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Setting up a Canadian company in Australia can be a beneficial way to globally expand your enterprise. After all, Australia is a popular market to expand into given its promising commercial environment.
There are a number of legal aspects that need to be thought through first – we’ll discuss them in this article. Mainly, it’s important to consider:
- The requirements for registering a company in Australia
- Whether you will be setting up as a subsidiary or a branch
- Important contracts and agreements
- The regulatory bodies you need to report to
- Tax obligations
Once you have ensured you’ve covered all the main legal concerns, you will be a step closer to venturing down under for business.
Why Should I Expand My Canadian Business To Australia?
Australia and Canada not only enjoy a diplomatic friendship, but they also have similar social, political and legal stability. Therefore, a transition between doing business in Canada to Australia should be relatively smooth.
The partnerships involving Australia-Canada businesses, trading and investments has prompted the creation of a not-for-profit which has been endorsed by the Australian government. The Canadian Australian Chamber Of Commerce (CACC) has been established exclusively to facilitate greater commercial interactions between the two nations.
As the relationship between Australia and Canada continues to grow and thrive, it’s a good time for Canadian companies to consider extending their reach to Australia.
Can A Foreigner Register A Company In Australia?
Yes, Australian business laws allow foreign companies to register and operate in Australia.
However, the way you choose to do this will determine the processes you need to follow.
There is a registration process, fees that need to be paid as well as local rules and regulations that need to be followed. We’ve got more on that below, so keep reading to find out more.
Free Trade Agreements
Australia is party to multiple free trade agreements with nations in various regions around the globe, including the Americas, Asia and the Pacific.
For Canadian companies expanding to Australia, taking advantage of Australia’s free trade agreements is a welcome perk. The free flow of goods across borders can eliminate much of the red tape many companies face.
How Do I Register My Company In Australia?
Australian Securities and Investments Commission (ASIC) is the main regulatory body for companies in Australia. Registering your company will be done through them.
The forms and information to register your company in Australia can be found online. In order to complete the process, some of the main tasks you will need to complete include:
- Registering a company name
- Attaining a unique identifying number
- Filling out all the relevant forms
- Providing supporting documentation
- Have an Australian address
- Obtain local agents
Once you have completed the forms, supplied all the relevant documentation and met the requirements, your company can be legally registered in Australia.
Local Subsidiary Company Vs Branch Office
An important decision you will make when setting up a Canadian company in Australia is whether you will open as a branch or subsidiary. Both have their advantages and it’s simply a matter of deciding which one is best for your situation.
A subsidiary is a separate legal entity, where the head office will own it by holding most or all of the shares. The amount of shares owned by the main company will determine their liability towards the subsidiary.
A branch, on the other hand, is not a legal entity but rather, an extension of the main company. Unlike a subsidiary, a branch means you will have full liability for it.
What Else Should I Consider?
Aside from the formalities of setting up a company, there are a number of other considerations to make to ensure you are prepared for a foreign business market.
Competition
It’s important to do your market research and understand the nature of the competition in another locality. If you have determined there is a demand for what you can offer in the Australian market, then it’s always good to see what the other locals are doing so you can set yourself apart from them.
In light of competition, Australian Consumer Laws aim to regulate and support competition as opposed to taking competition out. Therefore, your conduct must reflect this.
Any agreements you sign that contain an element of exclusivity must be reasonable in their approach.
Shipping
Shipping to and from Australia means getting familiar with the customs, rules and regulations. They are often subject to change, so it is vital to always stay on top of this.
Foreign ships that enter Australia with goods are subject to different tax regulations. A legal expert can help explain the ones that are relevant to you and how to ensure you are being compliant with them.
If you are shipping goods outside of Australia or to Australia, the Australian Border Securityregulations should always be followed. You can read more about them here.
If your supplier is outside of Australia, you will need to have a Supply Agreement that covers all the key terms of your arrangement.
Market Entry
Entering a new market requires adapting to the new location to maximise success. Consider any key differences in culture, the social climate and economic conditions that could impact how your business is received by a new community.
It could be something as simple as changing the price of an item to fit the market or removing certain symbols that can be considered offensive in another region.
Internationally Enforceable Contracts
Another aspect that needs to be considered prior to expanding your business internationally, is the matter of jurisdiction. In the case of a dispute that ends up in the courts, you want to make sure that wherever the judgement is delivered, it can apply in all the jurisdictions your business operates in.
Internally enforceable contracts contain clauses that ensure a judgement can be enforced both in Canada, Australia and any other regions you may wish to be covered in.
Ecommerce Terms & Conditions
Like many businesses, there’s a chance you’ll be using a website to run part or all of your business. Almost every country has a requirement for the terms and conditions of a business website. Australia is no different.
Therefore, if you are opening your website to Australian viewers, ensure its terms and conditions are compliant with Australian regulations. Here at Sprintlaw, we offer a package to get your online terms and conditions sorted with a fixed fee.
How Do I Set Up My Canadian Company In Australia?
ACN or ARBN
A question many foreign companies face when expanding their operations to Australia is deciding whether they will need an Australian Company Number (ACN) or an Australian Registered Body Number (ARBN).
Both numbers are used for the purpose of registering a company. However, the key difference is that an ACN is usually used for Australian based companies whereas foreign companies can apply for an ARBN.
Do Foreign Companies Pay GST In Australia?
We always advise seeking the help of a financial professional when deciding which taxes are applicable to you.
Usually, a foreign business that has been operating from Australia for more than 183 days over 12 months is eligible to pay Goods and Services Tax (GST). In addition to the time and geography threshold, the annual turnover needs to be of at least $75,000 from revenue earned through business operations in Australia.
Corporate Filings
Annual corporate filings are an essential part of keeping your business operations consistently legal. Depending on the type of business you run, (whether it’s a partnership, company or you are operating as a sole trader) your requirements will vary based on the structure.
A company for example, will need to have auditors visit every year and pay annual fees to cover this.
Talk to one of our legal professionals today to get advice about any corporate filings you can expect in Australia.
Business Name Or A Company Name
If you are setting up a company, you may need to attain a company name alongside your business name if the names are not identical.
Most businesses (unless they meet the exceptions) need to register a business name but not a company name. The key difference is, a company name is the name your company operates under as a separate legal entity.
For example, you could have ‘Green Apple Juice Pty Ltd’ as your company name. A business name on the other hand, is the name your company gets recognised under and it does not necessarily have to be identical to the company name.
If the company name is ‘Green Apple Juice Pty Ltd’ the business name could simply be, ‘Green Apple Juices’.
If you are okay with trading and being recognised with the exact company name you have registered, then you likely will not need a business name.
What Do I Tell ASIC?
Once you’ve established a Canadian company in Australia, your relationship with ASIC will be ongoing as they are the main regulatory body for companies in Australia. Annual reports are done through ASIC and, if there are any changes to your company, you will need to notify ASIC.
Some of these include:
- A change in director
- Shareholders leaving or entering
- Changing address or location
- Alterations to the company structure
- Disclosing important financial information
Ensuring you keep up with your obligations to ASIC is crucial, as fines can be imposed on companies that do not comply with their obligations to ASIC.
Key Takeaways
Clearly, there are a lot of factors when expanding a Canadian company to Australia. It can be a beneficial move, however it’s important to ensure that your business legals are in order to give yourself the best chance of success.
To summarise:
- Registering a foreign company in Australia requires a number of forms and providing the correct documentation
- It’s important to register everything that is relevant to your business such as applying for an ARBN, a company name or a business name
- You have the option to set up a subsidiary or a branch- both have different requirements
- Matters such as taxes, contracts, shipping, terms and conditions also need to be sorted
- Certain things can be impacted by a different market and environment so it’s a good idea to become familiar with it
Here at Sprintlaw, we can help with these!
If you would like a consultation expanding your Canadian business to Australia, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
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