Starting a new business in any country implies the need and the duty to comply with the different requirements and regulations that the country has. In some places, the authorities will be more flexible than in others, but in general, the rules must be complied with.

In Australia, if you want to start a business in the financial field, you will have to apply for a license with the Australian Securities & Investment Commission (ASIC). This process may sound a bit complicated, but always remember that our group of experts in Australia will make this process much more enjoyable and simple for you, as they will accompany you during every stage.

“Australian Financial Services License” (AFSL) is the name of the license to which you should apply, no matter if your business belongs to different fields of the financial field. Again, for any support you may need, please contact us to initiate the procedures.

When do you need to apply for an AFS License in Australia?

As an investor or an entrepreneur, you will need this license if your business offers one or more of these services:

-Provide Financial advice

-Trading a Financial Product

-Creating a market for a financial product

-Managing a registered scheme

-Custody services

-Trustee services

-Provide a funding service

You need to know that you will need to have your AFS License from the very first day you start offering your company’s services. This means that you will have to wait for the ASIC’s response to your application.

Besides this, license holders providing personal advice to retail clients are subject to a duty to act in a client’s best interest and fee disclosure requirements. License holders providing personal or general advice to retail clients are subject to a ban on conflicted remuneration.

What are the Eligibility Requirements for this License?

According to the Australian government, you must fulfill these requirements:

-Meet approved qualification and competency standards and/or have practical experience

-Have sufficient financial resources to carry on the proposed business

-Be able to meet certain obligations as a licensee such as training, compliance, insurance, and dispute resolution. 

There are other requirements and documents you must provide when you make your application, but before any of that, you must be sure that you meet these requirements. This is the first step.

How much Does the Process Cost and How Long Does it Take?

The application process for your AFS License has a cost that varies depending on how it will be used, or in other words, what your business is engaged in. This license costs up to AUD 11,000, which applies to retail clients and high complexity products.

Each type of business, given its occupancy, size and clientele will have a certain cost. But don't worry, our experts are ready to let you know which one is the most suitable for you, and to accompany you during the application.

In general, the time frame to get an answer for your application goes up to 4 months while the Australian authorities validate the information you provided and verify that you can fulfill the commitments you make once your license is granted.

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What Documentation is Required to Obtain a Financial License in Australia?

First, you will need to register a company in Australia. In our article "Companies & Structures" we detail what you need for this step (click here). Your company must have at least 2 directors (at least one of them must reside in Australia) who will act as responsible managers and have to count on the necessary experience and skills in the field of finance, a secretary, and a local office address. 

After you fulfilled the requirements mentioned above, you must prepare some documents that will accompany your application. These documents are:

-ASIC form FS01. 

This document requires you to provide information about yourself as an applicant, your business, the financial services and products that you plan to provide, and your ability to comply with the AFS license requirements employing responsible directors, resources, systems, and processes.

-Description of the business. 

This should be a detailed description of your business, including the sources of income of your business, prospective types of customers, organizational methods, and schemes.

-Documentary evidence or confirmation for each responsible manager (director).

Australia is committed to the proper functioning of the different institutions and companies operating in its territory, so in addition to the information and description of your company, you will also be asked to provide information about the Australian resident directors who will be the company's representatives in the country.

These documents must be summited to the ASIC alongside the information about your company. The documents required are:

-Information containing the personal data of the directors.

-Confirmation of qualifications (studies, curriculum, experience, etc.).

-Copies of certificates of no criminal record (it has to be not older than 12 months).

-Copies of 2 business certificates confirming the experience of the director in the financial sphere (not older than 12 months).

-Table of organizational competence. This is a document that confirms the relevant knowledge, experience, and skills of your appointed responsible managers who will be directly responsible for significant daily decisions regarding the provision of financial services;

-Financial statements and sources of funds. Various financial statements need to be submitted, depending on the financial requirements that apply to financial services and products.

Typically, most applicants are required to provide recent income declarations and account statements.

What Happens if a Foreign Financial Services Company Wants to Obtain a License?

This is a very interesting topic, since Australia, as part of its commitment to generate a good investment environment for foreign companies, has recently issued several licensing reliefs for foreign financial service providers (FFSPs) as well as fast-tracking the licensing process for FFSPs. 

This decision originates as a response to the new regulations put in place by ASIC, where FFSPs would have to apply for a new type of license from April 2022, due to concerns that the measures initially taken would not provide the right balance. If you operate one of these companies, these are the relief options you’ll have:

Option 1 

Option 1A 

This option involves restoring the sufficient equivalence relief and the limited connection relief as it applied before their repeal by ASIC. FFSPs regulated in jurisdictions assessed as ‘sufficiently equivalent’ could therefore continue to provide certain financial services to wholesale clients,

Option 1B

This option would restore the sufficient equivalence relief, but not the limited connection relief. The limited connection relief would be replaced with the more targeted funds management financial services (FMFS) relief announced by ASIC. 

Option 2 – sufficient equivalence relief with more conditions

This option would provide relief for FFSPs providing specified financial services to wholesale clients. The breadth of financial services, and financial products to which they may relate, would closely track the sufficient equivalence relief. 

To qualify for the relief, an FFSP would be required to notify ASIC and be regulated in a jurisdiction assessed as ‘sufficiently equivalent to Australian regulation. 

Option 3 

This option is the same as option 2, however, all financial services provided to wholesale clients would be within the scope of the relief.

What Can We Do for You?

Our team of experts is the most qualified to assist you during the whole process of obtaining your financial license in Australia. This is not a simple process, but you will have all the assistance and support you may need.

With our services, you will get the license you need in a much simpler way and with much fewer worries, so the services we have to offer should interest you a lot.

Among the mentioned services we have for you, we can mention:

-We will be appointed as the ASIC registered agent in Australia for a period of 24 months.

-We will receive and respond to all correspondence on behalf of the company.

-Determining and advising on the type of AFSL required.

-Finalizing the appropriate authorizations for the required financial services as proposed by the Company.

-Preparation of the Business Plan.

-Preparation of and lodging of all documentation, policies, supporting information, and evidence with ASIC.

-Liaising with ASIC until a decision is finalized as to whether or not to grant the AFSL to the company.

And if that were not enough, our work does not end when you obtain your financial license, but we continue to accompany you in everything you need to manage it (advice on the management of your business, contracts, and agreements with directors or responsible managers, additional requirements requested by ASIC and much more).

Get in contact with us!

Australia is a country full of great opportunities for investment and business. It has been one of the countries which have had a better response to the current situation with Covid-19, and therefore, it has been one of the first countries to reactivate its economy, which, among other things, speaks of its enormous organizational capacity and commitment to growth and development.

Getting your Australian Financial Service License approved will mean the opening of many more opportunities for you, given the wide variety of business and financial services you will be able to offer, which are highly demanded in the sixth largest country in the world.

Don't waste any more time and contact us today, so you will have the best team at your disposal to provide you with all the support you may need for this new project, we are waiting for you!

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