Setting Up in Australia as a Foreign Company: Directors, Registration and What Most People Get Wrong

Australia is one of the most straightforward countries in the world to incorporate in. ASIC registrations are fast, the rules are clear, and foreign ownership of an Australian company is generally unrestricted. But one requirement trips up almost every overseas founder: you cannot register an Australian company without at least one director who ordinarily resides in Australia.

This guide walks through how foreign businesses enter the Australian market, the directorship rules, and the ongoing obligations that catch people out after registration.

Your options: subsidiary vs branch
Pty Ltd registration requirements
The resident director rule explained
The problems with all-foreign-director companies
Nominee directors: the common workaround (and its risks)
Ongoing compliance after registration
Typical timeline
Frequently asked questions
Official resources

1. Your options: subsidiary vs branch

Foreign businesses entering Australia typically choose between two structures:

Australian subsidiary (Pty Ltd): a new Australian proprietary company, owned partly or wholly by the foreign parent. This is by far the most popular option. It is a separate legal entity, liability is contained, customers and banks treat it as a local business, and profits can be managed cleanly within the group.

Registered foreign company (branch): the foreign company registers directly with ASIC under Part 5B.2 of the Corporations Act and trades in Australia under its own name. Branches carry heavier ongoing reporting, including lodging the foreign company’s financial statements with ASIC (Form 405) each calendar year.

For most small and mid-sized foreign businesses, a Pty Ltd subsidiary is cheaper to run and simpler to manage.

2. Pty Ltd registration requirements

To register an Australian proprietary company, you need:

At least one shareholder (individual or corporate, Australian or foreign, with no more than 50 non-employee shareholders)
At least one director who ordinarily resides in Australia (more on this below)
A Director ID for every director, including foreign directors, obtained from the Australian Business Registry Services before appointment
A registered office address in Australia (not a PO box)
A company name that is available and acceptable to ASIC, or you can simply use the ACN as the name
A constitution or the replaceable rules under the Corporations Act
An ABN and TFN after incorporation, plus GST registration if turnover will exceed the threshold

If the company will carry on a business in Australia, it must also appoint a public officer (an Australian resident individual) within three months and notify the ATO.

3. The resident director rule explained

Section 201A of the Corporations Act 2001 requires every proprietary company to have at least one director who ordinarily resides in Australia. (Public companies need three directors, at least two of whom ordinarily reside in Australia.)

Foreign ownership is fine. A Pty Ltd can be 100% owned by overseas individuals or a foreign parent company. The restriction is on the board, not the share register.
Foreign directors are fine too. You can have as many non-resident directors as you like, as long as at least one director is an Australian resident.
Zero resident directors means no registration. The application cannot be accepted without one. There is no waiver for ordinary incorporations.
“Ordinarily resides” is about genuine residence, not a mailing address. Putting forward someone who has never lived in Australia invites scrutiny.

4. The problems with all-foreign-director companies

Even once the resident director requirement is understood, companies run mostly from overseas hit practical friction:

Director ID delays. Every director needs a Director Identification Number. Foreign directors who can’t verify their identity online must lodge a paper application with certified (and often translated) identity documents, which alone can add weeks to your timeline.

Banking. Australian banks apply strict KYC/AML checks. Many want an Australian-resident signatory or director, and some want someone to attend a branch. Companies with mostly offshore boards regularly struggle to open a business account, which stalls everything downstream: payroll, GST and supplier payments.

ATO registrations. ABN, TFN and GST applications from foreign-controlled companies can attract additional verification, and the resident public officer requirement still applies.

Ongoing ASIC reporting. This is the one people miss. A small proprietary company that is controlled by a foreign company does not get the usual small-company exemption from lodging financial reports. It must prepare, audit and lodge annual financial reports unless it qualifies for relief under ASIC’s reporting relief instrument (formerly Instrument 2017/204, now ASIC Corporations (Annual and Half-year Reporting) Instrument 2026/468). To rely on the relief, the company must not be part of a large group, and the directors must pass a resolution and lodge Form 384 within the window ASIC sets: from three months before the start of the first financial year the relief is used, to four months after that year ends. Miss the window and the report for that year is due in full.

FIRB approval. Simply incorporating a new Australian company generally doesn’t require Foreign Investment Review Board approval, but acquiring an existing Australian business, commercial land or agribusiness interests above the relevant thresholds can. Get advice before signing anything.

5. Nominee directors: the common workaround (and its risks)

Because a resident director is mandatory, there is a market for nominee director services, usually charged as an annual fee. Used properly, with a reputable provider, a clear deed of indemnity and genuine oversight, this is a legitimate way to satisfy s201A while you establish a local presence.

Used carelessly, it’s dangerous:

The nominee is a real director with real duties under the Corporations Act, including potential liability for insolvent trading, unpaid PAYG withholding and superannuation, and reporting failures.
If the arrangement is a sham (a name on paper with no involvement), both the company and the nominee are exposed.
Banks and the ATO increasingly look through paper arrangements during account opening and ABN verification.

If you plan to relocate a founder or hire Australian management within 12 to 24 months, a nominee can bridge the gap. Just treat it as a genuine appointment, not a formality.

6. Ongoing compliance after registration

Registration is day one. Each year an Australian Pty Ltd must:

Pay the ASIC annual review fee and confirm company details (directors, shareholders, registered office)
Notify ASIC of changes (director appointments and resignations, share issues, address changes) within 28 days
Lodge income tax returns, plus BAS if GST-registered and PAYG withholding reports if employing staff
Meet superannuation obligations for any Australian employees
For foreign-controlled small proprietary companies: either rely on the Form 384 reporting relief (lodged on time, and keep checking you still qualify) or prepare and lodge audited financial reports
Maintain registered office and public officer arrangements

Most foreign owners work with an Australian registered agent and accountant for this. Cheap Company Setup is an ASIC registered agent and can look after your company’s ASIC obligations after registration.

7. Typical timeline

Step	Typical timeframe
Director ID (Australian residents, online)	Usually same day
Director ID (foreign directors, paper form)	Several weeks
ASIC company registration	Usually same day; some names are reviewed by ASIC and take until the next business day
ACN issued	On registration
ABN / TFN	Days to a few weeks (longer for foreign-controlled entities)
Business bank account	1 to 4 weeks (KYC dependent)

The critical path for foreign founders is almost always the Director ID and the bank account, not the ASIC registration itself. See how long it takes to register a company in Australia for more on registration timing.

8. Frequently asked questions

Can I register an Australian Pty Ltd if I live overseas and don’t know anyone in Australia?

Yes, but you need at least one director who ordinarily resides in Australia. If you don’t have a trusted local director, a professional nominee director service can satisfy the requirement while you establish operations. You can remain the sole shareholder and control the company as the owner.

Can a foreign company own 100% of an Australian Pty Ltd?

Yes. There is no general restriction on foreign share ownership of an Australian proprietary company. What the law restricts is the board: at least one director must ordinarily reside in Australia. A foreign-controlled small proprietary company also has extra ASIC financial reporting obligations unless it relies on the Form 384 relief.

How long does it take and what does it cost to set up?

The ASIC registration itself is quick once your details and Director IDs are ready. The realistic end-to-end timeframe for a foreign founder is several weeks, driven mainly by the paper Director ID application for overseas directors and bank account checks. Our registration price is $696 all-in ($636 ASIC fee plus our $60 service fee). A nominee director, registered office service and accounting are separate costs. See the full cost breakdown.

9. Official resources

Ready to set up your Australian company?

Cheap Company Setup registers your Pty Ltd online for $696 all-in, with overseas shareholders and directors welcome as long as one director ordinarily resides in Australia. We can also help with your ABN and TFN, and look after your ASIC obligations as your registered agent after registration. Start your registration or get in touch.

This article is general information only and does not constitute legal, tax or financial advice. Requirements can change. Check the official resources above or get advice about your specific situation.