Legal and Compliance Obligations for Subsidiaries in Australia
As an international business trying to expand or operating in Australia, you must comply with strict legal and regulatory requirements. These cover the entire business lifecycle, from company formation to corporate governance, financial reporting, and tax compliance. Understanding these obligations is essential for staying on the right side of regulators, avoiding penalties, and building long-term credibility for your international business in the Australian market.
By Ro Elvinia
What compliance requirements apply to foreign subsidiaries?
If you’re setting up or operating a subsidiary in Australia, there are several core compliance obligations you must meet. In summary, subsidiaries in Australia must:
- Appoint shareholders and directors with at least one resident director.
- Maintain a registered office in Australia.
- Register with the Australian Securities and Investments Commission (ASIC) and obtain an Australian Company Number (ACN).
- Keep accurate company and financial records for at least five years.
- Notify ASIC of any company changes within 28 days.
- Prepare and lodge financial reports, including audits where required.
- Meet ongoing tax obligations with the Australian Taxation Office (ATO).
The following sections outline the key requirements at each stage, from business setup through to ongoing operations.
Setting up your subsidiary
The first stage is about getting your international company legally established in Australia. Several requirements must be met before your business can begin operations and these include:
Directors and shareholders
Proprietary companies can have up to 50 non-employee shareholders. There are no restrictions on foreign ownership, but at least one director must be an Australian resident. The resident director acts as the main contact for the ATO and ensures tax compliance. In addition, directors are also required to obtain a Director Identification Number (DIN) before they can be appointed.
Registered office
You need a registered office address for receiving official documents and notices. Please note that a PO box cannot be used.
ACN
Once registered with ASIC, your company will be issued with a unique nine-digit ACN. This number must appear on documents such as ASIC lodgements, business letterheads, invoices, receipts, contracts, and official notices.
Meeting corporate governance obligations
After registration, ongoing corporate governance is critical to keeping your subsidiary in good standing. These obligations include:
Record keeping
A corporate register must be maintained with signed copies of key documents such as shareholder records, board minutes, and directors’ consents and resignations.
Company changes
ASIC must be notified of changes to directors, secretaries, addresses, shareholdings, constitutions, or parent company details within 28 days. Missing the deadline triggers late fees.
Annual company statement
Each year, ASIC issues an annual statement and review invoice. You’ll need to confirm the accuracy of your subsidiary’s details, pay the fee, and pass a solvency resolution within two months to confirm the company can meet its debts.
Ensuring financial and tax compliance in Australia
Your subsidiary must also meet financial reporting and tax obligations, which vary depending on company size:
Tax compliance
Subsidiaries must register for an Australian Business Number (ABN), register for GST if turnover exceeds $75,000, and lodge corporate tax returns.
Financial records
All subsidiaries must keep financial records for at least five years. Records can be paper-based or electronic but must clearly show income, suppliers, expenses, and the nature of each transaction.
Audit requirements
Large proprietary companies (meeting at least two of the following: $50 million in revenue, $25 million in gross assets, or 100 employees) must prepare and lodge audited financial statements. Small proprietary companies controlled by a foreign company are also generally required to lodge audited reports unless they qualify for relief.
It is important to note that relief may be available under ASIC Corporations (Foreign-Controlled Company Reports) Instrument 2017/204 if the company is not part of a large group and meets at least two of the following: revenue under $50 million, gross assets under $25 million, and fewer than 100 employees.
How ABN Australia can help
At ABN Australia, we’ve spent decades helping international businesses expand into the Australian market. From setting up your subsidiary and providing resident directors, to handling ASIC lodgements, corporate governance, and tax compliance, our team makes the process simple and stress-free.
With our local expertise and global outlook, you can focus on growing your business while we take care of the details. If you’re ready to set up a compliant Australian subsidiary, get in touch with ABN Australia today.
Published: 08th Sept 2025 | Last updated: 08th Sept 2025
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