Australia – Company Formation

AUSTRALIA
SETTING UP BUSINESS IN AUSTRALIA

COMPANY FORMATION

We will be happy to assist you to:
i) establish an Australian limited liability company
ii) provide your Firm a local business address
iii) offer accounting and taxation support and
iv) open a corporate bank account (if required).

You will not have to travel to complete company formation and corporate bank account opening. Atrium will complete these tasks on your behalf.

To be able to engineer the optimum Corporate Structure for your business, it is important Atrium has a good understanding of your business and we know your personal objectives. In this respect, I think it efficient to discuss the different Australian corporate solutions available to you. Feel free send me an email with your purposes for this incorporation.

Australia Company Formation
A properly structured Australia private limited company is an excellent corporate vehicle through which business in Australia, and internationally, can be conducted. The following information will help you determine whether Australia Company formation is the optimum structure to meet your business objectives.

Advantages of Australia Company formation
1. An Australian Company projects an excellent image to your customers and suppliers.
2. There are no minimum capital requirements with Australia Company formation.
3. Only one resident director and shareholder is required to meet Australia Company formation regulations.
4. Australia Company formation permits 100% foreign ownership.
6. It is easy to open corporate bank accounts all over the world to support Australia Company formation.
7. According to a World Bank survey, Australia is one of the easiest places in the world to do business.
8. The government provides various incentives to investors to support Australia Company formation.

Disadvantages of Australia Company Formation
An Australia Company formation structure is subject to corporation tax for income generated in Australia and internationally.
To comply with Australia Company formation law, at least one Company director must be resident in Australia.
To comply with Australia Company formation law, the Company Secretary must be Australia resident.
There is a public register of shareholders and directors of every Australian Company.
An Australian Company must submit annual accounts, tax return and undergo an audit.

Other Information
Refer to the following links to read more information on Australia Company formation:

Australia corporate structuring
Important factors to consider when determining whether an Australia Company is the optimum corporate vehicle include for your business;

An Australia Company will be subject to an annual audit; and

In accordance with Section 145 (1) of the Australian Companies Act 2001, every Australian Company shall have at least one director who is ordinarily resident in Australia. Most of our Clients request Atrium to be the resident director.

In accordance with GST Law, an Australian Company is obliged to register for GST. Atrium will be happy to assist you with GST registration.

SUMMARY

Detailed incorporation procedures
1. Completion of Atrium Corporate Structure document;
2. Atrium Incorporation Team performs a company name search with the Australian Regulatory Authority and if approved, we begin incorporation of your Australian Company;
3. Atrium Incorporation Team prepares the following corporate documents for filing with the Australian incorporating authority:
- The Memorandum and Articles of Association;
- A Statutory Declaration of Compliance; and
- A Notice of Situation of Registered Office.
4. Atrium Incorporation Team receives an email of the Certificate of Incorporation from the Australian Registrar of Companies. Our team will immediately email the same to you;
5. Atrium Incorporation Team files the following documents with the
Australian Company Registrar:
- Notification of Appointment of First Directors and Secretary;
- Letter of Appointment of First Directors; and
- Consent to Act as Director.
6. Atrium Incorporation Team applies for the original Business Registration Certificate and pays the Government taxes and levies.
7. Atrium Compliance Team prepares all post incorporation documents, including minutes of the first meeting, preparation of By Laws, issuance of initial Share Certificates. These documents are emailed to our Client for his/her signature;
8. Upon receipt of client signed corporate documents, Atrium couriers a company kit folder to our client containing the following original corporate documents:
- Original copy of Certificate of Incorporation;
- An original bound copy of the Memorandum and Articles of Association;
- Subscribers’ resolution appointing first directors;
- Original share certificates;
- An original printout of the Company structure from the Australian Public
Register.

AUSTRALIA AS A CORPORATE JURISDICTION

1. Jurisdiction Information
Type of Company Limited
Minimum number of shareholders required 1
Minimum number of directors required 1
Australian resident director required Yes
Australia company secretary required No
Australia registered office required Yes
Annual Return required Yes
Submit annual tax return Yes
Accounts have to be audited Yes
Disclosure of beneficial ownership to Australian authorities Yes
Corporate directors allowed No
Tax-free jurisdiction (if properly structured) No
Type of law in Australia UK Based
Time to set up Company 1 week

Advantages of Australia Corporate Structure
Looks good to suppliers/customers, particularly with a Virtual Office.

Disadvantages of Australia Corporate Structure
Annual accounts and annual audit, supported by an annual return; corporate tax rate of 30% on global income.

2. Interesting information
A company is resident for taxation purposes if a) it is incorporated in Australia or b) if both central management and control are exercised in Australia or c) it carries on business in Australia and its voting power is controlled by shareholders who are Australian residents;

There are many different ways in which investors can conduct business in Australia, including corporations, branch offices, subsidiaries, trusts, joint ventures and partnerships. However, for international investors the most appropriate vehicles are usually Australian subsidiary companies or Australian branch offices. Although in terms of taxation there is not a great deal to choose between the two (both are subject to the standard corporate tax rate) in practice most foreign companies choose to operate through a locally-established subsidiary company, as this has the added benefits of limited liability and separate legal status;

3. Taxation considerations
Resident companies are taxed on worldwide income and capital gains at a corporate taxation rate of 30%. In Australia, state, territory and local Governments do not impose additional corporate taxation rates. However, they do impose some taxes which might impact foreign companies operating in the country; namely payroll tax (more applicable to larger employers), stamp duty and property tax;

Withholding tax must be withheld from un-franked dividends, Interest and royalties paid to a foreign company at a rate of 30%, 10% and 30% respectively. Where there is a Double Tax Treaty in place with the foreign jurisdiction, the withholding tax rate on un-franked dividends and royalties may be reduced. Franked dividends from an Australian subsidiary to a foreign parent company are not subject to withholding tax.

Non-resident companies are taxed only on Australian-sourced income and capital gains on the disposal of certain taxable Australian assets if acquired on or after 20 September 1985. (Capital gains on assets acquired before that date by non-resident entities are usually received free of Capital Gains Tax).

Personal income tax rates range from 0% on first AUD 6,000 to 47% on annual income exceeding AUD70,000;

Stamp duty applies to property, vehicles and other items at variable rates;

Goods and Services Tax (GST) applies to most goods and services at a rate of 10%.

Businesses must register if annual turnover will exceed AUD50,000. Sales from one business to another will be GST free. Sales to foreign customers will be GST free.

4. Company Law considerations
A company which intends to do business in Australia must i) register with the Australian Securities and Investment Commission (ASIC) ii) apply for an Australian Business Number (ABN) iii) and apply for a Tax File Number (TFN) and iv) register for GST.

The financial statements must be audited by an external auditor on an annual basis.

Frequently Asked Questions
About Australia Company formation

The following are some of the most frequently asked questions about Australia Company formation:

Can an Australian Company conduct international business?
A properly structured Australia private limited company is an excellent corporate vehicle through which business in Australia, and internationally, can be conducted.

What makes Australia a good base for international Companies?
An Australian Company projects an excellent image to your customers, suppliers and potential investors. Australia also permits 100% foreign ownership. In addition, Australia is considered one of the easiest places in the world to do business.

What are the tax incentives associated with incorporating a Company in Australia?
If income and capital gains have already been taxed in a foreign jurisdiction, then exemptions are available.

What are the negative tax implications of setting up an Australian Company?
Australia-resident companies must pay income and capital gains tax on worldwide-sourced income. The Australian corporate tax rate is 30%.

What is the definition of an Australia-resident Company?
A Company is deemed to be Australia-resident if it has been formed in Australia; if the Company’s central management and administration is in Australia, even if it was formed in another jurisdiction; and if the Company conducts business in Australia and its voting control is in the hands of resident Australian shareholders, even though it was incorporated in another jurisdiction or its central management is in another jurisdiction.

Do non-resident Companies enjoy and tax benefits?
Non-resident companies are taxed only on Australian-sourced income and capital gains on the disposal of certain taxable Australian assets if acquired on or after 20 September 1985. (Capital gains on assets acquired before that date by non-resident entities are usually received free of Capital Gains Tax).

How easy is it to open a corporate bank account for an Australian Company?
It is easy to open an international corporate bank account to support an Australian Company.

Are there any non-tax incentives available to investors planning to set up in Australia?
The Australian government provides incentives on a case-by-case basis. Incentives include assistance in training, research & development (R&D) and export market development; streamlined immigration procedures; assistance with obtaining information for site selection and introductions to relevant government agencies and professional service providers.

What are the criteria to be eligible for incentives?
According to the government-run agency InvestAustralia, the Federal government provides incentives if it considers that a project offers significant economic benefits to the country.

Does an Australian Company need to prepare and submit annual accounts?
An Australian Company must submit annual accounts, tax return and undergo an audit.

How many directors and shareholders must an Australian Company have?
Only one director is required. Corporate directors are allowed.

Does an Australian Company need a resident director?
To comply with Australian Company law, at least one Company director must be resident in Australia.

Are there any minimum capital requirements to set up an Australian Company?
There are no minimum capital requirements.

Are Australian Company structure details made available to the public?
There is a public register of shareholders, directors and beneficial owners of every Australian Company.