Open a Holding Company in Australia: Registration Support

A holding company in Australia represents a type of entity that does not develop commercial activities, but rather holds interest in other companies, including owning and purchasing shares in such companies. Our consultants, who are specialized in company registration in Australia, can help you incorporate a local holding company.

How is a holding regulated under the Australian law?

The holding company is defined by the Corporations Act, Section 46, as a legal entity that controls the board of directors of its subsidiaries, owns the majority of votes in general meetings or more than 50% of the shares of the companies it holds.

Quick Facts
Legal entities used	Proprietary limited company (the equivalent of a limited liability company).
Incorporation method	A holding company in Australia is incorporated in accordance with the rules stipulated by the Corporations Act 2001.
Incorporation time	The stardard registration of the legal entity can take around 2 business days. However, a company can become fully functionable in several weeks (2-3 weeks, maximum 4).
Types of assets owned by the holding	A holding company in Australia can own assets such as: intellectual property, trade secrets, real estate (land and buildings), stocks, shares of other companies, etc.
Requirement for local bank account (Yes/No)	Yes.
Residency requirements for the founder(s)	There aren’t any residency requirements for the shareholders of a holding company in Australia.
Advantages	The holding is used for asset protection and risk minimization. It is also a structure through which investors can reduce their overall tax burden. The holding can provide managerial advantages, as the entire structure will act as a group whose central administration is represented by the holding.
Precautions	Most of the precautions when setting up this structure are related to the incorporation costs and the operational costs, considering that the company has many subsidiaries operating under its umbrella.
Shareholding structure	The holding must own more than 50% of the shares (or control the board or the majority of votes) of another company.
Minimum capital	There aren’t any capital requirements for a proprietary limited company.
Taxation	Australian tax authorities apply a tax consolidated regime for legal entities incorporated in Australia that are 100% owned by a single company, incorporated in Australia or a foreign one. The advantage is that all these companies file a single tax report and calculate their income taxes as a group entity.
Control	The holding exerts control over the manangement of companies it owns. It does not usually interfere in their commercial activities, although Australian law does not prohibit a holding from trading.
Registered agent requirements	The company must have a registered office in Australia (there is no registered agent requirement).
Accounting and reporting	The holding must report to the Australian Taxation Office (ATO) on matters concerning employment, the distributions from companies it owns, credits, income, losses, dividend income, interest income, etc.
Number of double taxation treaties	46

Can my holding fully own its subsidiaries?

Yes. Holding companies can own 100% of the shares of its subsidiaries.

How can I incorporate a holding?

The holding company is registered following the basic steps for company incorporation in Australia.

What is the process for opening a holding company in Australia?

In the list below, our team of specialists presents some of the obligations investors have in connection with the registration of a holding:

the registration process starts by filing different documents with ASIC;
the basic step is to register a trading name for the company;
then, investors have to select the specific Australian region where they will set up a company in Australia;
another component of the incorporation is to assign for the holding company in Australia a registered business address, which is a compulsory step for all businesses that operate here;
it is also necessary to open a corporate bank account, registered at a commercial bank in Australia.

What rules should I take into consideration when opening a holding in Australia?

With regards to the incorporation of the holding company in Australia, investors should know the following:

basic rules regarding its functioning derive from the Corporations Act 2001 (Sections 46 and 50);
the holding can be incorporated by only 1 shareholder (who can have any nationality);
the Corporations Act 2001 Section 46 stipulates that a legal entity can be considered a holding if it owns more than 50% of the shares of another company;
the holding may appoint 1 secretary (optional for a proprietary company), who is in charge with reporting any changes regarding the initial registration information;
for instance, the secretary has the obligation to inform ASIC on any changes in a period of maximum 28 days since the management issued a decision to change any element of the holding.

What institution is responsible for the registration?

A holding is registered with the same institution that oversees the incorporation of all Australian legal entities, meaning Australian Securities & Investment Commission (ASIC). Other institutions, such as the tax and employment authorities, will participate in the registration once the standard procedures for company formation in Australia have been completed.

What company type is recommended for the holding?

The holding is incorporated as one of the legal entities recognized by the commercial law in Australia. In general, the holding is registered as a proprietary limited company (which is the Australian equivalent of a limited liability company).

What are the advantages of a holding company in Australia?

Generally speaking, there are 7 core benefits investors can obtain, among which:

it represents a way to protect assets;
it reduces the corporate risk;
it can be a vehicle of reducing the overall tax burden;
the 4th advantage is that the holding uses a centralized control system, which is suitable for large businesses belonging to the same structure;
the 5th characteristic of the holding company in Australia is that the holding represents the centralized holder of all the assets of the corporate group;
the 6th characteristic is that the holding is a vehicle for growth, accepting a wide range of investment strategies;
the company allows succession planning.

Is the holding legally responsible for litigation arising in one of its operating companies?

No. Provided that we refer to a litigation case arising between a client/business partner of the operating company, the litigation case must be resolved between these 2 entities. The holding does not have responsibilities in this scenario. More about litigation in Australia is available here.

Can the holding become liable for the debts of its companies?

In certain situations, it is possible for the holding to bear liability for the debts of its companies. The Corporations Act, Section 588V regulates this matter, which includes these criteria that must all be met at the same time:

the holding must own the other company at the moment when the debt arises;
the subsidiary must be insolvent at the moment when the debt appears;
if the subsidiary is not insolvent, there must be plausible reasons that the company will soon become insolvent;
the holding or the directors of the holding are aware that the subsidiary may enter insolvency.

If you plan to open a holding and you need advice on other legal aspects and tax matters, we invite you to contact our team of consultants in company formation in Australia, who can offer answers to all your inquiries.