When you register a branch in Australia, your headquarters will maintain broad control over the entity from elsewhere, while itself remaining free of many legal and financial liabilities associated with the activities of the branch. As such, once potential investors have investigated the different types of companies in Australia available to them, many opt to form a branch when entering the market.
Australia has experienced 28 years of consistent economic growth and was ranked the second richest country in the world in terms of average wealth per adult in 2019, according to the 2020 edition of the Global Wealth Report (PDF download). The country was also placed among the 20 most competitive countries in the world in the 2019 IMD World Competitiveness ranking. In addition, Australia is well known for having some of the highest scores in the Rule of Law Index.
With a gross domestic product (GDP) of $1.39 trillion (all figures in USD) and foreign direct investment inflows (FDI) of $40 billion in 2019, Australia is a leading financial center in the Asia-Pacific region, and its workforce is one of the most highly educated in the world, with roughly 50 percent having some type of tertiary qualification. Australia’s economy is 80% service-based and has a highly-developed mining sector and a strong agricultural sector that benefits from strong demand in Asian markets.
Furthermore, Australia has multiple free trade agreements (FTAs) in place, including with the Association of Southeast Asian Nations (ASEAN), China, Japan, South Korea, and the United States. Some of Australia’s main export commodities include coal briquettes, iron ore, petroleum gas, gold, and aluminum oxide. Its key export destinations include China, India, Japan, South Korea, and the United States.
Read on to learn about the benefits and steps involved in registering a branch in Australia, or reach out to us now to discuss your business options.
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Register a branch in Australia: main benefits
Although a branch operates as an extension of the parent company located elsewhere, it is not constituted as a separate legal entity. Therefore, the branch is dependent upon and subordinate to the management of the parent company. Some of the main benefits of registering a branch in Australia include:
- Legal independence: Some legal liability in relation to the work of a branch in Australia is independent of the parent company, meaning that your company or other branches are more protected from potential risks.
- Financial independence: Although a branch is managed by the parent company, in the eyes of the Australian government aspects of the branch’s finances are independent from those of its parent company.
- Fast market entry: The process to incorporate a branch in Australia is quick and straightforward, allowing you to start your commercial operations in a short time.
- Financially attractive: Incorporating a branch in Australia is cheaper than forming a company, representing a lower investment.
3 steps to register a branch in Australia
The process to register a branch in Australia involves three steps that a trusted legal services provider will be able to help you complete. Those steps are:
1. Register the company name with the Australian Securities and Investments Commission (ASIC). Note that the name of your branch cannot match an existing company’s name and certain words such as ‘trust’ or ‘university’ cannot be used without governmental approval.
2. Complete form 402 to provide the Australian government with general information about the proposed branch you intend to incorporate in the country.
3. Present other supporting documents, which include:
- Certified copy of entity certification
- Certified copy of entity constitution
- Proof of appointment of a local agent
- Information on powers of certain directors
Note that all documents submitted to the ASIC must be in English, having translated by an official translator if the original was in another language.
Obligations after branch incorporation
After you register a branch in Australia, you will have to meet a number of obligations so that your business can legally operate in the country. Major obligations include:
Tax returns: All branches of a foreign company operating in Australia must file a tax return with the ASIC at least once each year by filling out form 406.
Branch register of members: If an Australian resident who is a member of your company requests their shares in a branch register, you must do so within one month. Note that the branch then cannot be discontinued without the consent of any members in this branch register.
Display ARBN correctly: You must display the branch name and Australian Registered Body Number (ARBN) correctly on all public documents.
Displaying of company name: The name of a branch must be displayed outside its office open to the public. In addition, you must also display the place of origin of your company, its registered office, and the limited liability notice.
Maintenance of a registered office: The office of your branch must be open from at least 10 am to 12 pm, as well as 2 pm to 4 pm every day. This may be slightly different if you notify ASIC of an alternate schedule that you want to implement for your business.
Biz Latin Hub can help you register a branch in Australia
If you are seeking to register a branch in Australia, our multilingual team of company formation agents is equipped to provide specialist support on all aspects of your market incorporation, including ongoing legal, accounting and, HR assistance. With our full portfolio of market entry and back-office services, we can be your single point of contact to successfully establish a branch in Australia or New Zealand, as well as throughout Latin America and the Caribbean.
Contact us now for further advice or a free quote.
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