Many business people in China, Malaysia, Singapore or Taiwan want to set up an Australian company to enter the market or buy a business. One of the most common questions: if every shareholder is overseas, can the company still be registered?
The short answer
Yes, but under the Corporations Act a proprietary company (Pty Ltd) must have at least one director who ordinarily resides in Australia. All the shareholders can be overseas, but the board must include someone who lives in Australia.
Who can be the resident director?
- Someone who ordinarily lives in Australia. They do not have to be a citizen or permanent resident; what matters is where they actually live.
- Aged 18 or over and not disqualified from managing corporations.
- Holding a Director ID before appointment.
What is the resident director responsible for?
A resident director is not a figurehead. Every director has legal duties, including acting in the company’s best interests, acting with care and diligence, and not letting the company trade while insolvent. Directors can be personally liable if the company breaks the law or trades while insolvent. The resident director needs to genuinely understand the business, and overseas shareholders should have a written agreement with them covering decisions, information and pay.
Also check FIRB
Foreign persons acquiring Australian businesses, shares or land may need approval from the Foreign Investment Review Board first. Whether you need to apply depends on the investor, the industry and the type of deal. Check before you sign, and where needed make FIRB approval a condition of the contract.
Next steps
Before setting up, settle the structure, shareholder arrangements and your resident director. See company set-up and structure and shareholders agreements. We act Australia-wide and meet online.
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This article is general information only and is not legal advice. You should not rely on it for any particular matter. For advice on your situation, please book a consultation.
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