Executive Summary: Section 201A of the Corporations Act 2001 requires every Australian proprietary company to keep at least one director ordinarily resident in Australia, continuously. Relocating sole directors usually stop qualifying, triggering a 28-day window to notify ASIC and appoint a replacement or risk losing good standing. This company-law rule sits separate from ATO tax residency.
I’ve now had this exact conversation with enough Australian founders that I can predict where it goes before they finish the first sentence. Someone gets excited about a Dubai move, books flights, sorts out the visa, and then, almost as an afterthought, mentions that their Pty Ltd back home is still ticking along with them as the sole director. My next question is always the same. Who’s staying behind to be your resident director once you’re gone?
Most of the time, there’s a pause. Nobody had thought about it.
And I get why. When Kevin and I built GenZone, we’d just been through the maze of setting up in Dubai ourselves as Canadians, so a huge amount of our own energy went into understanding the UAE side of a relocation, visas, banking, trade licenses. The part that quietly trips up Australian founders specifically isn’t anything to do with Dubai at all. It’s a rule sitting back home in the Corporations Act that most people have never heard of until it’s suddenly their problem.
So this one is just about that rule. What it actually says, why it exists, what happens if you ignore it, and what your realistic options are if you’re keeping your Pty Ltd running while you build your life in the UAE.
The Short Version
Section 201A of the Corporations Act 2001 requires every Australian proprietary company to have at least one director who “ordinarily resides in Australia,” continuously, for as long as the company exists.
This has nothing to do with your company’s tax residency. It’s a separate rule, administered by a separate regulator (ASIC, not the ATO), for a separate reason: making sure someone locally accountable can be reached.
“Ordinarily resides” isn’t defined anywhere in the Act, and ASIC has never published a precise day count or bright line test for it. It’s assessed on the facts of your situation.
If your last Australian resident director genuinely leaves the country, you generally have 28 days to notify ASIC and appoint a replacement who qualifies, or you risk compliance action.
You’ve got a few realistic ways to stay compliant, and the right one depends on whether you’ve still got someone in Australia you trust, or whether you need to bring in a professional service.
What the Rule Actually Says
Section 201A of the Corporations Act 2001 is short and doesn’t leave much room for interpretation on its face. A proprietary company must have at least one director who ordinarily resides in Australia. A public company needs at least three directors, two of whom must ordinarily reside in Australia. That’s the whole requirement in plain terms, though as with most short legal rules, the difficulty lives entirely in the phrase “ordinarily resides.”
Here’s what trips people up. This rule sits in company law, enforced by ASIC. It’s a completely different question to whether your Pty Ltd is an Australian tax resident, which is governed by tax law and enforced by the ATO. An Australian incorporated company is a tax resident forever, by virtue of incorporation alone, whether or not it has a compliant resident director.
So fixing your director situation doesn’t change your company’s tax position, and getting your tax position sorted doesn’t get you out of the director requirement either. They’re two separate boxes that both need ticking, and I’ve seen founders solve one and assume the other is automatically handled. It isn’t.
Why This Rule Exists
It’s worth understanding the “why,” because it explains why ASIC takes it seriously rather than treating it as a technicality. The resident director requirement exists so there’s always someone inside Australia who can be served legal notices, contacted by regulators, and held personally accountable if the company doesn’t meet its obligations.
Corporate regulation generally assumes there’s a real person reachable inside the jurisdiction. If every director of an Australian company could be sitting somewhere the regulator has no practical way to reach or compel, the entire enforcement model breaks down. That’s the actual policy reason, not just red tape for its own sake.
What “Ordinarily Resides” Actually Means
This is the part that genuinely doesn’t have a clean answer, and I’d rather tell you that honestly than pretend there’s a simple test. ASIC has never issued specific guidance defining exactly how many days a year, or what pattern of living, qualifies as “ordinarily residing” in Australia.
There’s no number to hit. It’s assessed on the facts of each situation, similar in spirit to how residency questions get assessed elsewhere in Australian law, but this is its own standalone test administered for its own purpose.
In practice, this means the safest position is someone who genuinely lives in Australia as their home base, not someone who happens to hold Australian citizenship while living permanently in Dubai, and not someone who visits for a few weeks a year while the rest of their life is overseas.
If you’re the sole director and you’re relocating with the intention of living in the UAE long term, you almost certainly stop qualifying, regardless of how often you plan to fly back for a visit. This isn’t a box you can tick by keeping a spare bedroom at your parents’ place and calling it your Australian residence. ASIC looks at the substance of where you actually live, not a mailing address.
What Happens If You Get This Wrong
If your qualifying resident director genuinely leaves Australia and nobody replaces them, you’re generally expected to notify ASIC and appoint a new compliant director within 28 days. Miss that window, and the company moves into a compliance gap that ASIC can act on.
In practice this can mean the company falling out of good standing, difficulty processing other lodgements and changes, and in more serious or prolonged cases, exposure to further regulatory action against the company and, potentially, personally against whoever’s been acting as a director without meeting the requirement.
The other risk that’s easy to miss is a quieter one. If nobody in Australia is genuinely accountable for the company, and something goes wrong, a dispute with a client, an unpaid debt, an ATO audit, there’s no local person for anyone to reach, which tends to make every one of those situations worse and slower to resolve than it needed to be. The rule isn’t just about avoiding an ASIC notice. It’s about not leaving your own company without anyone able to actually stand in for it while you’re twelve hours away.
Your Realistic Options
1. Keep a genuine Australian resident as a co-director
If you’ve got a co-founder, a business partner, a trusted family member, or even a friend who’s happy to take on the role and understands what it involves, this is usually the simplest fix. They don’t need to run the business day to day.
They need to genuinely live in Australia and be willing to take on the legal responsibilities that come with being a director, which is a real commitment, not a favour to hand out lightly. Whoever you ask should understand they’re agreeing to actual duties under the Corporations Act, not just lending their name. Bear in mind any new director will also need a Director Identification Number before they’re appointed.
2. Engage a professional resident director or registered agent service
If there’s genuinely nobody suitable left in Australia, this is the standard fallback, and it’s a well established service category precisely because this situation comes up constantly for founders relocating internationally. These services exist specifically to satisfy section 201A for companies in your position.
The trade off is cost and the fact that you’re trusting someone outside your immediate circle with a legal role in your company, so it’s worth checking exactly what oversight and reporting comes with the arrangement before you sign up.
3. Restructure how the company operates, or wind it down
If the compliant resident director problem is really a symptom of the fact that the Pty Ltd doesn’t need to exist in its current form anymore, this might be the moment to have that bigger conversation rather than patching the director gap indefinitely.
We’ve written separately about the fuller decision between keeping your Pty Ltd running, winding it down, or restructuring the business into a new Dubai entity, and this director requirement is usually one input into that decision rather than the whole story.
Whichever path fits, sort it out before you leave, not after. A compliant resident director arrangement takes a phone call and some paperwork to set up in advance. Scrambling to fix it from Dubai after ASIC has already flagged the gap is a much worse position to be negotiating from.
What I’ve Seen Across Hundreds of These Moves
We’ve now helped over 1,400 companies get set up in Dubai from 50+ countries, and Australia is consistently one of our biggest client bases, alongside the UK, Canada, and continental Europe. Our Google reviews passed 400 a while back, and a good number of those are from Australian founders who went through exactly this kind of transition, sorting out their UAE side while figuring out what to do with the company they were leaving behind.
One of our Australian clients, Lucas Aoun, founder of Boost Your Biology and INB4 Supplements, shared his experience of relocating to Dubai. His story highlights how much easier the move becomes when the setup, visa, and relocation process are handled by the right team, allowing him to stay focused on his businesses.
That’s genuinely part of why Kevin and I built GenZone the way we did. We’d gone through Dubai’s business setup process ourselves and found it frustratingly unclear, so the whole model is built around not leaving founders to discover these gaps on their own partway through a move.
Where GenZone Fits Into This
To be upfront about where we can help and where we can’t: we’re not an ASIC agent and we don’t provide resident director services for Australian companies ourselves. That’s a job for your Australian accountant, corporate lawyer, or a specialist resident director provider back home, and I’d rather tell you that plainly than pretend otherwise.
What we do well is everything on the Dubai side of your move, and making sure it’s sequenced properly around whatever you’re sorting out in Australia. That means genuine cross-border coordination rather than working in isolation from your home country advisor, transparent pricing on your UAE company, visa, and banking, including whether a free zone setup is the right fit, with no surprise costs once you’ve committed, an end-to-end setup handled by one team instead of passed between vendors, and fast, responsive support from actual people while you’re juggling both sides of a relocation at once.
Once your Dubai entity is formed, the same team stays with you for ongoing corporate tax filings, VAT, and renewals, backed by human advisors who’ve walked other founders through this exact kind of transition, not a support ticket queue.
If you’re also weighing up a US LLC alongside your Dubai company, which is common among consultants and agency owners who want US banking and Stripe access alongside their UAE residency, our LaunchPad portal keeps both structures visible in one place rather than scattered across separate logins and email threads.
Frequently Asked Questions
What is the ASIC non-resident director requirement?
Section 201A of the Corporations Act 2001 requires every Australian proprietary company to have at least one director who ordinarily resides in Australia at all times. It’s a company law rule enforced by ASIC, separate from your company’s tax residency, which is governed by the ATO.
Can an Australian company have a director living overseas?
Yes. The rule requires at least one qualifying resident director, not that every director lives in Australia. You can remain a director yourself while living in Dubai, as long as someone else on the board genuinely ordinarily resides in Australia.
What does “ordinarily resides in Australia” actually mean?
It isn’t precisely defined in the Corporations Act, and ASIC hasn’t published a specific day count or test. It’s assessed on the facts of your situation, generally meaning Australia is genuinely your home base, not somewhere you visit occasionally while living permanently elsewhere.
What happens if my company doesn’t have a compliant resident director?
If your qualifying director leaves and isn’t replaced, you generally have 28 days to notify ASIC and appoint someone who meets the requirement. Beyond that window, the company risks falling out of compliance, which can affect its standing with ASIC and, in more serious cases, expose those acting as directors to further regulatory scrutiny.
Does having a resident director fix my company’s tax residency?
No. These are two separate issues. An Australian incorporated company remains an Australian tax resident permanently, regardless of who its directors are or where they live. The resident director requirement is a company law compliance matter, not a tax residency fix.
Can a family member or friend act as my resident director?
Yes, as long as they genuinely ordinarily reside in Australia and understand they’re taking on real legal duties and responsibilities as a director, not just lending their name. This is a common and reasonable solution if you’ve got someone suitable, but it shouldn’t be treated as a formality.
What if nobody in my life still lives in Australia?
This is when a professional resident director or registered agent service usually makes sense. These services exist specifically to help companies meet section 201A, and they’re a standard option for founders relocating internationally without a suitable person left in the country.
Related Reading from GenZone
If you’re planning the wider move, these cover the other pieces founders usually deal with alongside the director question:
- Selling Australian property from Dubai and the FRCGW withholding rules
- Cost of living in Dubai versus Sydney and Melbourne
- What to do with your Pty Ltd when you move to Dubai
This article is general information only and does not constitute personal legal, corporate, or tax advice. Whether your specific arrangements satisfy section 201A, and how this interacts with your company’s other obligations, depends on your individual circumstances. Speak with a qualified Australian corporate lawyer or registered agent about your Pty Ltd’s director requirements before you relocate.
Building your Dubai side of the move? Book a free strategy call with GenZone and we’ll walk you through your UAE company, visa, and banking setup, timed properly around whatever you’re sorting out with your Pty Ltd back home.
