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What does ordinarily resides in Australia mean for Australian company registration?
Updated 3 January 2021
When you set up an Australian company, at least one of your company directors needs to reside in Australia.
This is a legal requirement under the Corporations Act 2001 (Cth).
So here's what you need to know about the rule.
The Corporations Act
You’ll need to have at least 1 director that must ordinarily reside in Australia.
Now, you can have an overseas director or multiple directors as well. But, you need to have at least one director that ordinarily resides in Australia.
Ordinarily resides meaning
The Corporations Act does not define ordinarily resides unfortunately.
And, without a definition in the Corporations Act, many look to the residency test set by the Australian Tax Office (ATO).
First, to understand how tax will apply, and also to get an idea of what resides means generally.
Here's the ATO's definition of resides in Australia and what the ATO takes into account.
These are the factors that the ATO takes into account:
- your Australian ties - family, work, residence
- your intentions shown through your actions e.g. 12 month lease, Australian bank accounts
- maintenance and location of your assets
- social and living arrangements
- you can be a resident in more than one country.
And here's another good article about setting up a company as an overseas entrepreneur.
If you are planning on being overseas for some time and you are currently a sole director, you can consider adding on another director that does in fact reside in Australia.
If you don't have a suitable director that can join, another option is resident director services. This means that you pay a fee for someone that is eligible to be a director to hold this role.
Do you have questions or comments? Leave them below.
I wish you every success in all your ventures!