Representative Office in Australia – Setup Guide

Last Updated: March 2026

By Aus Business Register

Disclaimer: This guide is for general informational purposes only and does not constitute legal or tax advice. Whether a particular arrangement constitutes a representative office, branch, or permanent establishment depends on the specific facts. We recommend engaging a qualified adviser for advice specific to your circumstances.

Not every foreign company entering the Australian market needs to register a full subsidiary or branch immediately. A representative office allows a foreign company to establish a presence in Australia for market research, liaison, and promotional activities – without registering with ASIC and without triggering Australian tax obligations.

This guide explains what a representative office is, what it can and cannot do, and when it makes sense as an entry strategy compared to a branch or subsidiary.

What Is a Representative Office?

A representative office is an informal, non-trading presence established by a foreign company in Australia. It is not a separate legal entity, it is not registered with ASIC, and it does not carry on business in Australia within the meaning of the Corporations Act 2001.

The purpose of a representative office is limited to preparatory and auxiliary activities – gathering market intelligence, maintaining relationships, promoting the parent company’s brand, and exploring business opportunities. It cannot generate revenue, enter into contracts, or conduct commercial transactions.

A representative office is often the first step for foreign companies that want to test the Australian market before committing to a full subsidiary or branch registration.

Permitted Activities

The following activities are generally considered preparatory or auxiliary and are permitted for a representative office:

• Market research – gathering data on the Australian market, competitors, and consumer preferences
• Liaison – maintaining relationships with existing or potential clients, suppliers, and partners
• Attending trade shows and conferences – promoting the parent company and exploring opportunities
• Brand promotion – advertising, distributing marketing materials, building awareness
• Information gathering – collecting data on the regulatory environment and business opportunities
• Coordinating with Australian parties – facilitating introductions and arranging meetings (without entering into binding agreements)

Prohibited Activities

A representative office must not:

• Enter into contracts on behalf of the parent company in Australia
• Generate revenue – sell goods or services, accept orders, or collect payments
• Negotiate or conclude commercial deals that bind the parent company
• Provide services for a fee to Australian clients
• Carry on any activity that constitutes “carrying on business” under the Corporations Act

If any of these activities are conducted, the foreign company would be required to register with ASIC as a foreign company (branch) or incorporate a subsidiary.

Legal Basis – Corporations Act 2001

Section 21 of the Corporations Act 2001 defines what constitutes “carrying on business” in Australia. Importantly, subsection 21(2) lists activities that do not constitute carrying on business:

• Holding meetings of directors or shareholders, or carrying on internal affairs
• Soliciting or procuring orders that only become binding if accepted outside Australia
• Conducting an isolated transaction completed within 31 days (not one of repeated similar transactions)
• Investing funds or holding property

Because a representative office restricts itself to activities within these exclusions, it does not trigger the registration requirement under Section 601CD (which requires foreign companies “carrying on business” in Australia to register with ASIC).

Source: Corporations Act 2001 – Sections 21 and 601CD

Tax Implications

If a representative office conducts only preparatory or auxiliary activities:

• No permanent establishment (PE) is created under Australia’s tax treaties
• No Australian income tax obligation on the foreign parent company’s profits
• No company tax return needs to be lodged in Australia

Under Australia’s DTAs (which follow the OECD Model Tax Convention), business profits of a foreign company are only taxable in Australia if the company has a PE here. Activities of a “preparatory or auxiliary character” are specifically excluded from creating a PE under Article 5 of most treaties.

For companies from countries without a DTA with Australia, the analysis is different – income “sourced in Australia” is generally taxable. However, if the representative office generates no Australian-source income, there should be no tax liability. Professional advice is recommended for non-treaty situations.

Source: ATO – Permanent establishments | ATO Taxation Ruling TR 2002/5

Do You Need an ABN?

Generally no. An ABN is only available to entities “carrying on an enterprise in Australia” under the A New Tax System (Australian Business Number) Act 1999. Since a representative office does not carry on an enterprise, it is not entitled to an ABN.

In limited circumstances, a foreign entity with a representative office may need to register for GST or obtain an ABN – for example, if it makes supplies connected with Australia in the course of an enterprise carried on elsewhere. This would typically require professional advice to assess.

Employing Staff Through a Representative Office

Since a representative office is not a registered legal entity in Australia, directly employing staff creates practical and compliance challenges:

• No ASIC registration means no ABN, making it difficult to meet PAYG withholding and superannuation obligations
• Fair Work Act compliance requires paying employees under applicable awards or enterprise agreements
• Superannuation must be paid at the Superannuation Guarantee rate (currently 12%) into employees’ nominated super funds

Practical Solutions

• Employer of Record (EOR): A licensed Australian entity acts as the legal employer on your behalf, handling payroll, tax withholding, superannuation, and Fair Work compliance. Aus Business Register offers EOR services for this purpose.
• Independent contractors: Engaging contractors rather than employees may be appropriate for limited roles, but the ATO and Fair Work closely examine whether the relationship is genuinely one of contracting rather than employment.

Permanent Establishment Risk

The boundary between a representative office and a taxable permanent establishment requires careful management. A PE is created if:

• The office becomes a fixed place of business through which business is carried on (beyond preparatory/auxiliary activities)
• A dependent agent has and habitually exercises authority to conclude contracts on behalf of the parent
• Services are provided for more than 183 days in any 12-month period (in some treaties)

Anti-fragmentation rules: Modern treaties (post-2017 BEPS changes) include provisions that may deem a PE to exist if multiple activities – each individually preparatory or auxiliary – are combined and collectively constitute a core business activity of the enterprise.

If a PE is found to exist, the foreign company becomes liable for Australian tax on the profits attributable to that PE, and must lodge tax returns accordingly.

FIRB Implications

Setting up a representative office does not generally trigger FIRB notification. FIRB screening applies to specific actions by foreign persons – primarily acquiring interests in Australian securities, land, or businesses above monetary thresholds.

A representative office that leases office space (lease under 5 years) and conducts preparatory activities does not involve acquiring an interest in an Australian business or asset above the relevant threshold. The exceptions are:

• National security businesses: $0 threshold – any activity in critical infrastructure sectors always requires notification
• Foreign government investors: $0 threshold for any interest in Australian land

See our FIRB Guide for detailed threshold information.

Representative Office vs Branch vs Subsidiary

When a Representative Office Makes Sense

A representative office is typically the right choice when:

• Market testing: You want to explore the Australian market before committing to a full business registration
• No commercial activity: You do not intend to sell products, provide services, or enter contracts in Australia in the near term
• Low commitment: You want a presence with minimal setup costs and ongoing compliance
• Short-term exploration: You plan to assess the market for 6-18 months before deciding on a permanent structure
• Liaison only: Your Australian presence will be limited to relationship management, attending events, and gathering intelligence

When a representative office is NOT appropriate:

• You need to sell goods or services in Australia
• You want to enter into contracts with Australian counterparties
• You need to hire employees directly (consider an Employer of Record arrangement instead)
• You plan to generate any form of revenue in Australia

Transitioning to a Branch or Subsidiary

Many companies start with a representative office and later upgrade to a branch or subsidiary when they are ready to commence commercial operations. The transition process involves:

1. Deciding on structure – branch (ARBN registration) or subsidiary (Pty Ltd incorporation). See our branch vs subsidiary comparison.
2. ASIC registration – Form 402 for a branch or Form 201 for a subsidiary
3. ABN and GST registration – required once you commence business
4. Appointing a local agent or resident director – branches need a local agent; subsidiaries need a resident director
5. Opening a business bank account – see our banking guide

Aus Business Register manages this transition regularly for clients who have tested the market through a representative office and are ready to commence operations.

How Aus Business Register Can Help

Whether you are exploring a representative office or ready to register a full business presence, Aus Business Register can assist at every stage:

• Market entry advisory – helping you understand which structure (representative office, branch, or subsidiary) best fits your current needs
• Employer of Record – if you need Australian-based staff without registering a business entity
• Company formation – when you are ready to transition from a representative office to a subsidiary or branch
• Registered office and virtual office – providing a professional Australian address
• Adviser referrals – connecting you with tax and legal professionals for PE risk assessment and structuring advice

Request a quote to discuss your market entry strategy, or call us on +61 2 8599 9890.

Frequently Asked Questions

Does a representative office need to register with ASIC?

No. A representative office that only conducts preparatory and auxiliary activities is not “carrying on business” in Australia and does not need to register with ASIC. Registration is only required when you begin carrying on business – at which point you would need to register a branch or incorporate a subsidiary.

Can a representative office open a bank account in Australia?

This is generally difficult. Australian banks typically require an ABN and ASIC registration to open a business bank account. A representative office, which has neither, would not meet these requirements. If you need Australian banking services, consider registering a subsidiary or branch.

Can a representative office hire employees?

Not directly in a practical sense – the lack of ASIC registration and ABN makes it very difficult to comply with PAYG withholding and superannuation obligations. Most companies in this situation use an Employer of Record (EOR) arrangement, where a licensed Australian entity acts as the legal employer.

When does a representative office become a permanent establishment?

A PE is created when activities go beyond “preparatory or auxiliary” – for example, if staff begin negotiating and concluding contracts, or if the office effectively becomes the place where business decisions are made. The specific threshold depends on the DTA between Australia and the parent company’s home country. This is an area where professional advice is strongly recommended.

How long can I operate a representative office?

There is no time limit on operating a representative office, provided activities remain genuinely preparatory or auxiliary. However, the longer an office operates and the more extensive its activities become, the higher the risk of the ATO arguing that a permanent establishment exists. Regular review of activities against PE criteria is advisable.

This guide was prepared in March 2026 based on the Corporations Act 2001, ATO guidance, and Australia’s tax treaty framework. The distinction between a representative office and a permanent establishment depends on specific facts and circumstances. Always seek professional advice for your situation.