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Holding Company in Australia

Holding Company in Australia

A holding company in Australia represents a type of entity that does not develop commercial activities, but rather holds interest in other companies, including owning and purchasing shares in such companies. 

This structure is, of course, suitable for large enterprises, and the companies that will be owned by the holding will represent its subsidiaries. The holding company is registered following the basic steps for company incorporation in Australia

However, particular conditions have to be met and our team of consultants in company registration in Australia can advise on such requirements, imposed by the local legislation. 

What are the advantages of a holding company in Australia? 

If you want to open a company in Australia as a holding, you will have various benefits which are guaranteed by the characteristics of this structure. 

Generally speaking, there are 7 core benefits investors can obtain, among which: 1) it represents a way to protect assets, 2) it reduces the corporate risk, 3) it can be a vehicle of reducing the overall tax burden. 

An important characteristic, which is the 4th advantage, is that the holding uses a centralized control system, which is suitable for large businesses belonging to the same structure. 

With regards to centralized control, we mention the 5th characteristic of the holding company in Australia, which is that the holding represents the centralized holder of all the assets of the corporate group. 

The 6th characteristic is that the holding is a vehicle for growth, accepting a wide range of investment strategies, and the 7th is that the company allows succession planning, which is a suitable way for continuity of the business. 

What are the steps for company formation in Australia? 

The holding company must follow the same registration steps that are prescribed at a national level for all legal entities. The entity has to be registered with the Australian Securities & Investments Commission (ASIC)

With regards to the incorporation of the holding company in Australia, investors should know the following: 

  • basic rules regarding its functioning derive from the AML/CTF Act Section 123 (12) and the Corporations Act 2001 Section 50;
  • the holding can be incorporated as a limited liability company, with 1 shareholder (who can have any nationality); 
  • the Corporations Act 2001 Section 46 stipulates that a legal entity can be considered a holding if it owns at least 50% of the shares of another company;
  • the holding must appoint 1 secretary, who is in charge with reporting any changes regarding the initial registration information; 
  • for instance, the secretary has the obligation to inform ASIC on any changes in a period of maximum 28 days since the management issued a decision to change any element of the holding

What is the process for opening a holding company in Australia? 

The registration process starts by filing different documents with ASIC. The basic step is to register a trading name for the company. Then, investors have to select the specific Australian region where they will set up a company in Australia

Another component of the incorporation is to assign for the holding company in Australia a registered business address, which is a compulsory step for all businesses that operate here. 

Our consultants in company registration in Australia can help you acquire a business address (you can rent an office space, purchase the services of a virtual office, or buy a commercial space available for sale). 

It is also necessary to open a corporate bank account, registered at a commercial bank in Australia. For most of the incorporation steps, foreign investors are not required to be physically present in Australia

If you need further information on the registration of a holding or if you need legal representation, our team of specialists in company incorporation in Australia is ready to help you.