Foreign companies wishing to enter the Australian market often choose to set up a separate Australian entity in the form of a Pty Ltd (proprietary limited) company. This structure provides a number of advantages, including limited liability for shareholders and a more streamlined tax regime. Moreover, a Pty Ltd company is better equipped to manage local operations because it’s familiar with Australian business practices and regulations. Foreign companies can also benefit from the increased credibility that comes with having a local presence.
Compared to a registered foreign company, a Pty Ltd would be no different from any other Australian company. This may make other local businesses and government bodies more comfortable interacting with the foreign company. In addition, a Pty Ltd company can help boost the foreign company’s credibility in the eyes of potential customers and partners.
An Australian Pty Ltd is a business structure that’s required to have a minimum of one shareholder and a maximum of 50 non-employee shareholders. Many foreign companies entering the Australian market use this type of company because it offers limited liability protection to shareholders. In addition, a Pty Ltd company must have a registered office in Australia and must comply with certain other requirements set by the Corporations Act 2001.
Foreign companies are required to have a registered office located in Australia, at least one resident director, and if required, a resident company secretary. This is to ensure the company is fully compliant with Australian law and can be contacted if necessary.
This type of company structure provides shareholders with limited liability in the event of a wind-up, meaning that their liability is limited to the unpaid amount (if any) on their shares. This is an attractive proposition for foreign companies, because it reduces their exposure to risks associated with entering a new market. In addition, the Pty Ltd structure also offers foreign companies a number of other benefits, including the ability to raise capital through the sale of shares and the flexibility to tailor the company’s constitution to suit their business needs.
When entering the Australian market, foreign companies are subject to a number of restrictions when it comes to fundraising activities. One such restriction is the requirement to lodge a prospectus when seeking to raise funds from the public. This requirement creates a significant compliance burden for foreign companies, and as a result, many choose private equity sales as a means of raising money. While this may limit the amount of funds that can be raised, it typically results in a quicker and easier process.
Foreign companies will typically find establishing and incorporating a Pty Ltd company in Australia to be fast, easy, and inexpensive. This is one of the many reasons why Australia is an attractive destination for foreign investment. The relatively simple process of setting up a company in Australia can be undertaken online, and there are a number of registered agents who can help and offer advice.