Who can be a resident director? The residence test and its edge cases

To fill the resident director seat, a person must be an individual aged 18 or over, not disqualified from managing corporations, and someone who ordinarily resides in Australia. Citizenship doesn't come into it: a permanent resident or a visa holder who has genuinely made Australia home can qualify, while an Australian citizen living abroad usually cannot. The test is about where the person lives, and it has to stay true for as long as they hold the seat.

Why the seat exists at all is explained in resident director Australia. This page is about the person.

The three basic conditions

1. A natural person, 18 or older. ABRS states that to be a director under the Corporations Act you must be an individual who is at least 18 and not disqualified, unless ASIC or a court permits the appointment (ABRS). A company, trust or partnership cannot be appointed. This differs from some other countries, where a corporate director is allowed alongside an individual.

2. Not disqualified. Covered in detail below.

3. Ordinarily resides in Australia. Section 201A uses the phrase "ordinarily reside". ASIC's guidance rephrases it as a director "who normally lives in Australia" (ASIC). Neither source gives a day count or a checklist.

Reading "ordinarily resides" sensibly

Without a numeric test, the safe reading is the ordinary meaning: Australia is where the person has their settled home and where they come back to. Practical signs include a home they live in here, family and work based here, and a pattern of time spent in Australia rather than abroad.

Treat these as indicators, not a formula. Tax residency rules use their own tests, and a person can be a tax resident on one set of facts and still not clearly "ordinarily reside" here for company law, or the other way round. Where a candidate's situation is borderline, ask your lawyer before appointing them, not after.

ASIC's stated purpose for the rule helps too: every company should have someone locally available who can meet Australian legal and reporting duties (ASIC: becoming a company director). A candidate who is rarely in the country and hard to reach fits the words poorly and the purpose worse.

Citizenship and visas

Two cautions on temporary visas. First, the residence question and the visa question are separate: corporate law asks where the person lives, while migration law decides whether they may work or be paid as a director. Second, a temporary visa can end. If the director has to leave when it expires, the company loses its resident director on the same day, so plan a successor early.

Who is disqualified

ASIC lists the people who cannot be company officeholders (ASIC: people who cannot be officeholders):

• Bankruptcy. Anyone currently bankrupt, or covered by a personal insolvency agreement under the Bankruptcy Act 1966.
• Certain convictions. Convictions for offences such as fraud or other dishonesty, breaching officeholder obligations, or acting against a company's interests. Eligibility returns 5 years after conviction where there was no prison sentence, or 5 years after release from prison.
• ASIC disqualification. ASIC can disqualify a person from managing corporations for up to 5 years, for example where, within the last 7 years, they were an officer of 2 or more companies that went into liquidation paying creditors less than 50 cents in the dollar.

Disqualification is automatic for a sitting director who is convicted of a relevant offence or becomes bankrupt. The company must then remove them and notify ASIC within 28 days. For a resident director, that also leaves the company without its local seat.

Ask any candidate directly whether any of these apply, and search ASIC's banned and disqualified registers before appointment.

Edge cases that cause real trouble

The director who moves overseas. Your Sydney-based director takes a job in Singapore and stays on the board "for now". Their name is still on the ASIC register, but the company no longer has a director who ordinarily resides in Australia. Treat a planned move as a resignation date and replace them before they go. Our page on replacing a resident director covers the urgent version.

Long postings and sabbaticals. A director who keeps their Australian home and returns after a fixed posting is in a different position from one who has relocated. The answer depends on the facts. Document them and take advice.

The founder's relative. Owners often ask a family member in Australia to act. That works legally if they qualify, but they take on full director duties and exposure for tax debts. Make sure they know what they're agreeing to, and give them information rights and insurance. Our guide to nominee directors explains why an uninformed director is a risk to both sides.

Employees. A local employee can be appointed, but the seat then depends on their employment. If they resign from the job, they usually resign from the board too.

The secretary seat. A Pty Ltd doesn't need a secretary. If it has one, at least one secretary must also normally live in Australia (ASIC). The same residence reasoning applies. See company secretary Australia.

Questions to ask a candidate before you appoint

Legal eligibility is the floor. Before appointing anyone, ask:

• Where is your home, and do you expect to live in Australia for the next few years?
• Are you bankrupt, under a personal insolvency agreement, or disqualified, and have you been convicted of a dishonesty offence in the past 5 years?
• Do you already have a Director ID?
• Will you have access to the company's accounts and lodgement status, and will the company indemnify and insure you?
• How much notice will you give if you need to step down?

Write the answers down. If the person later moves or becomes disqualified, a record of what you were told at appointment helps you show the board acted carefully.

Paperwork the candidate needs

A qualifying person still needs two things in hand before appointment.

1. A Director ID. Australian residents with the required identity documents usually apply online through ABRS using a myID of at least Standard identity strength (ABRS: apply for your director ID). They apply once, and the same ID covers every future board role.
2. Signed consent to act, which the company must obtain and keep before appointment.

Once appointed, the company has 28 days to notify ASIC. The mechanics are in appoint or remove a director, and the eligibility checker helps if you're still deciding on structure.

If nobody you know qualifies

That is the usual situation for a new subsidiary. A professional resident director lives in Australia, already holds a Director ID and is used to the role. Our director is Australian-resident and meets the test, and once identity checks are complete we aim to appoint within 5 business days. You can start here. Questions about your group's legal or tax position should still go to your own adviser.

General information, current on 27 October 2026. It isn't legal, migration, tax or financial advice.

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.