligation as much as it is an option. Foreign companies wishing to carry on business in Australia must register with ASIC pursuant to the Corporations Act 2001 (Cth) (Corporations Act). This option allows a foreign company to operate within Australia subject to meeting certain requirements and ongoing obligations.

Whether a foreign company is carrying on business in Australia is not a 'bright line' test and requires consideration of all the circumstances. The Corporations Act provides some guidance in this regard. For example, having a place of business in Australia is enough to constitute carrying on business. However, merely being party to proceedings or holding internal meetings, among other things, is not in itself sufficient to constitute carrying on business in Australia.

Registration involves checking that the foreign company's name is available in Australia (it cannot be the same as an existing company or business name) and making an application to ASIC including submitting supporting constituent documents, translated into English where necessary. The company must appoint a local agent (who can be an Australian resident individual or an Australian company, and is responsible for company obligations and authorised to accept notices), and must lodge a memorandum of the powers of any local directors.

Once registered, ASIC will issue the foreign company with an ARBN (Australian Registered Body Number) and the company must then comply with obligations regarding display of company name, ARBN and maintenance of an Australian registered office.

Further, unless relief applies, at least once every calendar year the registered foreign company will be required to lodge financial statements with ASIC. Notably, regulatory relief exists for foreign companies that are equivalent to small proprietary companies, that are not required to prepare financial statements in their place of origin, and that are not part of a large group.

(4) Operate remotely

A foreign business may decide it wishes to operate entirely 'remotely' in Australia, for example by merely importing goods or selling services into Australia and/or maintaining an online presence.

While this would appear a simple option, there are a number of potential considerations. For example, to obtain a "" domain name, or other business registrations, the provision of an Australian Business Number (ABN) may be required. An ABN is an 11 digit number which identifies a business to Australian government agencies and other persons, such as contract counterparties. It can also facilitate a business to obtain other required registrations such as tax file number (TFN), Goods and Services Tax (GST) and business names.

However, not every business is eligible for an ABN. Foreign businesses must either meet the relevant tests for carrying on or starting an enterprise in Australia for ABN purposes, or be making supplies connected with Australia's indirect tax zone.

The foreign business should also keep in mind the requirement to pay any import duties, and to register with ASIC should the company's activities result in carrying on business in Australia (as outlined in item (3) above).

Recently, the Australian Government has also taken steps to impose GST on imported services (such as architectural and legal services) and imported digital products (such as streaming services), and separately on low value imported goods less than AU$1,000 (scheduled from 1 July 2018).

(5) Enter into a joint venture

For completeness, a foreign business may also enter into a joint venture with an Australian venture partner in respect of a project or venture in Australia. A joint venture is governed by common law and the law of contract, may be either incorporated (where the joint venture is a separate legal entity) or unincorporated, and depending on the structure chosen may also involve some of the issues above.

Other considerations and conclusion

A prudent foreign business must consider how and where it intends to be operationally and commercially in the next year and into the foreseeable future. How a company intends to do business will inform and direct the process of entering the Australian market. When a business develops, it needs to be in a position to address structural changes as they arise.

Knowing the consequences of early establishment steps will inform the most appropriate entry decision. There is also a particularly fine line between 'minimum entry' into Australia, and a point where significant legal, accounting and taxation obligations arise. As well as legal advice, specific accounting and taxation advice should be obtained to help guide the various account preparation and lodgment obligations, and taxation registration, collection and payment obligations.

Upon entering the Australian market, a whole range of new business decisions will often arise such as the leasing of commercial property, employment of staff and protection of intellectual property. Often, it can be time and cost effective to consider these as part of structuring market entry.

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions