Your Complete Guide to Resident Directors in Australia

By Australian law every Company operating in Australia must have an Australian Resident registered as a Director.

For most Australian businesses, this is not an issue as the owners / Directors already reside in Australia. For overseas or internationally based businesses – they need to appoint an Australian Resident Director as part of the company setup process.

International Companies can offer this role to their own staff – or else use the services of a firm such as Lansdowne Financial that specialises in this area. At Lansdowne, we take on the role of Resident Director to help you satisfy this requirement. Often referred to as a Nominee Director or Non-Executive Director, the role effectively carries the same responsibilities as would any other full-time working Director.

Accounting firms or solicitors may also provide this service as an add-on to their core offering. Our experience is that engaging a specialist in this area is typically the most efficient, and ultimately the most cost effective way forward for most businesses.

Unlike a firm of solicitors or accountants extending their product offering, Lansdowne’s core focus is working with you to deliver a quick and successful entry into the Australian market. We ensure your launch and ongoing operations in Australia go smoothly and are as streamlined as possible.

At Lansdowne Financial, our team works hard to ensure that your business is fully compliant with all Residential Director requirements in Australia.

Our Resident Director Services are led by Tony Kearney, who has over 30 years’ experience in senior finance & management roles – working with businesses of all sizes across a range of industries. Tony has held Executive Director-level positions with global and multi-national companies, as well as spending many years working with start-up & small-medium enterprises expanding into Australia. Tony has a passion for innovation and optimising business performance, but his primary focus is his relationship with you. As such, he handles most roles personally rather than delegating to support staff.

That said, the Lansdowne team still takes a hands-on practical approach in supporting your business set-up and growth in Australia. The primary focus of our Australian resident director services is to shoulder the burden of the regulatory environment, allowing you to focus on fast-tracking your business growth.

Longer term, we get to know your businesses in greater detail and add our local knowledge and experience to provide ongoing advice similar to that of a local CFO. For many, we work with accounting firms, lawyers, tax advisers etc and work with overseas head offices. Over time, we become your trusted adviser, forging long-term relationships with your management teams, both locally and overseas.

Lansdowne Financial includes all of the below within their standard Resident Director service offering.

• Local Business and Financial support.
• After-hours support, designed to work in your time zone.
• Taking on the additional roles of Public Officer and Company Secretary, being the primary contact with the Australian Tax Office and Australian Securities and Investment Commission respectively.
  Working with accountants and tax advisers on your behalf in terms of tax planning, transfer pricing, signing of statutory accounts and tax returns.
• Mailbox services including a physical address in North Sydney Business District if required.
• Opening Bank accounts. Banks now have new regulations and processes to know their customer, and this is not so easy when the business resides overseas. This has become increasingly problematic as a result of anti-money-laundering and counter-terrorism regulations.
• Introducing you to our network of trusted advisers, built over many years establishing and operating businesses, and referring you to those we believe best fit your business culture and the specialty skills required.
• Cost-effective foreign exchange transactions.

Lansdowne Financial provides a full service model for your Resident Director requirements. Our standard service offering includes all of these features.

Our fees are competitive and based on a flat rate per annum. Occasionally, business needs dictate a heavier involvement or greater support from Lansdowne, however no additional fees are added. No hidden extras, no surprises.

Value-Adding

We add value to your business, not just meet a legal requirement. Our goal is to support our clients grow and succeed in the Australian environment by developing close working relationships based on professionalism, pragmatism, commercial capability, speed and honesty.

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 customer 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 with Australian Corporate Law.

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.

Flexible

We have experience working with businesses of all shapes & sizes. Talk to us about your needs and see how we can help.

The Australian Corporations Act 2001 (Section 201A) requires all companies registered in Australia to have local Australian representation on their board of Directors. Private companies must have at least one director that resides in Australia. Public companies must have a minimum of three directors, of which two are ordinarily resident in Australia.

The Australian Securities and Investment Commission (ASIC) will not allow a company to either be registered or controlled solely by foreign residents. They will examine the company structure to identify the individuals in control of the business, and will hold those individuals accountable for the company’s actions or inactions.

Should a company not have the required number of resident directors, it will be in breach of the Corporations Act 2001. By not meeting its statutory obligations, it will incur penalties for non-compliance and will ultimately be wound up.

To be eligible to be an Australian resident director of a company, you must first be a permanent resident of Australia.

In addition, you must 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 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.

Resident Directors in Australia will typically be involved in activities such as signing major contracts, agreements, opening bank accounts, etc. Every year, they will review and sign accounts and tax returns, ensure transfer pricing compliance, and company solvency. They will also perform company secretarial, public officer and other fiduciary and administrative duties as required.

The risks are actually higher for local directors, as they automatically fall within the jurisdiction of the Australian legal system. Actions taken against overseas directors tend to be difficult and expensive, hence most claims will target the local director first.

All Directors carry a legal and financial responsibility for the oversight and management 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.

Directors 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.

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.

At Lansdowne Financial, we value direct open communication and trust as key ingredients to a lasting professional relationship.

The Australian economy is a fantastic growth opportunity for many businesses.

With a high performing economy, relatively low unemployment & a consumer base seeking global offerings – it is a key expansion market for many international businesses.

Australia’s stable and high-performing economy makes it a country with an abundance of lucrative business opportunities.

Our clients vary in size & industry – from publicly listed companies to start-ups and even virtual operations with no local employees.

Some are larger companies leveraging their scale & expanding into this market with several employees from the outset, whilst others are smaller businesses leveraging the interconnected world of online shopping & tapping into a new market place.

Lansdowne Financial assists our partners with all aspects of company setup in Australia. We work seamlessly with our clients to help get them up and running faster, allowing them to focus on servicing their customers sooner.

Below is an overview of what is required to establish your business in Australia. (While the below list may seem daunting, our objective is to make this as fast and as simple as possible for you, so you can quickly get your business to market and focus on the opportunities that exist instead of being burdened in regulatory setup procedures):

• Registering a company and obtaining an ACN (Australian Company Number)
• Appointing a board of Directors, one of whom must be locally resident in Australia Applying for an ABN (necessary to trade and raise invoices, and a requirement for a ‘.com.au’ web address)
• Applying for a Tax File Number
• Registering for GST (similar to VAT)
• Registering as an Employer (thus enabling employees)
• Providing a registered address & physical place of work (cannot be a PO box)
• Register for Workers compensation Insurance
• Appoint a Public Officer and notify the ATO (Australian Tax Office)
• Appoint a Company Secretary
• Setting up a Bank account
• Setting up Merchant Facilities
• Appoint trusted Tax Accountants and notify the ATO
• Prepare quarterly returns (Business Activity Statements), PAYG etc and submit to ATO
• Attend to compulsory employee superannuation contributions

For further information on any of the above, please contact us, or visit
asic.gov.au/for-business/starting-a-company/