Open a Subsidiary vs Branch in Australia

The decision of opening a subsidiary or a branch office in Australia is influenced by numerous factors. Each company structure has its own advantages and disadvantages, which will be presented in this article by our lawyers in Australia. Our team can also provide legal representation in incorporating any of these 2 entities.

What are the differences between a branch and a subsidiary in Australia in 2026?

First, you should know that the main difference between branch offices and subsidiaries is given by their legal personality. The branch does not represent a separate legal entity – it is seen more as a permanent establishment of the parent company abroad, but which pays taxes in Australia, while the subsidiary is a separate legal entity, generally incorporated as a private limited company.

What is the liability of the parent company?

There are differences in terms of the foreign parent liability towards the company unit operating in Australia. In the case of the branch office, the parent company is fully responsible for any debts, while in the case of a subsidiary, the liability is limited to the shares owned by the parent company in the subsidiary’s shareholding structure. 

Are there any director requirements for the subsidiary?

In order to be able to set up a subsidiary in Australia, the investors will need to appoint as a director of the company an Australian resident and have a business address for the company. Its incorporation will follow the standard procedure for opening a company in Australia. 

What are the management rules applicable to the branch?

The branch office is managed by the parent company abroad. Please mind that in order to set up a branch in Australia it is also required to appoint a local agent.

What institution is responsible for the registration of the branch and subsidiary?

Both the branch and the subsidiary are registered with the same authority, which is responsible for the incorporation of all business forms recognized under the Australian law, namely the Australian Securities & Investments Commission (ASIC).

Do I need to have a local bank account?

Yes. The bank account is necessary for both the branch and the subsidiary. Our team of lawyers in Australia can provide legal representation during this procedure as well. More about Australian bank account can be observed here.

Are there any licensing obligations?

Licensing obligations can arise from the field of activity the company will engage in, not the company type under which the business operates. For example, companies with activities in the banking/financial sectors, telecommunications, healthcare, etc., must obtain various types of business permits and licenses. Other industries can be subjected to specific requirements, of course.

What are the employment rules?

Both entities have the right to employ workers in accordance with their needs. For this, they need to abide by the employment rules and regulations available in Australia. It is also possible to hire foreign workforce, following the immigration formalities applicable here.

What are the reporting obligations?

Even if there are certain differences between the 2 structures, it must be noted that both of them are required to file annual financial statements – the procedure will be completed with ASIC, and our lawyers in Australia can provide in-depth information on the formalities applicable in this case and on any other accounting obligations the branch and subsidiary have.

What are the tax residency rules for the branch and subsidiary?

Another important difference is that the subsidiary is an Australian tax resident, which is issued with an Australian Company Number, while the branch has an Australian Registered Body Number, but it is incorporated as a non-Australian entity; our team of lawyers in Australia can offer additional information. 

What is the tax system applied to the branch and the subsidiary?

It must be noted that the Australian subsidiary is taxed on its worldwide income and it is treated as an Australian tax resident. On the opposite side, the branch is liable to taxation in this country only for the income obtained from its activities carried out in Australia. More information about taxation rules in this country is available here.

What are the main taxes charged to Australian companies in 2026?

In this section, we will present a part of the taxes that local companies are required to pay, regardless if they operate as a branch office or a subsidiary. For more details on the withholding taxes applicable to local businesses, you can send your inquiries to our Australian law firm: 

• the standard corporate tax charged in Australia is imposed at a rate of 30%;
• companies that fall into the category of small and medium-sized companies were charged with a lower corporate tax, of 26% for the financial year of 2020-2021, which was reduced to 25% for the financial year of 2021-2022, and maintained at 25% since then;
• companies are also required to pay payroll taxes – for instance, the Queensland Government applies a tax of 4,75% for employers that pay maximum $6,5 million in Australian taxable wages (4,95% above that), a tax rate that has been maintained in 2026 as well;
• Australia also applies the value added tax, which is known here as the Goods and Services Tax (GST), charged at the standard rate of 10%;
• please mind that if you are involved in the wine industry, you will be required to pay the wine equalization tax, charged at a rate of 29% (the tax rate is maintained in 2026), in addition to the 10% GST rate. 

Please address to our Australian lawyers if you need more details on how to register a branch office or a subsidiary in this country.