Obtaining a financial license in Australia is mandatory for those who want to carry out a business activity in the financial industry. However, it must be noted that although the license is the standard requirement, based on the specific operations a company will engage in, license exemptions can be offered.
If you need to obtain a financial license in Australia, our Australian law firm can offer its tailored services, through which businessmen can receive full legal representation during the licensing formalities. Our team is ready to provide answers to any inquiries concerning the registration of a business in the financial sector.
Table of Contents
What authority issues financial licenses in Australia?
Financial licenses in Australia are issued by the country’s main financial regulator, the Australian Securities & Investments Commission (ASIC). This institution can grant the Australian Financial Services (AFS) license to those who need to acquire it. In the list below, our lawyers in Australia present some of the activities that must hold a valid AFS license:
- developing crowd-funding services;
- offering trustee services;
- providing financial products advice;
- offering custodial services;
- offering depositary services;
- managing the activities of a collective investment scheme, etc.
For investors who want to operate in the banking sector, different formalities must be completed with the Australian Prudential Regulation Authority (APRA).
Applying for an AFS license in Australia
First of all, eligible applicants must have a company registered in Australia, which can take the form of a limited liability company. This means that it can be incorporated by only 1 shareholder and it can have at least 1 director, as per the rules of Companies Act.
However, for financial entities, it is recommended (and preferred by ASIC) to appoint at least 2 directors, who must meet specific criteria outside the standard ones imposed when starting a business, rules that can be presented by our Australian lawyers.
The directors, also referred to as responsible managers when appointed as the representatives of a financial company, are required to abide by strict criteria in terms of their studies, activity, skills. For instance, they need to have a work experience of 3 or 5 years in a company that was AFS licensed in the same sub-sector in which the investor wants to obtain his or her financial license.
There are many other basic requirements imposed to the persons who will work as responsible managers, and our law firm in Australia can provide further details.
Requirements for obtaining a financial license in Australia
Regardless of the company type incorporated, investors interested in obtaining a financial license in Australia must abide by the following:
- foreign financial services providers must respect the rules of ASIC Corporations (Foreign Financial Services Providers – Foreign AFS Licenses) Instrument 2020/198;
- license applicants must complete Form FS01 – Application for AFS License;
- it is also mandatory to pay registration fees as per the rules of Corporations (Fees) Regulations 2001;
- companies that apply online for the issuance of an AFS license must pay a processing fee of $2,233 to $7,537 depending on the types of activities the company develops (there is also the possibility to register on paper);
- a fee exemption is granted when the investors want to change the details of the company (by completing Form FS20).
Please know that investors can also opt to register a business as a non-banking financial company, in which case they do not need to obtain a financial license. Our attorneys in Australia can present the legal requirements imposed to non-banking financial companies. We invite to you to contact our lawyers in Sydney for legal assistance when setting up a financial business.