Under the Corporations Act 2001, every Australian-registered company must appoint at least one director who ordinarily resides in Australia. This requirement applies to foreign-owned companies operating through an Australian subsidiary and is enforced by the Australian Securities and Investments Commission (ASIC). The resident director is legally responsible for ensuring the company meets its statutory and regulatory obligations in Australia.
Do Foreign Companies Need an Australian Resident Director?
Yes. If a foreign entity establishes an Australian proprietary or public company, it must appoint at least one Australian resident director. This rule ensures Australian regulators can enforce local corporate laws and hold a locally resident individual accountable for governance and compliance.
Foreign companies cannot operate an Australian company with directors based solely overseas, regardless of their global presence or reputation. The resident director requirement exists to prevent offshore control without local accountability.
Important distinction:
A registered foreign company branch does not require a resident director but must appoint an ASIC local agent. An Australian subsidiary, however, must appoint a resident director.
Australian Resident Director Requirements (Eligibility Criteria)
To qualify as an Australian resident director, an individual must meet the following non-negotiable requirements:
Ordinarily Resides in Australia
The director must live in Australia on an ongoing basis. This means:
- Regular physical presence in Australia
- Australia is their usual place of residence
- Not a temporary or fly-in arrangement
Australian citizens, permanent residents, and certain long-term visa holders may qualify, provided genuine residency is established.
Minimum Age
The director must be at least 18 years old.
Director Identification Number (DIN)
All directors must obtain a Director Identification Number (DIN) before appointment. This ASIC-mandated identifier helps prevent illegal phoenix activity and ensures director traceability.
No Disqualification
Individuals disqualified due to fraud, serious dishonesty, or breaches of director duties cannot serve as resident directors.
What Does “Ordinarily Resides in Australia” Mean?
“Ordinarily resides” is one of the most misunderstood ASIC requirements.
It does not mean:
- Holding Australian citizenship alone
- Owning property in Australia
- Visiting frequently
It does mean:
- Australia is the person’s primary place of residence
- They are physically present in Australia as part of normal life
- They are available to regulators and authorities when required
ASIC assesses residency based on facts, not titles.
Duties and Responsibilities of an Australian Resident Director
A resident director’s role carries real legal responsibility and personal liability.
Key obligations include:
Acting in the Company’s Best Interests
Directors must act honestly, in good faith, and for the benefit of the company—not related parties or overseas parent entities.
Exercising Care and Diligence
Directors must stay informed about the company’s activities, finances, and compliance status. Claiming ignorance is not a defence.
Preventing Insolvent Trading
A resident director must ensure the company does not continue trading while insolvent. Breaches can result in personal liability.
Ensuring Regulatory Compliance
This includes compliance with:
- ASIC reporting obligations
- Tax and ATO requirements
- Employment and workplace laws
- Corporate record-keeping standards
Acting as the Local Governance Representative
Resident directors commonly sign statutory documents, open bank accounts, liaise with ASIC and the ATO, and ensure governance processes function properly in Australia.
Resident Director Liability for Foreign-Owned Companies
Australian resident directors can be held personally liable for:
- Breaches of director duties
- Insolvent trading
- Failure to maintain compliance
- Misleading or false reporting
For foreign-owned companies, this makes director selection critical. Appointing an unqualified or unwilling individual exposes both the director and the company to serious risk.
Professional Resident Director Services vs Individual Appointment
Foreign companies typically choose between appointing an individual or engaging professional resident director services.
| Feature | Individual Director | Professional Resident Director Services |
| Compliance Expertise | Often limited | Specialist ASIC & Corporations Act knowledge |
| Continuity | Risk if director resigns or relocates | Guaranteed ongoing compliance |
| Personal Liability Management | High risk | Structured risk management |
| Speed to Market | Slower | Faster establishment |
| Suitability | Trusted long-term internal personnel | Foreign companies needing compliance assurance |
Professional services are commonly used by US and UK companies expanding into Australia to reduce risk and maintain control.
Setting Up Your Resident Director for Success
Once appointed, resident directors must be properly onboarded. They should have:
- Full access to company records
- Clear authority and reporting lines
- Regular updates on financial and operational matters
A well-informed director is essential to meeting legal obligations.
Why Professional Australian Resident Director Services Matter
⚠️ Failing to appoint or maintain a compliant resident director can result in penalties, regulatory action, and loss of good standing with ASIC. For foreign companies, relying on professional Australian resident director services provides continuity, reduces personal liability, and ensures ongoing compliance with Australian corporate law.
Final Note
Appointing an Australian resident director is not a formality—it is a core compliance requirement that directly impacts your ability to operate in Australia. Understanding the rules, selecting the right solution, and maintaining continuous compliance are essential for foreign companies expanding into the Australian market.
FAQs – Australian Resident Director Requirements
Q: Who is eligible to be an Australian resident director?
An individual aged 18+, not disqualified, who ordinarily resides in Australia and holds a valid Director Identification Number.
Q: Does a registered foreign company need a resident director?
Only Australian-registered companies require resident directors. Foreign company branches instead appoint an ASIC local agent.
Q: Can a non-resident be a director of an Australian company?
Yes, but at least one director must ordinarily reside in Australia.
Q: What is the difference between a local agent and a resident director?
A local agent applies to registered foreign companies; a resident director applies to Australian companies.
Q: Is a resident director personally liable?
Yes. Resident directors carry personal legal responsibility for compliance and governance failures.
