A foreign company has two ways to operate in Australia under the Corporations Act. It can incorporate a subsidiary, an Australian proprietary company with an ACN that needs a director who ordinarily resides in Australia. Or it can register itself as a foreign company, a branch with an ARBN that needs a resident local agent. The subsidiary separates Australian liabilities from the parent. The branch is the parent itself, operating here under its own name.
Most foreign groups choose the subsidiary, but the branch suits some cases. This guide sets out the differences that matter in practice and links to the detailed guides for each route.
The first question: do you need to register at all?
Section 601CD of the Corporations Act prohibits a foreign company from carrying on business in Australia unless it is registered. Section 21 says a company with a place of business in Australia carries on business here. It also lists activities that don't count on their own, including:
- holding directors' or shareholders' meetings here;
- maintaining a bank account;
- making a sale through an independent contractor;
- soliciting orders that become binding only when accepted outside Australia.
A software company selling online from abroad may sit outside the definition. A company that signs an office lease in Sydney almost certainly does not. Once you need an Australian presence, the choice below applies.
Side-by-side comparison
| Subsidiary (Pty Ltd) | Branch (registered foreign company) | |
|---|---|---|
| Legal entity | A new Australian company | The overseas company itself |
| ASIC identifier | ACN | ARBN |
| Registration form and 2026–27 fee | Via Business Registration Service, A$636 | Form 402, A$636 |
| Local officer required | At least one director who ordinarily resides in Australia (s201A(1)) | At least one local agent resident in Australia (s601CF, s601CG) |
| Registered office | Physical Australian street address, no PO box | Australian office open at set business-day hours, with a representative present (s601CT) |
| Registered office change | Within 28 days (s142(2)) | Within 7 days (s601CT(3)) |
| Officeholder change | Within 28 days (s205B) | Within 1 month (s601CV) |
| Annual ASIC cost | Annual review fee A$342 | Form 405 or 406, A$1,583 |
| Annual financial lodgement | Depends on size and ownership, and relief may apply (see below) | The whole foreign company's financial statements every calendar year, no more than 15 months apart (s601CK) |
| ABN | Entitled as a Corporations Act company | Entitled when registered with an ARBN |
| Liability exposure | Generally limited to the subsidiary's own assets | The parent's whole balance sheet |
Fees are from ASIC's 2026–27 fee schedule. ABN entitlement is confirmed by the Australian Business Register.
Five differences that usually decide it
1. Liability and ring-fencing
An Australian employee claim, customer dispute or tax assessment against a subsidiary is a claim against the subsidiary. The parent is not automatically liable, although banks, landlords and large customers often ask for a parent guarantee anyway. A branch gives no ring-fence: the Australian operation is the foreign company, so a judgment here can be enforced against it.
The ring-fence holds only while the subsidiary is run properly. Directors who let it trade while insolvent face personal exposure, and parent companies can be treated as directors if the board habitually follows their instructions. See shadow directors and parent control.
2. Disclosure of group accounts
This is the difference foreign boards notice most. A branch must lodge copies of the foreign company's own balance sheet, profit and loss statement and cash flow statement each calendar year under s601CK, in the form its home law requires. Those documents go on the Australian public register.
A subsidiary reports on itself, if it reports at all. A small proprietary company controlled by a foreign company that isn't part of a large group can rely on ASIC relief by a directors' resolution notified on Form 384, so it doesn't prepare or lodge financial reports (ASIC). A large proprietary company, meaning two of: consolidated revenue of A$50 million or more, consolidated gross assets of A$25 million or more, 100 or more employees, must lodge audited reports (ASIC thresholds). Details are in our financial reporting guide.
A privately held parent that doesn't publish accounts at home often chooses the subsidiary for this reason alone.
3. Who you need on the ground
A subsidiary needs a resident director. That person owes duties of care, good faith and proper purpose, can be exposed to insolvent trading claims and ATO director penalties, and must actually exercise judgement. A branch needs a resident local agent, who is answerable for the company's Corporations Act obligations and can be personally liable for penalties (s601CJ), but who doesn't sit on a board.
Both roles carry real responsibility, and the price of an outsourced director generally reflects the extra risk. The branch-side role is covered in our local agent guide. For the director role, see resident director in Australia.
4. Deadlines and compliance rhythm
The subsidiary works to one annual cycle, built around its review date: an annual statement, a review fee due within two months, and a solvency resolution unless a financial report was lodged in the previous 12 months. The branch's cycle is set by the parent's financial year and the 15-month gap rule, plus tighter notice periods: 7 days for a registered office change, against 28 days for a Pty Ltd.
Groups that run both often lodge the branch's changes late because they apply the Pty Ltd timetable. If you run both, keep separate calendars.
5. Tax
Tax often decides the question, and it is outside our scope. A subsidiary is taxed as a separate company. A branch is a foreign company taxed in Australia on what it earns here, and its home country's rules and any tax treaty decide how that profit is treated at home. Dividends, interest and transfer pricing work differently under each structure. Take advice from a cross-border tax adviser and see our company tax obligations guide for the lodgement map.
When a branch can make sense
- A short project or tender where the counterparty is happy to contract with the parent and nothing will continue afterwards.
- Regulated groups whose licensing is held at parent level and where regulators or customers expect the parent to be the contracting party.
- Parents that already publish full accounts, so s601CK disclosure costs nothing extra.
When a subsidiary is usually the better fit
- You will hire staff, sign a lease, or hold customer contracts that run for years.
- You want Australian liabilities separated from the group.
- The parent doesn't publish its accounts.
- Investors or a future buyer may want to acquire the Australian business on its own.
- Local banks and enterprise customers prefer to deal with an ACN entity.
What happens next on each route
Subsidiary. Board approval at the parent, Director IDs for every proposed director, the resident director's consent, a registered office, then registration. The sequence is in our Australian subsidiary setup guide. Individual founders, rather than corporate parents, should read registering a company in Australia as a foreigner.
Branch. Certified home-registry documents, Form 418 appointing the local agent, Form 402, then the ongoing s601C obligations. See the local agent guide.
Unsure which one applies to your facts? The eligibility checker asks the screening questions in two minutes. AG Resident Directorship provides resident directors for Pty Ltd subsidiaries and scopes branch enquiries separately, so tell us your plan through /start. We don't advise on tax or legal structure. Your advisers make that call.
This page is general information current at 27 October 2026. It isn't legal, tax or financial advice.
Frequently asked questions
Is a branch cheaper to run than a subsidiary?
Not on ASIC fees alone. Both cost A$636 to register in 2026–27, but a branch pays A$1,583 each year to lodge its financial statements or annual return, against A$342 for a proprietary company's annual review. Professional fees for a director or agent usually decide the total.
Does a branch need an Australian-resident director?
No. Section 201A applies to Australian companies. A registered foreign company instead needs a resident local agent under s601CF.
Can we start as a branch and move to a subsidiary later?
Yes, groups do restructure that way, but moving contracts, staff, assets and tax registrations from one legal entity to another is real work. Get tax advice before the move, not after.
Do we need to register at all if we only sell into Australia from overseas?
Not necessarily. Under s21, some activities, such as selling through an independent contractor or keeping a bank account, don't by themselves amount to carrying on business here. Where the line falls for your model is a question for your lawyer.
Official sources
- Corporations Act 2001 (Cth): ss21, 45A, 142, 201A, 205B, 601CD, 601CK, 601CT, 601CV legislation.gov.au
- ASIC: Obligations of foreign companies asic.gov.au
- ASIC: Register a company asic.gov.au
- ASIC: Small proprietary companies (foreign-controlled) asic.gov.au
- ASIC: Are you a large or small proprietary company? asic.gov.au
- ASIC: Fees for commonly lodged documents asic.gov.au
- Australian Business Register: Companies and other entities abr.gov.au
Checked against these sources on . Fees, thresholds and forms change: confirm with the source before you lodge.
General information about Australian law and practice, not legal or tax advice for your circumstances. Check the official sources, or ask your adviser, before you act.