Finding a suitable resident director can be challenging for overseas companies looking to establish and grow their subsidiary in Australia. Lansdowne Financial provides a resident director service but supplements this with a range of other business administration and support services all designed to work seamlessly with you in getting your business up and running faster allowing you to focus on servicing your customers sooner.
What is a Resident Director?
All companies registered in Australia must have local Australian representation on their board of Directors. Public companies must have a minimum of three directors, of which two are ordinarily resident in Australia, whereas Private companies must have at least one director that is ordinarily resident in Australia. Many overseas Listed or Public companies will establish a private company as its local subsidiary, as they are not seeking to raise capital in the Australian market and therefore choose to establish a Private company to simplify corporate structures and minimise compliance costs.
To be eligible to be an Australian resident director of a company, you must be a permanent resident of Australia, be above eighteen years of age and must consent in writing to take on the role and responsibilities of a director. Permanent residents are individuals with a valid Australian visa that entitles them to remain in Australia indefinitely.
Directors carry a legal and fiduciary responsibility for the oversight and stewardship of the company and are responsible to ensure that the company complies with all of its corporate responsibilities, including its legal, ethical, Health and Safety, compliance and financial responsibilities and are often held personally liable for actions or inactions of the company in this regard. As such, it is vital that all directors are fully informed as to their roles and responsibilities and have the necessary professional experience to carry out their roles competently in this regard. Non-executive directors carry even greater risk as they are held equally liable with executive directors but without the intimate knowledge nor control of their executive counterparts.
Companies have the option to choose between using an external provider of Australian resident director services, or appointing their own locally resident staff member, imparting essential duties, risks, and obligations onto that individual. It is vital, however that in the case of a staff member being appointed, that the individual be suitably qualified to understand the exposure and personal risks involved in accepting this responsibility. Larger businesses establishing an experienced management team can often accommodate an internal appointment, however smaller businesses typically prefer to use external professionals that will allow their executive management focus on their customers and growing the business rather than be distracted attempting to comply with legal and administrative requirements that are not core to business growth, profitability or other business objectives.
Why does a company need a Resident Director?
The Australian Corporations Act 2001 stipulates under Section 201A that all registered or incorporated proprietary companies in Australia appoint at least one individual resident director and at least two resident directors for public companies.
The Australian Securities and Investment Commission (ASIC) will not allow a company to either be registered or owned only by foreign residents, and will inspect the company structure to identify the individuals controlling the business that can be held accountable for the company’s actions or inactions, and be subject to the jurisdiction of the Australian courts. Should a company not have the requisite number of resident directors, it will be in breach of the Corporations Act 2001, which would result in the company not meeting its statutory obligations, incurring penalties for non-compliance and ultimately being wound up.
Duties and responsibilities of Resident Directors
Directors of Australian companies, both local and overseas, jointly take responsibility for the governance and management of the business. The resident director, although primarily a non-executive role, nevertheless carries the same risks and responsibilities as if they were actively involved in the business.
Indeed the risk is significantly higher, in that the resident director automatically falls within the jurisdiction of the Australian legal system, whereas actions taken against overseas directors tend to be difficult and expensive. Duties and responsibilities of company directors necessarily involve governance and control, and these in practical terms involve activities such as signing major contracts, agreements, opening bank accounts, reviewing and signing accounts and tax returns, transfer pricing compliance, company secretarial and public officer responsibilities and other fiduciary and administrative duties as required.
Depending on the size and experience of its internal staff, companies may choose to assign some of these duties internally, however most organisations opt to mitigate the inherent risks and rely on Australian resident director services provided by experienced professional firms, such as Lansdowne Financial.
Australian Resident Director services at Lansdowne Financial
At Lansdowne Financial we offer 30 years of financial management experience ranging from large, multinational organizations to start-ups and SME enterprises both in Australia and overseas. We are not a firm of solicitors or accountants seeking to broaden our product offering. Our experience has been gained working in senior finance roles within global businesses, start-ups and SMEs so we bring a hands-on practical approach to supporting your business set-up and growth in Australia. We act as your local partner, providing you with our local expertise, supplemented by a strong network of support services, such as tax advisors, accountants, lawyers, insurance brokers, FX and others all part of your local support team.
The primary focus of our Australian resident director services is to help you successfully navigate the myriad of issues, traps and pitfalls such that you can focus and fast-track your business growth, without imposing heavy responsibilities on your own staff, who may not be appropriately qualified for the role. Business dynamics change frequently particularly in the early years and with it, the skills required of the management team. As such, it is strongly recommended that professional external services are employed at least until the new business is well established and the executive team settled.
Our Australian Resident Director services include:
- Introducing you to our network of trusted advisers, built from establishing and operating businesses over many years, and referring you to those we believe best fit your business culture and the specialty skills required.
- Working with accountants and tax advisers on your behalf in terms of tax planning, transfer pricing, signing of statutory accounts and tax returns.
- As Public Officer, and Company Secretary, being the primary contact with the Australian Tax Office and Australian Securities and Investment Commission respectively.
- After hours support, designed to work in your time zone.
- Opening Bank accounts, which has become increasingly problematic for overseas businesses as banks struggle with new regulations and processes that comply with the know your customer framework due to anti-money-laundering and counter-terrorism concerns.
- Business and Financial guidance and support.
- Mailbox services including a physical address in North Sydney Business District
- 24-hour cost-effective foreign exchange transactions.
All of the above are undertaken for a fixed flat fee, irrespective how extensive our support and involvement may be.
Benefits of using our Resident Director services
There are a number of reasons why a foreign company may consider using our Australian resident director services.
- Value – We add value to your business, not just meet a legal requirement. Our goal is to support our clients to help them grow and succeed in the Australian environment by developing close working relationships based on professionalism, pragmatism, speed, honesty and
- Cost-effective – for businesses expanding into, or starting a new venture in Australia, it is important to contain costs while you establish your brand and grow your client base. Our cost-effective Australian resident director services will ensure you focus on growing your business whilst keeping your back-office and compliance costs to a minimum.
- Compliance – With their practical and extensive business knowledge, our nominee resident directors will keep your company compliant at all times in accordance with the Australian Corporations Act
- Confidentiality – As your trusted adviser, we understand the critical importance of business confidentiality in all our dealings, with all of our engagements providing a confidentiality / non-disclosure agreement as an integral part of the engagement.
Our Australian Resident Director requirements
Given the obligations and liabilities associated with being a resident director, we need to be very specific regarding the clients with whom we partner. We are only interested in working with people of the highest integrity, looking to establish and maintain an Australian business in full compliance with local regulations. We are pleased to work with start-up and SME businesses, but may need assurances around their ongoing liquidity and viability in some instances. That said, the most important aspect for us is the actual relationship between us, so direct access and open communication with key decision makers are an essential part of that relationship and probably the primary consideration in deciding whether to take on the role or not.
Our Australian resident director services are a cost-effective and practical solution to meeting the requirements of appointing an Australian resident director. Our proven track record and 30 years practical financial and business experience ensures that you are in capable hands that will work to deliver a superior service every time. Contact us at Lansdowne Financial and see how we can help you establish and grow your business in Australia.