There are a number of important considerations to take into account when deciding how to enter the Australian market and establishing a business. 


Depending on your business’ circumstances, your options include either outsourcing your employment and administrative duties to an EOR, registering your foreign entity as a branch, or establishing a subsidiary company in Australia.

Should you choose the latter, it’s important to know that by Australian law, foreign companies establishing a local legal entity (subsidiary) in Australia must appoint at least one local resident Director and one local resident Public Officer. One person can fulfill both roles.

As an international company, this requirement can easily put a spanner in your expansion plans, which is where outsourcing your local directorship to a 3rd party partner comes into play.

But before going into why that is, let’s explore the ins and outs of Australian local directorship, starting with…


What Are The Legal Requirements Relating To Directors?

The Australian Corporations Act 2001 (Section 201A) requires all companies registered in Australia to have local Australian representation on their board of Directors. 

A private proprietary company (Pty Ltd) must have at least one director that ordinarily resides in Australia. A public company must have a minimum of three directors, of which two must be Australian residents.

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.


Who Is Eligible To Fill The Role Of Resident Director?

To be eligible to be an Australian resident director of a company, one must:

– have ordinary residency in Australia, be a permanent resident of Australia, or hold Australian citizenship.

As a quick reminder, permanent residents are individuals with a valid Australian visa that entitles them to remain in Australia indefinitely.

– be 18 years of age or older

consent in writing to take on the role and responsibilities of a company director.


Can I Appoint An Australian Employee As A Resident Director?

Foreign businesses looking to expand to Australia can most certainly elect an employee as a resident director for their local Australian subsidiary.

 However, it is important to note that this appointment imposes certain duties, risks, and obligations onto that individual. Should a staff member be appointed, it is vital that they be suitably qualified to understand the responsibilities of the role. You should also ensure that they are aware of the exposure and personal risks involved in accepting such a responsibility.

Considering this role is crucial in the smooth incorporation and every day running of the business, it is also imperative you trust the person you appoint 110%. 

Choosing an employee to fill all of the above requirements and eligibility criteria can be quite daunting and close to impossible, which is why most businesses looking to expand compliantly choose to minimise these inherent risks by relying on a local third party partner.

This allows their key Australian staff to focus on their core competencies rather than be distracted attempting to comply with legal and administrative requirements.



What Are The Duties & Responsibilities Of A Resident Director In Australia?

Due to Australian regulations, a company director is responsible for significant aspects of the business regardless of whether he or she is appointed in a nominee capacity, or as an actual managing director. 

The general duties imposed by the Corporations Act on directors and officers of companies include the following responsibilities:

– to exercise their powers and duties with the care and diligence a reasonable person would have, including taking steps to ensure they are properly informed about the company’s financial position and the company doesn’t trade if it is insolvent.

– to exercise their powers and duties in good faith in the company’s best interests and for a proper purpose.

– not to improperly use their position or information obtained through their position to gain an advantage for themselves or someone else, or to cause detriment to the company.


With those duties in mind, resident directors in Australia will typically be involved in activities such as signing major contracts, agreements, opening bank accounts, etc. They will also assist with company secretarial compliance as well as other fiduciary and administrative duties as required. 

Every year, they will also review and sign accounts and financial records as well as ensure compliance and company solvency.

The local resident director can also take on the Public Officer responsibilities (and be the main point of contact with the ATO) for any tax compliance obligations such as tax returns, BAS returns, TP compliance, etc.

The Corporations Act 2001 also imposes responsibilities on the company. As a director of the company, the local resident director will be responsible for ensuring that the company complies with these obligations. These company responsibilities include: 


– Having a current registered office

Your business must have a current registered office in Australia and the director must inform ASIC of its location.


– Having a principal place of business

Should your business operate from a location different from the registered office, the director must inform ASIC of this fact and the location.


– Disclosing personal details of directors

The resident director must inform ASIC of the name, date of birth and current residential address of all company directors.


– Keeping financial records

Your business must keep up-to-date financial records that correctly record and explain the company’s financial position. Larger companies have additional obligations to lodge financial reports with ASIC.


– Keeping company records

Your business must keep an up-to-date register of members and office holders and minutes of meetings, including circulating resolutions.


– Notifying ASIC of key changes

ASIC must be notified of any key changes to the company’s details.


– Paying relevant fees to ASIC

Directors must ensure on-time payment of all ASIC fees, such as the annual review fee.


– Checking annual statements

Directors must ensure that the company’s details on the ASIC register are accurate and up to date.


What Are The Risks Involved?

All directors carry a legal and financial responsibility for the oversight and management of the company and are responsible to ensure that the business 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.

Although primarily a non-executive role, the resident director carries nevertheless the same risks and responsibilities as if they were actively involved in the business.

The risks are actually higher for local directors, as they fall within local jurisdiction. In fact, most claims will target the local director first as actions taken against overseas directors tend to be too difficult and expensive.

Increasing corporate governance and regulatory surveillance means Australian companies, directors and officers are under greater pressure to perform their duties and obligations with meticulous care.

Failure to do so may lead to personal liability for the individual director or for the entire board of directors, regardless of whether they are acting in a part-time, honorary or non-executive capacity.



For instance, under the Corporations Act 2001, if a director breaches a duty or fails to meet an obligation, they can be disqualified from acting as a director of a company in the future. 

If dishonesty or recklessness is found to be a factor in their breach of general duties, the breach can be determined a criminal offence and substantial criminal penalties can apply, including up to 15 years’ imprisonment.

If a director is found to have failed on their duty to prevent insolvent trading, they may also be found guilty of a criminal offence, and in serious cases, can face up to five years imprisonment and/or financial penalties of up to $200,000, which can include: 

– Compensation to an aggrieved party

– A fine or penalty 

– The other party’s legal costs 

– Their own legal defence costs 

– Interest on any of the above 


There are also some risks that can’t be covered by Directors and Officers insurance. These include: 

– Loss of reputation 

– Personal financial losses 

– The other party’s legal costs 

– Fines and penalties for criminal offices, and certain civil pecuniary penalties

– Fraud, wilful misconduct and criminal conduct


All in all, the risks involved in being a local resident director are not to be taken lightly. Ensuring compliance and minimising the risks of setting up a company in Australia is one of the main reasons why foreign businesses tend to gravitate towards outsourced resident director services from an expert 3rd party. 


How Do Australian Resident Director Services Help?

In a nutshell, resident director services should enable smooth business incorporation and everyday operations for your business.

Concretely, your Resident Director plays a key role in getting your business up & running in Australia by ensuring you meet all legal & regulatory requirements. This includes: 

– Registering a company and obtaining an ACN (Australian Company Number)

– Applying for an Australian Business Number (ABN), which is necessary to trade and raise invoices, and a requirement for a ‘’ web address.

– Applying for a Tax File Number (TFN)

– Registering for Goods & Services Tax (GST), which is equivalent 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 if required.

– Setting up a Bank account

– Appoint trusted Tax Agent and notify the ATO

– Appoint Tax Auditors and notify ASIC

– Prepare quarterly returns (Business Activity Statements), Pay as You Go (PAYG) and submit to the ATO


Once Setup – the desired level of involvement from your Resident Director will vary depending on your needs and business goals.

Commonly, your Resident Director will play a compliance role at a minimum – signing off on accounts, contracts and so on as well as assisting with Company Secretarial compliance. 

Since all businesses must also appoint a resident Public Officer under the Income Tax Assessment Act 1936, the local resident director can also take on these responsibilities for ease and efficiency’s sake.


What Are The Benefits Of Partnering With A Third Party Partner?


Outsourcing your local directorship to a 3rd party partner guarantees you access to a wealth of experience that you would otherwise lack. 

Working with foreign businesses in Australia on a daily basis, the partner will be able to provide the necessary documentation and paperwork to ensure successful incorporation takes place so that you don’t have to worry about it.

This will enable your business expansion to be faster and more efficient than if you were to figure everything out yourself.


Added Value

Some partners offer additional services to compliment your business needs such as tax advice, recruitment as well as HR & Payroll Outsourcing.

By partnering with a one-stop-shop for all of your business growth needs, you avoid the hassle of having to deal with various suppliers. This eases communication and will also contribute to you being more efficient.


Ensure Compliance

With their practical and extensive local business knowledge, your partner’s sole responsibility is to keep your business compliant at all times with Australian regulations, giving you peace of mind.



All businesses who’ve expanded to a new market or started a new venture can attest to how important it is to contain costs while you establish your brand and grow your customer base. This also includes the costs that could come up from non-compliance.

Australian resident director services will ensure you focus on growing your business whilst keeping your back-office and compliance costs to a minimum.


Thinking About Taking Your Business to Australia?


Whilst expanding your business to Australia can seem daunting and complicated, it doesn’t have to be. Engaging a specialist to act as Director during the company setup process is typically the most efficient, safest, and ultimately the most cost effective way forward for most businesses looking to meet minimum requirements set out by the government.

Keen to find out more about how an expert 3rd party partner can help? Get in touch with our Head of Growth – ANZ today, Laura, for a more tailored solution.



About the Author:

Manon is Polyglot Group's Global Head of Marketing. Referred to a marketing "chameleon", Manon's superpower comes from her ability to jump from one project & specialty to another with ease. Not only is Manon deeply passionate about her work, she is also a diversity, empathy & equality advocate.