Expanding Your Indian Company to Australia: Complete Guide [2026]

Set up your Indian business in Australia with expert guidance on RBI ODI compliance, entity structuring, FIRB thresholds, and the India-Australia tax treaty. Trusted by Indian companies expanding to Australia since 1984.

Last updated: March 1, 2026

• Indian companies can invest in Australia under the automatic route (up to 400% of net worth) without prior RBI approval
• The AI-ECTA trade agreement provides zero tariffs on 100% of Indian exports to Australia (since entry into force, December 2022)
• FIRB screening only applies to investments above A$347 million for non-sensitive business acquisitions (higher thresholds may apply to Indian investors under AI-ECTA)
• Allow 6-10 weeks for the full process, including RBI ODI reporting and ASIC registration
• Australia's Indian-born population has surpassed 900,000, creating a substantial business network

Why Indian Companies Are Expanding to Australia

India-Australia economic relations have entered a transformative era. Two-way trade in goods and services reached A$54.4 billion in FY2024-25, and the landmark Australia-India Economic Cooperation and Trade Agreement (AI-ECTA) has eliminated tariffs on 100% of Australian tariff lines for Indian imports since its entry into force in December 2022. For Indian companies evaluating international expansion, Australia presents a compelling combination of strategic, commercial, and demographic advantages.

The AI-ECTA Advantage

The AI-ECTA, signed in April 2022 and operational since December 29, 2022, has fundamentally reshaped market access between the two countries. From entry into force, 100% of Indian exports enjoy zero-duty access across every Australian tariff line. On the Indian side, over 85% of Australian goods exports entered India tariff-free from day one, rising to 90% by January 1, 2026. This is not a marginal improvement – it represents the complete elimination of tariff barriers for Indian goods entering the Australian market.

For Indian IT services, pharmaceutical, manufacturing, and professional services firms, AI-ECTA removes cost friction that previously disadvantaged Indian suppliers competing against domestic providers or firms from other FTA partner nations.

Strategic Partnership and Bilateral Momentum

The India-Australia Comprehensive Strategic Partnership, elevated through repeated 2+2 ministerial dialogues and bilateral summits, has placed the economic relationship on its strongest footing in decades. Both governments have identified technology, critical minerals, renewable energy, education, and defence as priority collaboration sectors. Indian companies operating in these verticals find a receptive regulatory environment and active government support for bilateral ventures.

India now ranks as Australia's fifth-largest trading partner, with total two-way trade in goods and services valued at A$54.4 billion in FY2024-25. Indian investment in Australia spans IT services, pharmaceuticals, mining services, education, and manufacturing – and the trajectory is upward. Companies establishing an Australian presence now are positioned to capture growth as tariff reductions deepen and the Comprehensive Economic Cooperation Agreement (CECA) – the broader follow-on trade deal – continues negotiation.

The Indian Diaspora Network

Australia's Indian-born population reached 916,330 by June 2024, according to the Australian Bureau of Statistics. The broader Indian-ancestry community exceeds one million people, representing approximately 3.4% of Australia's total population. This is not merely a demographic statistic – it represents a substantial professional, commercial, and cultural network that Indian companies can leverage for recruitment, market intelligence, client relationships, and community engagement.

Indian professionals occupy senior positions across Australia's banking, technology, healthcare, legal, and consulting sectors. For Indian companies entering the market, this diaspora provides an immediate talent pool of culturally aligned professionals who understand both business environments.

Sector Opportunities

Indian companies are finding particular success in several Australian sectors:

• IT Services and Software Development – Australian banks, insurers, and government agencies increasingly require onshore data sovereignty and local delivery teams. Indian IT firms (from Tier-1 giants to mid-market specialists) are establishing Australian subsidiaries to serve these requirements.
• Mining Services and Resources – India's demand for critical minerals (lithium, cobalt, rare earths) and Australia's mining expertise create natural joint venture and service delivery opportunities.
• Pharmaceuticals and Healthcare – Australia's Therapeutic Goods Administration (TGA) approval is globally respected. Indian pharmaceutical manufacturers use Australian subsidiaries for clinical trials, regulatory approval, and Asia-Pacific distribution.
• Education Technology – With over 100,000 Indian students studying in Australia annually, EdTech companies find a ready market and testing ground.
• Professional Services – Accounting, legal, engineering, and consulting firms serving Indian multinationals require local presence to support clients expanding into Australia.

Learn about company formation options for your Indian business

India-Australia Double Taxation Agreement (DTA)

Understanding the tax treaty between India and Australia is essential for structuring your expansion efficiently. The India-Australia Double Taxation Avoidance Agreement, originally signed on July 25, 1991 (entering into force December 30, 1991) and amended by protocol on December 16, 2011 (effective April 2, 2013), governs how income is taxed when flowing between the two countries.

Withholding Tax Rates Under the Treaty

The DTA establishes maximum withholding tax rates that override higher domestic rates, providing certainty for cross-border payments:

Permanent Establishment Rules

The DTA defines when an Indian company's activities in Australia create a taxable presence (permanent establishment, or PE). A PE typically arises when you have:

• A fixed place of business (office, branch, factory, workshop)
• A construction or installation project lasting more than 183 days
• An agent who habitually exercises authority to conclude contracts on behalf of the Indian company

Understanding PE rules is critical because establishing a PE without proper registration triggers Australian tax obligations and potential penalties. This is one reason many Indian companies prefer establishing a formal subsidiary or registered branch rather than operating through informal arrangements that may inadvertently create PE exposure.

Mutual Agreement Procedure (MAP)

If a tax dispute arises between the ATO and Indian Income Tax Department regarding the same income, the treaty's Mutual Agreement Procedure allows the two authorities to resolve the issue directly. This prevents double taxation in situations where both countries claim taxing rights over the same transaction.

India's Liberalised Remittance Scheme (LRS)

While LRS primarily applies to individual remittances (up to US$250,000 per financial year), Indian companies should note that corporate outbound investment follows separate RBI ODI regulations. However, individual Indian directors or shareholders may use LRS to make personal investments in the Australian entity, subject to Tax Collected at Source (TCS) of 20% on remittances exceeding INR 10 lakh (refundable against Indian income tax liability).

Transfer Pricing Implications

Both the ATO and India's Central Board of Direct Taxes (CBDT) actively scrutinise related-party transactions between Indian parent companies and Australian subsidiaries. Intercompany service fees, management charges, IP licensing, and cost allocations must be at arm's length and documented in contemporaneous transfer pricing documentation. India's transfer pricing regime is particularly rigorous, with substantial penalties for non-compliance.

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Best Entity Structure for Indian Companies

Choosing between a subsidiary and a branch is one of the most consequential decisions when setting up your Indian business in Australia. The right structure depends on your RBI compliance position, tax planning objectives, liability preferences, and long-term strategy.

Option 1: Australian Subsidiary (Pty Ltd)

An Australian Proprietary Limited (Pty Ltd) company is a separate legal entity, distinct from the Indian parent. It is the most common structure chosen by Indian companies expanding to Australia.

• Cleaner tax profile – The subsidiary pays Australian company tax (25% for base rate entities, 30% otherwise) on Australian-sourced income only. Franked dividends to the Indian parent carry no additional Australian withholding.

• POEM risk mitigation – India's Place of Effective Management (POEM) rules can deem a foreign company an Indian tax resident if key management decisions are made in India. A properly governed Australian subsidiary with local directors, local board meetings, and autonomous decision-making reduces this risk substantially.

• Market credibility – Australian clients, particularly banks and government agencies, prefer contracting with locally incorporated entities.

• Banking simplicity – Australian banks are more willing to open accounts for Pty Ltd companies than for foreign branch operations.

• Annual ASIC compliance, financial reporting, and tax lodgement obligations apply.

• Profits retained in Australia are not automatically available to the Indian parent – they must be formally distributed as dividends.

Option 2: Branch Office (Registered Foreign Company)

A branch is not a separate entity – it is an extension of the Indian Private Limited company operating in Australia under an ARBN (Australian Registered Body Number).

• Simpler profit repatriation – Branch profits flow directly to the Indian parent without dividend declarations or withholding tax.

• May suit project-based work – Construction, consulting, or fixed-term contract engagements sometimes suit a branch structure.

• Branch profits may still attract Australian tax plus potential additional branch profits tax.

• More complex annual ASIC filings, including lodging parent company financial statements.

• Banks may be reluctant to open accounts for branch operations.

Compare branch registration options

RBI Outbound Direct Investment (ODI) Regulations

Indian companies investing in Australia must comply with RBI's Overseas Direct Investment framework under the Foreign Exchange Management (Overseas Investment) Directions, 2022. Key requirements:

• The investment must not be in a sector prohibited under the automatic route (real estate, banking in certain cases, or FATF-restricted jurisdictions – none of which apply to Australia)

• The Indian entity must file Form ODI Part I through its Authorised Dealer (AD) bank before remitting funds

• Required for investment in financial services sector (banking, insurance) from entities not already in that sector

• Required for round-tripping structures where Indian assets are ultimately controlled

• Hold board meetings in Australia (not just rubber-stamping Indian decisions)

• Appoint local directors with genuine decision-making authority

• Maintain separate books, bank accounts, and operational autonomy

• Document that strategic decisions for Australian operations are made in Australia

FIRB Considerations

Most Indian investments in Australia do not require Foreign Investment Review Board (FIRB) approval. Under the Australia-India Economic Cooperation and Trade Agreement (AI-ECTA), Indian investors benefit from a higher screening threshold of A$560 million for non-sensitive commercial investments – significantly above the A$347 million threshold that applies to non-FTA countries. Below this threshold, standard business acquisitions do not require FIRB notification.

However, FIRB screening applies regardless of value for:

• Acquisitions of interests in national security businesses or land
• Investments in sensitive sectors (media, telecommunications, defence, critical infrastructure)
• Acquisitions of agricultural land exceeding A$15 million
• Residential land acquisitions by foreign persons

For most Indian IT, professional services, pharmaceutical, and general business expansions, FIRB approval is not required.

Timeline and Process: Setting Up in Australia from India

Establishing an Australian presence from India typically takes 6-10 weeks when managed professionally, accounting for RBI ODI compliance, ASIC registration, and banking setup. Here is the typical sequence:

Phase 1: Planning and RBI Compliance (Weeks 1-3)

Phase 2: Registration and Compliance (Weeks 3-6)

Phase 3: Operational Readiness (Weeks 5-10)

RBI Reporting After Establishment

Post-investment, the Indian parent company has ongoing RBI reporting obligations:

• Annual Performance Report (APR) – Filed through the AD bank within 12 months of the first remittance, and annually thereafter, covering the Australian entity's financial performance
• Form ODI Part II – Report any changes in shareholding, additional investment, disinvestment, or structural changes
• ECB/Trade Credit reporting – If intercompany loans are extended to the Australian subsidiary

Non-compliance with RBI ODI reporting can result in penalties under FEMA and, as of August 2025, can disqualify the Indian company from making any new overseas investments until past violations are fully rectified.

Common Pitfalls for Indian Companies Expanding to Australia

After assisting dozens of Indian companies with their Australian setup, we have identified recurring mistakes that can cause delays, unexpected costs, or regulatory issues. Here are the most critical pitfalls to avoid.

1. Underestimating Australian Employment Costs

Indian companies accustomed to Indian labour costs are often surprised by the true cost of employing staff in Australia. The base salary is only part of the picture:

Total on-costs typically add 25%-35% above base salary. An employee with a A$100,000 base salary may cost the employer A$125,000-A$135,000 when all mandatory contributions and insurances are included.

2. Assuming Indian Labour Law Flexibility Applies

Australia's employment framework is fundamentally different from India's. Key differences that catch Indian companies off guard:

• Modern Awards – Industry-specific minimum conditions (pay rates, overtime, penalty rates, allowances) apply automatically. There are 122 Modern Awards covering most industries. You cannot contract out of Award conditions.
• Unfair dismissal protections – Employees with more than 6 months' service (12 months for small businesses) have unfair dismissal rights. India's hire-and-fire flexibility for certain categories does not exist in Australia.
• Casual conversion rights – Casual employees who work regular patterns for 12+ months must be offered permanent conversion.
• Notice periods and redundancy – Statutory minimums apply regardless of contract terms (up to 5 weeks' notice and 16 weeks' redundancy pay based on tenure).

3. Failing to Complete RBI ODI Reporting

This is perhaps the most common compliance failure. Many Indian companies correctly file Form ODI Part I before remitting funds but then fail to submit the Annual Performance Report (APR) or forget to report changes via Form ODI Part II. Since August 2025, the RBI has enforced a strict policy: companies with unresolved past ODI reporting violations are disqualified from making new overseas investments until full rectification.

4. Transfer Pricing Documentation Gaps

Both the ATO and India's CBDT are aggressive on transfer pricing. Indian companies routinely underestimate the documentation burden, particularly for:

• Management fees charged by the Indian parent to the Australian subsidiary
• IT service charges and shared services allocations
• Intellectual property licensing and royalties
• Intercompany financing arrangements

Both countries require contemporaneous documentation (not retrospective justification). Australia imposes penalties of up to 50% of the tax shortfall for transfer pricing adjustments where documentation is insufficient.

5. Ignoring State-Level Obligations

Australia operates as a federation. Payroll tax, workers' compensation, and certain business registrations are state-level obligations that vary between New South Wales, Victoria, Queensland, and other states. Indian companies that set up in one state and then hire staff in another often fail to register in the second state, creating compliance exposure.

6. Not Understanding the Role of a Resident Director

Australian law requires at least one director of a Pty Ltd company to ordinarily reside in Australia. Some Indian companies appoint a friend or relative who lives in Australia without understanding the legal obligations this creates. A director has fiduciary duties, personal liability for insolvent trading, and statutory obligations that require genuine engagement. A professional resident director service is the appropriate solution.

Cost Breakdown: Setting Up an Australian Company from India

Understanding the costs of establishing and maintaining an Australian entity helps Indian companies budget accurately. Below are the key costs shown in both Australian Dollars (AUD) and approximate Indian Rupees (INR), using a conversion rate of 1 AUD = 55 INR.

One-Time Setup Costs

Ongoing Annual Costs

Sample First-Year Budget

For a typical Indian IT services company establishing a Pty Ltd subsidiary in Sydney:

This excludes office rent, employee costs, insurance, and technology infrastructure, which vary significantly based on the scale of operations.

Get a detailed quote for your Indian company's Australian expansion

Case Study: Indian IT Services Company Establishes Australian Subsidiary

The Challenge

A mid-sized Indian IT services company headquartered in Bangalore (annual revenue approximately INR 500 crore) needed to establish an Australian presence to serve two major banking clients that required onshore data sovereignty for application development and support services. Both clients mandated that the service provider operate through a locally incorporated entity with Australian-resident directors and staff working from Australian offices.

The company had not previously operated outside India and had no experience with RBI ODI compliance, Australian corporate law, or the practicalities of hiring in Australia.

Our Approach

Aus Business Register managed the end-to-end establishment process:

1. Structure Advisory – We recommended a Pty Ltd subsidiary rather than a branch, based on liability containment, client requirements for a locally incorporated entity, and POEM risk management. The subsidiary structure also provided cleaner transfer pricing arrangements for the intercompany service delivery model.

2. RBI ODI Compliance – We coordinated with the company's Indian legal team and AD bank to file Form ODI Part I under the automatic route. The initial investment of US$2 million (well within 400% of net worth) required no prior RBI approval.

3. ASIC Registration – We incorporated the Pty Ltd company within 3 business days, obtained the ABN and TFN within 48 hours, and registered for GST immediately.

4. Resident Director and Registered Office – We provided a professional resident director and Sydney CBD registered office address, satisfying both ASIC requirements and the banking clients' preference for a substantive local presence.

5. Banking – We facilitated introductions to both SBI Australia (for familiarity with Indian corporate documentation) and ANZ's India desk (for domestic Australian banking capabilities). The primary operating account was opened within 4 weeks.

6. Payroll and HR – We connected the company with employment law advisors to navigate Modern Awards, superannuation obligations, and the 482 (Temporary Skill Shortage) visa process for initial key personnel transferred from India.

The Result

The Australian subsidiary was fully operational within 6 weeks of initial engagement, including:

• Pty Ltd company registered with ASIC
• ABN, TFN, and GST registration active
• Two bank accounts operational (SBI Australia and ANZ)
• Professional resident director and registered office in place
• First 5 employees onboarded (3 transferred from India on 482 visas, 2 hired locally)
• RBI ODI reporting current and compliant

Within 18 months, the company expanded to 25 staff across Sydney and Melbourne, secured two additional enterprise clients, and established a reputation for onshore delivery quality that differentiated it from competitors still operating through offshore-only models.

Frequently Asked Questions: Indian Companies Expanding to Australia

Can an Indian Private Limited company register a company in Australia?

Yes. An Indian Private Limited company can establish either a subsidiary (Australian Pty Ltd) or a branch office (Registered Foreign Company) in Australia. The most common approach is incorporating a Pty Ltd subsidiary, which creates a separate legal entity wholly or partially owned by the Indian parent. The Indian company must comply with RBI's Overseas Direct Investment regulations when remitting capital to Australia, but for most investments, the automatic route applies with no prior RBI approval required (provided total overseas investment does not exceed 400% of the Indian entity's net worth).

Do Indian companies need RBI approval to invest in Australia?

For most investments, no prior RBI approval is required. Indian companies can invest in Australian entities under the automatic route, provided: (a) the total overseas investment does not exceed 400% of the Indian entity's net worth as per the last audited balance sheet, (b) the investment is not in a sector restricted under the automatic route (Australia is not a restricted jurisdiction), and (c) the investment is made through an Authorised Dealer bank with proper Form ODI Part I filing. Prior RBI approval is only required for investments exceeding the 400% threshold, investments in financial services by entities not already in that sector, or certain round-tripping structures.

Is there a free trade agreement between India and Australia?

Yes. The Australia-India Economic Cooperation and Trade Agreement (AI-ECTA) entered into force on December 29, 2022. From entry into force, 100% of Australian tariff lines apply zero duty to Indian imports. On the Indian side, 90% of Australian goods exports to India are tariff-free as of January 1, 2026. This is the most significant trade liberalisation between the two countries in history. A broader Comprehensive Economic Cooperation Agreement (CECA) is currently under negotiation and is expected to cover additional areas including services, investment, and digital trade. The AI-ECTA also provides preferential treatment for Indian services providers, including mutual recognition arrangements in certain professional services.

Can Indian directors serve on an Australian company board?

Yes, but with an important caveat. Indian residents can serve as directors of an Australian Pty Ltd company. However, at least one director must ordinarily reside in Australia (generally interpreted as being present in Australia for 183 or more days per year). Indian-resident directors who do not meet the residency requirement can serve as additional directors but cannot be the sole director. This is why many Indian companies engage a professional resident director service to satisfy the Australian residency requirement while retaining Indian nationals as the majority of the board.

How do I repatriate profits from Australia to India?

For a subsidiary (Pty Ltd), profits are repatriated through dividend declarations. If dividends are fully franked (paid from profits that have already been taxed in Australia at 25%-30%), no additional Australian withholding tax applies. Unfranked dividends are subject to 15% withholding under the India-Australia DTA. In India, dividends received from the Australian subsidiary are taxable in the hands of the Indian parent company at applicable corporate tax rates, with credit available for Australian taxes paid (under the DTA's double taxation relief provisions).

For a branch, profits flow directly to the Indian parent without a dividend mechanism. However, branch profits may be subject to both Australian income tax and additional considerations under the DTA regarding business profits attribution.

In all cases, repatriation must be reported to the RBI through the AD bank as part of ongoing ODI compliance.

Can Indian IT companies set up delivery centres in Australia?

Absolutely. This is one of the most common reasons Indian IT companies establish an Australian subsidiary. Australian enterprise clients – particularly in banking, financial services, insurance, government, and healthcare – increasingly require onshore delivery capabilities for data sovereignty, regulatory compliance, and security clearance purposes. An Australian Pty Ltd subsidiary can employ local staff and sponsor Indian professionals on Temporary Skill Shortage (subclass 482) visas for specialised roles. The subsidiary operates as a locally incorporated entity, satisfying client procurement requirements for Australian-based service providers. Our company formation services include structuring advice specific to IT services delivery models.

What visa options exist for Indian professionals transferring to Australia?

Several visa pathways support Indian professionals relocating to Australia for business operations:

• Subclass 482 (Temporary Skill Shortage) – Employer-sponsored visa for skilled workers in occupations on Australia's skills shortage lists. Valid for 2-4 years depending on the occupation stream. The Australian subsidiary must be an approved sponsor.
• Subclass 494 (Skilled Employer Sponsored Regional) – For positions in regional Australia, with a pathway to permanent residency.
• Subclass 186 (Employer Nomination Scheme) – Direct permanent residency pathway for highly skilled professionals.
• Subclass 188/888 (Business Innovation and Investment) – For Indian entrepreneurs and investors establishing substantial business operations.
• Subclass 400 (Temporary Work – Short Stay Specialist) – For short-term specialist activities (up to 3 months).

Visa sponsorship obligations add compliance requirements for the Australian entity, including minimum salary thresholds, labour market testing, and ongoing reporting to the Department of Home Affairs.

Do I need to report Australian operations to Indian authorities?

Yes. Indian companies with overseas subsidiaries or branches have multiple reporting obligations:

• RBI Annual Performance Report (APR) – Mandatory annual filing through the AD bank covering the Australian entity's financial performance. Due within 12 months of the first remittance and annually thereafter.
• Form ODI Part II – Required for any changes in the overseas investment (additional investment, disinvestment, restructuring, winding up).
• Indian Income Tax – The Australian subsidiary's income may be relevant for the Indian parent's tax filings, particularly regarding foreign tax credits, transfer pricing documentation, and Country-by-Country Reporting (CbCR) if the group's consolidated revenue exceeds INR 5,500 crore.
• FEMA Compliance – All cross-border payments, intercompany loans, guarantees, and commitments must comply with FEMA regulations and may require specific AD bank reporting.
• Company Law – Section 186 of the Companies Act, 2013 requires Indian companies to disclose overseas investments in their annual financial statements and board resolutions.

Non-compliance with these reporting obligations can result in FEMA penalties and, critically, disqualification from making future overseas investments.

Schedule a Free India-to-Australia Expansion Consultation

Expanding your Indian company to Australia involves navigating two regulatory environments simultaneously – RBI and FEMA on the Indian side, ASIC and the ATO on the Australian side. Getting the structure, compliance, and timing right from the outset saves significant cost and risk.

Aus Business Register has helped Indian companies across IT services, pharmaceuticals, mining services, professional services, and manufacturing establish compliant, operational Australian entities. With over 40 years of experience as registered ASIC agents, we understand both the Australian regulatory requirements and the specific compliance obligations that Indian companies face.

What We Cover in Your Consultation

• Entity structure recommendation – Pty Ltd subsidiary vs branch, tailored to your commercial objectives and RBI position
• RBI ODI compliance roadmap – Automatic route eligibility, Form ODI filing requirements, AD bank coordination
• FIRB assessment – Whether your investment requires notification (most do not)
• Cost estimate – Detailed budget including formation, resident director, registered office, and ongoing compliance
• Timeline – Realistic project plan from engagement to operational launch
• Banking introductions – Connections to SBI Australia, Bank of Baroda, or major Australian bank India desks

Get Started

Whether you are a Bangalore-based IT company, a Mumbai pharmaceutical manufacturer, a Delhi professional services firm, or a Chennai engineering company, we provide the local expertise you need to establish your Australian presence correctly, compliantly, and efficiently.

Aus Business Register is a division of Prime Partners, registered ASIC agents since 1984. We provide company formation, resident director, local agent, and compliance services for foreign companies establishing operations in Australia. We are not affiliated with ABN Australia or any government agency.

• Resident Director Services – Meet the Australian-resident director requirement
• Branch Establishment Services – Register as a foreign company in Australia
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