The Australian medical device industry is experiencing significant transformation driven by innovation, regulatory updates, and global market demands. This dynamic sector continues to grow, positioning Australia as a key player in the global medtech landscape.
Setting up a subsidiary in Australia is a key strategic move for many global businesses. Whether you’re expanding into the Asia-Pacific market or strengthening your local presence, understanding the responsibilities of company directors under Australian law is essential to operating successfully.
Who Can Be a Director in Australia?
A proprietary limited company must have at least one director who ordinarily resides in Australia. Foreign shareholders can own 100% of the company, but local oversight is mandatory through a resident director.
Federal Director Responsibilities (Corporations Act 2001)
Director duties are primarily set out under the Corporations Act 2001 (Cth), regulated by the Australian Securities and Investments Commission (ASIC).
Key Legal Duties:
- Duty of Care and Diligence (Section 180)
Act with reasonable care in decision-making. - Act in Good Faith and Proper Purpose (Section 181)
Put the company’s interests first—even if the parent company has a stake. - No Misuse of Position or Information (Sections 182–183)
Avoid using your role or inside knowledge for personal gain. - Prevent Insolvent Trading (Section 588G)
Don’t let the company incur debts it can’t pay. - Financial Oversight
Ensure accurate records, reporting, and statutory compliance.
Extra Considerations for Foreign-Owned Subsidiaries
For Australian subsidiaries controlled by a foreign entity, directors must also ensure:
- Ultimate Holding Company Disclosure – Must be lodged with ASIC.
- Financial Reporting – Some subsidiaries must file annual reports, even if “small,” unless exempt.
- Resident Director – A locally-based director is non-negotiable.
State Laws
Depending on where your subsidiary operates, directors also need to manage:
- Work Health and Safety (WHS) obligations
Personal liability can apply for non-compliance. - Payroll Tax, Stamp Duty, and Land Tax
These vary by state and are administered by local revenue offices. - Environmental Regulations
Especially relevant for companies with warehousing, manufacturing, or construction activities.
Best Practices for Directors
- Maintain independence in decision-making
- Keep detailed records of financial information and of board decisions
- Ensure clear governance between parent and subsidiary
- Engage local legal and tax advisors
Directors of Australian subsidiaries play a critical role—not just as representatives, but as accountable officers under Australian law. With the right structure and support, your business can thrive while meeting all its regulatory obligations.
Need help navigating director appointments or governance structures in Australia? Contact Abdera
