An Australian subsidiary is an Australian company, usually a Pty Ltd, that your overseas company controls, normally by owning more than half of its shares. To set one up you need a company name, at least one director who ordinarily lives in Australia, a registered office in Australia, a director ID for every director and an ASIC registration on Form 201 ($636 government fee in 2026-27). The new company then registers for an ABN, a TFN and usually GST, and opens a bank account.
Most overseas companies that set up in Australia for the long term do it through a subsidiary. It is a new Australian company that your company owns. It trades, hires staff and signs contracts in its own name.
This guide explains what a subsidiary is, the steps to set one up, what your head office needs to provide, and what it costs. It is written for foreign companies, not for local start-ups.
What is a subsidiary company?
Under section 46 of the Corporations Act 2001, a company is a subsidiary of another company if the other company does any one of these three things:
- Controls the board. It can appoint or remove all or most of the directors.
- Controls the votes. It can cast, or control, more than half of the votes at a general meeting.
- Holds the shares. It holds more than half of the issued share capital.
A company owned by a subsidiary is also a subsidiary of the parent. When the parent owns all the shares, people call it a wholly owned subsidiary.
In practice, a foreign company's Australian subsidiary is almost always a proprietary limited company (Pty Ltd). It is a separate legal entity from the parent. Its debts are its own, so the parent's liability is generally limited to what it invested. For more on the company type, see what a Pty Ltd is.
Subsidiary or branch?
The other main option is to register your overseas company itself in Australia as a branch. A branch is not a separate company. The parent is directly liable for what the branch does.
- Subsidiary: new Pty Ltd, ACN, limited liability, needs a resident director.
- Branch: foreign company registered with ASIC, ARBN, no separate liability, needs a local agent.
Our branch vs subsidiary comparison sets out the cost, tax and liability differences side by side. If you already have a branch, see converting a branch to a subsidiary.
How to set up a subsidiary company in Australia: step by step
- Choose a company name. It must end in "Proprietary Limited" or "Pty Ltd" (s148) and meet ASIC's name rules. You can reserve a name for up to 2 months ($65 fee). If you do not choose a name, the company's ACN becomes its name, for example "ACN 123 456 789 Pty Ltd".
- Decide the internal rules. A company can use the replaceable rules in the Corporations Act, adopt its own constitution, or mix both. Most foreign parents want a constitution, so the parent's control and the share terms are written down.
- Appoint at least one resident director. A Pty Ltd must have at least 1 director, and that director must ordinarily reside in Australia (s201A(1)). Directors must be at least 18. Each one must sign a consent before appointment (s201D). If you have no one living here, a resident director service fills the role.
- Get a director ID for every director. Directors must apply for a director ID before the company is registered. Directors who live overseas and cannot get a myID apply on a paper form with certified identity documents. This is usually the slowest step, so start it first. See director IDs for non-residents.
- Arrange a registered office in Australia. Every company must have a registered office in Australia (s142). If the company does not occupy the premises, the occupier must consent to the address being used. A PO box will not do. Our registered office service provides a North Sydney or Gold Coast address.
- Set the shares and members. The company needs at least 1 member (s114) and no more than 50 non-employee shareholders (s113). Your parent company signs a written consent to become a member and agrees the number and class of shares and the amount it will pay.
- Lodge the registration with ASIC (Form 201). The application lists the company type, name, members, directors, addresses and share details. It must also say whether the company has an ultimate holding company, and give that company's name and place of incorporation (s117(2)). The ASIC fee for a Pty Ltd is $636 in 2026-27.
- Receive the ACN and certificate. ASIC gives the company its 9-digit Australian Company Number and a certificate of registration. ASIC posts the corporate key to the registered office. Set up the register of members (s169) and keep every consent on file.
- Register for tax. Apply for an ABN and a tax file number for the company. Register for GST when GST turnover reaches $75,000 a year, or earlier if you want to claim GST credits. Register for PAYG withholding before you pay staff. See ABN and GST registration.
- Open a bank account. Australian banks need the company's details and identity checks on directors and owners. Our guide to opening a business bank account as a foreign company compares the options.
- Appoint a public officer. The ATO requires a company that carries on business in Australia to appoint a public officer in writing within 3 months. See resident public officer.
Documents a foreign parent company needs
ASIC registration itself is an online application. But you need these details and signed papers ready before it is lodged:
- About the parent: full legal name, country of incorporation, company registration number and registered address. The parent is both the member and the ultimate holding company on the application.
- A signed member consent from the parent, signed by an authorised officer, confirming the shares it will take up and the amount it will pay for them.
- A board resolution of the parent approving the new subsidiary and naming who signs for it. ASIC does not need to see this, but you should keep it with the company records.
- For each director and any secretary: full name and any former names, date and place of birth, residential address, director ID and a signed consent to act.
- Registered office consent from the occupier, if the company will not occupy the premises.
- A constitution, if you are not using the replaceable rules alone.
- Identity documents for directors and owners, which we need for our own client checks and which banks will also ask for.
Our registration checklist is a printable version of this list.
How much does it cost to set up a subsidiary in Australia?
Government fees are fixed. Professional fees depend on what you need. These are our current prices.
| Item | Cost | When |
|---|---|---|
| ASIC registration fee (Pty Ltd) | $636 | Once |
| Company registration by us | From $900 (+ $636 ASIC fees) | Once |
| Resident director | From $6,000/yr + GST | Each year |
| Registered office address | From $500/yr (North Sydney or Gold Coast) | Each year |
| ABN and GST registration | From $600 (non-resident bundle) | Once |
| Bank account setup support | From $500 | Once |
| ASIC registered agent | From $250/yr | Each year |
| ASIC annual review fee | $342 | Each year |
Most clients take our Subsidiary Pty Ltd Package, From $8,500 for the first year. It covers the registration and ASIC fee, constitution and share register, ABN, TFN and GST, a resident director for a non-trading entity, ASIC agent services, the registered office and bank account support. See the full price list or try the setup cost calculator.
How long does it take?
- Director IDs: online applications are quick. Paper applications from overseas directors take longer, so start them first.
- ASIC registration: we usually register the company within 1 to 3 business days once all details, consents and director IDs are in place.
- ABN, TFN and GST: applied for straight after registration. Timing varies if the ATO needs to check identity.
- Bank account: depends on the bank and its checks on overseas owners.
Tax basics for a foreign-owned subsidiary
The subsidiary is an Australian company, so it pays Australian company tax on its profits. The rate is 30%, or 25% for a base rate entity. A base rate entity has aggregated turnover under $50 million and no more than 80% passive income. Aggregated turnover counts connected entities, which can include your overseas group.
When the subsidiary pays dividends to the parent, franked dividends carry no withholding tax. Unfranked dividends are taxed at 30%, or a lower rate under a tax treaty. Interest and royalties paid to the parent are also subject to withholding. See withholding tax on dividends, interest and royalties.
Dealings with the parent must be priced at arm's length, and borrowing from the parent is limited by the thin capitalisation rules. Our guide to how foreign subsidiaries are taxed covers these rules in more detail.
Ongoing obligations
- ASIC annual review: pay the annual review fee ($342 for a Pty Ltd in 2026-27) and check the company statement each year. Late fees are $102 within a month and $428 after that.
- Keep ASIC up to date: for example, a change of registered office must be lodged within 28 days.
- Keep a resident director: the company must always have at least one director who ordinarily lives in Australia.
- Registers and records: keep the member register, consents, minutes and financial records.
- Financial reports: a small Pty Ltd controlled by a foreign company may have to prepare financial reports (s292(2)(b)). See financial reporting for foreign companies.
- Tax: company tax return, activity statements, PAYG withholding and super for staff.
Our ASIC compliance service keeps these on schedule.
Request a quote
Tell us a bit about your situation. We reply the same business day with a fixed-fee quote.
Frequently asked questions
What is a subsidiary company?
A company controlled by another company. Under section 46 of the Corporations Act, that means the parent controls the board, controls more than half the votes, or holds more than half the issued shares. A foreign company's Australian subsidiary is usually a Pty Ltd.
How do I set up a subsidiary company in Australia?
Choose a name, appoint at least one director who ordinarily lives in Australia, get director IDs, arrange an Australian registered office, and have the parent consent to become the shareholder. Then lodge Form 201 with ASIC. After the ACN is issued, register for an ABN, TFN and GST and open a bank account.
Can a foreign company own 100% of an Australian company?
Yes. A Pty Ltd needs only one member, and that member can be an overseas company. The subsidiary still needs at least one director who ordinarily lives in Australia. Some investments also need foreign investment approval, so check the FIRB rules.
Does an Australian subsidiary need a resident director?
Yes. Section 201A of the Corporations Act requires a Pty Ltd to have at least one director who ordinarily resides in Australia. The other directors can live overseas.
How much does it cost to set up a subsidiary in Australia?
The ASIC fee is $636. Our registration fee is $900 on top. A resident director, registered office and tax registrations are extra, or our Subsidiary Pty Ltd Package covers them from $8,500 for the first year.
How long does it take to set up a subsidiary in Australia?
We usually register the company within 1 to 3 business days once all details and director IDs are ready. Director IDs for overseas directors and the bank account usually take the longest.
Is a subsidiary taxed separately from its parent?
Yes. The subsidiary lodges its own Australian tax return and pays company tax at 30%, or 25% if it is a base rate entity. Dividends, interest and royalties it pays to the parent can attract withholding tax.
This content is general information only and is not legal, financial or tax advice. Laws and regulations change often. For advice on your circumstances, speak to a qualified adviser.