Do we need to incorporate a subsidiary in Australia before doing business with Australian Consumers?

Preliminary Matters

Before taking any decision regarding investing/doing business in Australia, we recommend you take preliminary steps to proactively protect your IP/Brand (if any) and then start reading & learning about the Australian Legal + Regulatory Compliance Environment.

Then we recommend you contact our legal team to discuss your options in detail.

A detailed list of steps can be found in our more detailed FAQ: What Steps do you recommend before doing Business in Australia?

Incorporating a local Australian Company is not a mandatory pre-requisite

The short answer is "No" such as step is not a mandatory prequisite to doing business with Australia.

A foreign company may commence conducting business with Australia from overseas (assuming no physical presence in Australia and a low value sales).

For example, this would typically involve an overseas eCommerce website selling goods or services directly with Australian Consumers.

Important Note: Diligence is required as the business grows in scale and operations as the position is subject to change as soon as you cross thresholds that the local Australian Courts would deem to constitute "carrying on a business" in Australia.

For a more detailed discussion of what may be deemed as "carrying on a business" in Australia please refer to our FAQ: What Steps do you recommend before doing Business in Australia?

Without fully informed legal advice and guidance your new or established foreign business may unknowingly cross the relevant thresholds and become liable for serious breaches of Australian Law.

Alternative Options (non-exhaustive list)

Rather than starting by incorporating a local Australian Company you could alternatively decide to do any of the following:

1️⃣ Acquire or takeover an existing business/property subject to Foreign Investment Review Board (FIRB) approval (if applicable);

2️⃣ Register with ASIC as a foreign company doing business in Australia (once you commence doing business).

You can maintain this status until it is more appropriate to establish a more permanent local presence such as incorporating a subsidiary;

3️⃣ Do nothing further until after your due diligence is completed; and/or

4️⃣ An overseas eCommerce website selling goods or services directly with Australian Consumers.

Credits:

This FAQ was written by James D. Ford GAICD | Principal Solicitor, Blue Ocean Law Group℠.

Important Notice:

This FAQ is intended for general interest + information only.

It is not legal advice, nor should it be relied upon or used as such.

We recommend you always consult a lawyer for legal advice specifically tailored to your needs & circumstances.