As the U.S. imposes new tariffs on Canadian imports, businesses across Canada are looking to Australia, either by way of opening Australian subsidiary companies, or entering into trade deals with Australian partners. For those looking to incorporate a subsidiary company in Australia, this article outlines the brief legal and regulatory framework.
Choosing the Right Business Structure
A subsidiary is a separate legal entity, often offering benefits in terms of liability protection and localised management. This means, that if you were to incorporate a company in Australia, you would be able to employ local employees to engage with the Australian market, but minimise the risk of your Canadian business having liability for the Australian operations. Alternatively, you can establish a local branch in Australia, but this does not provide you with limited liability as it would be your Canadian business trading in Australia
Company Registration
All companies are incorporated via the Australian Securities and Investment Commission (ASIC). Companies are governed by the Corporations Act 2001 (Cth) which requires at least one Australian resident director.
In deciding on the name of your company, you should consider reviewing ASIC, IP Australia and ABN Lookup to ensure you are not infringing upon another businesses registered trade mark, or operating whereby it could be deemed misleading or deceptive conduct where you are using a name that this the same or deceptively same to another business already operating in Australia.
Local Directorship and Corporate Governance
Australian law requires at least one director to be a resident. Prior to engaging a local director, you should ensure that you have an appropriate resident director agreement, that outlines that directors roles and responsibilities, whilst at the same time enabling you to remove that director when required.
Australian employment law has various similarities to Canadian employment law, but there are certain risks in employing a local director. This is why you should consider engaging a local director as a director, not an employee.
Implementing policies and procedures that comply with Australian laws are essential, such as occupational health and safety and anti-bullying, harassment and discrimination policies as the financial consequences of not having these policies and procedures can be severe.
Financial Setup
To open an Australian business bank account to manage local transactions will oftentimes be necessary, this means that you will likely need to grant your local director access to the bank accounts, but you also can open a bank account that requires duel authentication requirements to transact on those accounts, and you can also complete applications to enable read-only access or multiple person access to those accounts.
Generally speaking, a new business in Australia will also apply for and obtain an Australian Business Number (ABN), register for Goods and Services Tax (GST), obtain an Australian Tax File Number and possibly, obtain various other licences and registrations to operate within your industry.
Operational Setup
All companies incorporated in Australia must have a registered office and a principal place of business. These can be virtual or physical offices and are often times your lawyers or accountants offices, with your local staff working from home or a co-working space.
To obtain an Australian domain name (.com.au), you will often be required to obtain an Australian Business Number.
How Can MurdockCheng Legal Practice Help?
We offer comprehensive legal services for Canadian businesses looking to establish operations in Australia. Our team understands both Canadian and Australian business landscapes, making expansion seamless. Our Services Include:
- Company Formation – We help register your business in Australia, together with virtual office services so you can have a registered office in the financial district of Sydney.
- Local Directorship Services – We can act as your Australian-based director, or assist you in sourcing a local director.
- Legal Compliance & Corporate Governance – We can assist you with all of your legal compliance and corporate governance requirements, including the facilitation of opening a bank account for you.
- Investment & Tax Structuring – We can assist with your corporate structuring, providing you with flexibility and maximising your opportunity to obtain research and development tax incentives and government grants.
- Mergers, Acquisitions, Partnerships and Licencing – We can assist Canadian businesses partner with Australian companies by drafting the legal documentation to give you comfort in having the legal support necessary to protect your rights.
About MCLP
Damin Murdock is from the Ottawa Valley; a graduate from the University of Western Ontario (Finance); holds a Juris Doctor from Australia (International Trade Law); a Masters of Laws from Erasmus University Rotterdam (International Business Transactions); President of the Canadian Australian Club (Sydney); and Treasurer of the North American Australian Lawyers Alliance.
MCLP has been operating in Sydney and Melbourne for more than a decade, and most of our lawyers hold business administration degrees ensuring you are receiving both practical and legal solutions for your expansion to Australia.
For more information, call our office on +61 2 9262 5495 or email Mr Murdock directly at dmurdock@mclp.com.au for a free consultation, or subscribe to our newsletter by visiting https://mclp.com.au/publications/
For additional information and support:
- Canadian Consulate-General in Sydney
📍 Level 6, Quay West, 111 Harrington Street, Sydney NSW 2000
📞 +61 2 9364 3000 | ✉ sydny@international.gc.ca - Canadian High Commission in Canberra
📍 Commonwealth Avenue, Canberra ACT 2600
📞 +61 2 6270 4000