Why Australia?

Eligible companies with aggregated turnover under AUD $20 million can access a refundable tax offset of up to 48.5% of eligible R&D expenditure, delivered as a cash refund - making it particularly valuable for early-stage biotech and pharma sponsors. The refundable R&D tax offset is set at the corporate tax rate (25–30%) + an 18.5% premium.

Larger companies - or subsidiaries whose aggregated turnover exceeds the threshold - receive a non-refundable offset calculated against R&D intensity, which can be used against current or future tax liabilities.

Only an incorporated Australian entity (or a foreign company with an Australian permanent establishment) can claim the incentive - in practice, this means establishing a local subsidiary.

Updated Australian Taxation Office (ATO) guidance (July 2026) applies a more prescriptive test where an Australian subsidiary conducts R&D for the benefit of its overseas parent, looking at effective ownership of results, control over the R&D activities, and which party bears the financial risk. Get this wrong, and the offset can be denied. Older approaches - an Australian entity that exists on paper only, with a resident director but no genuine local presence, qualified staff, or independent decision-making - are explicitly flagged by the ATO as high-risk and no longer stand up to scrutiny.  Structuring arrangements correctly from day one is essential.

Beyond the tax incentive, sponsors are drawn to Australia for:

• Fast trial start-up times — a streamlined ethics and site-governance framework, and the TGA's Clinical Trial Notification (CTN) scheme, mean trials can often begin faster than in the US or EU.
• High-quality, internationally accepted data — Australian trials are conducted to ICH-GCP standards, and data is routinely accepted by the FDA, EMA, and other major regulators in support of global submissions.
• Experienced investigators and research infrastructure — a deep bench of clinical investigators and specialist trial sites, particularly in oncology, regenerative medicine, and rare diseases.
• Genetically diverse patient populations — supporting recruitment for studies that may be harder to enrol in other jurisdictions.
• Geographic positioning — a bridge between US, European, and Asian operations.

Together, these factors make Australia a compelling base not just for running trials, but for establishing a broader regional foothold — an area where Lir Bio Advisory's regulatory and governance expertise can help overseas companies move quickly and correctly from day one. 

Establishing a presence in Australia to access these benefits involves practical steps that catch many overseas sponsors off guard — from setting up the local subsidiary required to claim the R&D Tax Incentive, to meeting Australia's requirement that proprietary companies have at least one director who ordinarily resides in Australia.

Lir Bio Advisory supports overseas biotech and pharma companies through exactly this process:

• Australian resident director services, satisfying local governance requirements without you needing to relocate a team member or recruit locally from scratch
• Regulatory strategy and TGA liaison, so your clinical trial pathway is set up correctly from the outset
• Governance and board advisory, ensuring your Australian entity is run in a way that stands up to investor and regulator scrutiny as the program scales
• A deep network of researchers, clinical trial sites, legal/tax practitioners and other service providers, providing you with the right connections across the ecosystem