6 Company Law Elements for Foreign Investors in Australia

Ensuring Corporate Documents' Enforceability - What to Know


Foreign investors in Australia looking to invest in the country needs to undergo a meticulous process. The Australian corporate law offers many benefits for foreign investors, but there are elements of the law you need to know before you get started. What are they?

1. Directors and Officers

Directors, like managers, owe the company itself and the shareholders under the general law, the Corporation Act, and other legislation. The management and control of the company are vested in the board of directors. 

Keep in mind: if a person is not validly appointed as director, they may still be considered one if they act as they were a director or if the board acts in accordance with their instructions. 

2. Reporting Requirements and Records

The extent of the reporting obligations will be based on the size and activities of the company and whether it’s a reporting entity. Businesses in the country have various obligations to comply with in terms of reporting and records. 

For one, companies must keep records and maintain registers in respect of their activities. These accounts must be maintained with generally accepted accounting principles that are consistently applied in the country. 

It is the company’s duty as well to prepare annual financial statements and reports and distribute the copies to their shareholders. These copies must be lodged with ASIC and if applicable, the Australian Stock Exchange (ASX). There are also some cases when you need to prepare consolidated financial statements covering the financial aspects of a group of companies. 

3. ASX

You can raise funds from the public by listing on ASX, but it can be an expensive process. With that, businesses need to meet various financial criteria set out in the ASX Listing Rules and satisfy comprehensive ongoing reporting requirements and further requirements under the Corporations Act. Moreover, there should be a detailed prospectus issued to describe the status and prospects of the company. 

4. Managed Investment Schemes

Regulated by the Corporations ACT, the managed investment schemes include any arrangements where an operator manages an investment made by one or more passive investors besides the issue of shares or other securities in a company. 

To register for this, the operator or manager must be an Australian public company with an Australian financial services license. Setting this up also involves a significant amount. However, there are exemptions from the rules for small-scale schemes or those that only have sophisticated investors. 

5. Acquisition of Businesses

There are two ways to acquire a business—assets or shares. The rules are more complex for public companies. Moreover, taxation and stamp duty consequences should be considered as well. 

6. Crowd-Sourced Funding

The country has introduced legislation that now allows eligible start-up and small businesses to raise capital through securities to investors without a prospectus. 


Being a foreign investor in Australia is a meticulous process, but it’s worth it. Knowing the elements of company law in the country will help you set up your company the right way and help with the overall operations. You can always seek the help of professionals to help you out. 
GLG Legal is a reputable law firm in Brisbane, QLD. We provide our clients with real-world solutions to meet their commercial and property needs. Schedule a consultation today.

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