Open a Representative Office in Australia: Registration

Foreign businesses have the possibility to open a representative office in Australia. Also known as a liaison office, this is a type of business establishment that is created for non-commercial purposes only. Our consultants in company formation in Australia can help you understand what the Australian liaison office requires and can offer full legal representation during the registration formalities.

Quick Facts
What is a liaison office	A liaison office (or a representative office) refers to an establishment in which a foreign company will engage only in non-commercial activities.
Incorporation obligations	In order to open a representative office in Australia, investors must secure a registered address, appoint a local representative, and register for PAYG withholding and superannuation for its employees.
Types of activities it can undertake	A liaison office will generally conduct market research activities, which will help the parent company in establishing its business strategy if and when will enter the Australian market.
Have a registered office in Australia (yes/no)	Yes
Registration costs	There are registration costs for the representative offices of foreign banks ($10,000 application fee, $3,000 yearly fee).
Capital requirements	One can open a representative office in Australia without submitting any minimum capital.
Duration of the registration process	It can take around 3 to 5 weeks to open a representative office in Australia.
Tax obligations	Its tax obligations mainly derive from paying employment taxes. To this, it is necessary to calculate various operating costs.
Reporting formalities (yes/no)	Yes
Institution in charge with the registration formalities	Australian Securities &Investments Commission (ASIC), Australian Taxation Office (ATO), Australian Prudential Regulation Authority (APRA – in charge with the registration of representative offices of foreign banks).
Law applicable to liaison offices	Some of the provisions of the Corporations Act, the Australian Business Number Act, the Income Tax Assessment Act.
Documents that must be submitted by the parent company	Application form, the foreign company’s incorporation documents and certificates, a letter of appointment of a local representative, proof of having a registered address, proof of paying the registration fee (when applicable).
Licensing requirements	It depends on the industry.
Appointing an accountat (yes/no)	Yes
Services offered by our team	Our team can help foreign investors prepare the documentation for registration, address the local institutions, assist in the employment process and offer ongoing consultancy services, including accounting.

What is the legal status of a representative office?

The representative office is considered, from a legal point of view, a subdivision of the parent company, which does not have separate legal personality, much like the branch office – the difference being that the latter must conduct commercial activities.

What types of activities can the representative office carry out?

While it cannot develop commercial operations, it can still engage in a variety of activities. In the list below, our team of specialists in company formation in Australia presents some of the main activities the liaison office is entitled to develop:

market research;
maintain the company’s relationships with local clients and partners;
promote the company through advertising or marketing materials, etc.

What activities are prohibited when setting up a representative office in Australia?

The definition of commercial operations comprises specific types of activities, some of which are presented below. The liaison office can’t engage in any of the following:

generate revenue through the sale of goods or services or the collection of payments;
enter into contracts;
sign commercial deals;
charge fees to local clients.

What are the main registration steps for a liaison office in Australia?

Although the representative office is not set up for commercial purposes, it still needs to comply with various steps for company incorporation in Australia, which are designed specifically for this entity. In this case, the following must be met:

appoint 1 director (or an officer);
provided that the office will hire employees, they need to be registered with the Australian Taxation Office (ATO);
have a registered address in Australia (PO boxes are not accepted as suitable registered addresses for the liaison office).

Do I need to obtain special approvals if I operate in the financial industry?

Yes. One of the main differences is that foreign bank owners must obtain written consent from the Australian Prudential Regulation Authority (APRA). The institution will decide if the foreign bank meets the minimum standard imposed in this field, after which the financial institution can open a representative office in Australia.

What are the f ees charged to the liaison offices of foreign banks in Australia ?

Among the conditions for the registration of a liaison office set up by a foreign bank, we mention the payment of registration fees. Concerning this matter, our consultants present the main aspects you should know:

the Banking Act 1959 establishes the fees charged in this case;
the law mentions 2 types of fees – registration and yearly (operating) fees;
the application for consent obtained from APRA costs $10,000, while the yearly fee, through which the foreign bank shows that it wants to maintain its operations in Australia, is $3,000.

What are the tax implications for the parent company?

Considering that the liaison office does not carry commercial activities, the parent company is generally exempt from many tax compliance rules that could otherwise apply if the company had started commercial activities in Australia. Thus, when opening a representative office in Australia, the following apply:

the local entity is not considered a permanent establishment (the specific conditions can slightly vary based on the provisions of the double tax treaties signed by Australia with its partner countries or of other tax treaties);
the parent company is exempted from paying income tax in Australia;
the company does not need to submit tax returns in Australia.

We invite you to contact our team of specialists for further information on the registration of a liaison office in Australia. We can offer tailored assistance depending on the field in which the entity will operate.