6th Australia New Caledonia Business Forum
Brisbane 18 June 2010
• Practical tips to set up your business in New
Caledonia
– with a local partner
– with your own employees
• Choice of a structure
– Non- incorporated
– Incorporated
• Protecting your assets overseas
• Managing the local team
• Managing shareholders relations
• Industrial/Intellectual property
– Key asset
– Register trademarks/ logo/ patents/ designs/ domain
names etc. over the territory
– Ascertain which entity is the owner of the IP
– Set up a licence contract with local entity
No compete clause
– Local joint venture partner:
In a shareholders’ agreement
In a management agreement
– Local staff:
In employment contracts
– Must be reasonable and limited as to area, duration
and type of activity
• Sale of goods or equipment
– Dispute resolution clause:
• Avoid cost of international litigation
• Internal process / Mediation / Conciliation
– Retention of title clause:
• Easier reclaim of unpaid goods or equipment
• Must be express
• Only applies to identifiable goods/equipment
•
•
•
•
Confidentiality clause
No compete clause
Reporting
Scope and limits of authority
– In employment contract
– In constitution of local company
• Assumption of broadest authority with third parties
• Joint managers
• If exceeds authority: remedies
• Key clauses
– In shareholders’ agreement, constitution or in
management agreement
– Clauses:
•
•
•
•
•
Duties, scope of authority
Reporting
Sale of shares, change of control
No compete
Confidentiality
Constitution
Shareholders’
agreement
Statutory regime
Contractual
Less flexible
Very flexible
Easy to enforce
More difficult to enforce
Damages / Injunction / Specific
performance
Damages
Not confidential
Confidential
Heavy process to amend
Easy to amend or to join
• Tax representative
• Representation desk
• Branch
• Company
• Temporary or permanent
• Direct implantation on local market
• Direct control by head office
• Direct profit/loss
• Unlimited liability
• Advantages
– Cheap to set up / run
– Local knowledge
– Temporary or
permanent
– Confidence with clients
and authorities
– IP remains with
Australian entity
• Disadvantages
– Direct commercial
and legal risk
– Management of
double taxation
impact on local
profits
– No local partner
other than as
employee
• Advantages
– More permanent
– More confidence with
local clients and
authorities
– Local partner possible
– liability limited to local
market
• Disadvantages
– More expensive to run
– Statutory regime to
comply with
– More complex
contractual set-up with
mother company
• No limitation on nationality of shareholders
• French particularities:
– Share capital:
• Minimum amount, obligation to pay up at incorporation
• Contributions: cash / assets / labour
– Cumulating directorship and employment contract
– “Must be allowed to trade”
– Company tax or shareholder taxation
SARL
SAS
SA
Full name
Société à
responsabilité limitée
Société par actions
simplifiée
Société anonyme
Equivalent in
Australia
Pty Ltd
Simplified Ltd
Ltd
Members
Min.1 and max.100
Individuals
Corporate entities
Min. 1
Individuals
Corporate entities
Min. 7
Individuals
Corporate entities
Liability of
members
Limited
Limited
Limited
Share capital
requirement
Min. $ 1
Min. $ 1
Min. $ 54,000
Contributions
Cash
Assets
Labour
Cash
Assets
Cash
Assets
For convenience, amounts are converted into Australian dollars
Management
SARL
SAS
SA
One or more managers
Director(s) incl. President
Choice of management
structure
Board of directors
Chairman of Board
General Director (executive)
Legal
requirements
Must be individuals
Must be allowed to
trade
Individuals
Corporate entities
Min. 3, max. 18 directors
Individuals (incl. Chairman
and General Director)
Corporate entities
No employment contract
Criteria in
constitution
Shareholder or not
Shareholder or not
Shareholder or not
Authority to
act for
company
Manager(s)
President
General directors (if
provided in constitution)
General Director
Deputy General Directors
(if any)
Limits to
authority
In constitution
In constitution
In constitution
By resolution of Board
SARL
SAS
Prohibition
Loan to managers
Loan to shareholders
(unless corporate entity)
Loan to management
Loan to shareholders
(unless corporate entity)
Loan to directors
(unless corporate entity)
Loan to shareholders
(unless corporate entity)
Interested
party
contracts
By shareholders’
resolution
By shareholders’
resolution
By shareholders’
resolution
Auditor
Thresholds (2 out of 3):
Assets ≥ $ 2,230,000
Net T/O ≥ $ 4,460,000
Staff ≥ 50
Thresholds (2 out of 3):
Assets ≥ $ 1,440,000
Net T/O ≥ $ 2,880,000
Staff ≥ 20
Compulsory
Annual filing
of accounts
and AGM
Compulsory
Compulsory
Compulsory
Taxation
Company tax
unless wholly-owned by
individual
Company tax
unless applicable limited
exemptions
Company tax
For convenience, amounts are converted into Australian dollars
SA
SARL
SAS
SA
Constitution
Flexible
Tailored
Mostly statutory
Cost to set up
and run
Fairly inexpensive
Fairly inexpensive
Expensive
Restricted
sale of shares
Yes if in constitution
Yes, if in constitution
No
Joint venture
Closely-held
Closely-held
Large number of
shareholders
Corporate
governance
Fairly protective
depending on
constitution
Depends on
constitution
Protective
SNC
SCA
Full name
Société en nom collectif
Société en commandite par action
Equivalent in
Australia
Incorporated partnership
Incorporated partnership limited by
shares
Members
Min. 2 partners
Individual
Corporate entities
Must be allowed to trade
Min. 1 limited shareholder
Min. 1 unlimited shareholder
Individual
Corporate entities
Liability of
members
Joint and unlimited
Limited shareholder: limited
Unlimited shareholder: joint and
unlimited
Share capital
requirement
≥$1
≥ $ 54,000
Contributions
Cash
Assets
Labour
Cash
Assets
Labour (for unlimited shareholders only)
For convenience, amounts are converted into Australian dollars
SNC
SCA
Management
One or more managers
One or more managers
Supervisory board
Legal
requirements
Individual
Corporate entity
If manager is a partner, must be
allowed to trade
Must be appointed in constitution
Individual
Corporate entity
If manager is a shareholder, must be
allowed to trade
Must not be a limited shareholder
Joint venture
Very closely-held
Silent investor: limited shareholder
Active local partner: unlimited
shareholder
Auditor
Thresholds (2 out of 3):
Assets ≥ $ 2,230,000
Net T/O ≥ $ 4,460,000
Staff ≥ 50
Compulsory
Tax
Shareholder direct taxation
Hybrid taxation
For convenience, amounts are converted into Australian dollars
SNC
SCA
Advantages
Unanimous consent for:
• sale of shares
• revocation of managing partner
Favourable taxation if activity
expected to make loss
Flexible constitution
Liability proportional to responsibilities
Hybrid taxation
Good corporate governance
depending on constitution
Good for a silent investor
Disadvantages
Unlimited liability of partners
Management deadlock
Difficult to leave partnership
Complex and expensive to manage
Hybrid taxation complex to administer
Unlimited liability for local partner
• Different legal system:
 Forget your assumptions
• Reporting:
 Ensure good communication
• Assets and goodwill:
 Protect your business
Julie Miehe
Véronique Morgan-Smith
Principal
Solicitor - NSW & QLD
Juriste – France
Special Counsel
Solicitor – NSW
Avocat – France
NAATI Translator
Practice areas
Commercial and Corporate
Mergers & Acquisitions
Corporate Governance
Resources and Energy
Tourism
Practice areas
Commercial and Corporate
Corporate Governance
Mergers & Acquisitions
Resources and Energy
IT
Brisbane
+61 (0) 423 298 007
julie.miehe@oceanie.com.au
Sydney
+61 (0) 423 191 723
veronique.morgansmith@oceanie.com.au