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Are wholesale company incorporation services a designated service?

It depends on the relationship between the wholesale incorporator and the end customer; the test is whether the provider is assisting the customer within the Act's meaning.

It depends on the nexus between the wholesale incorporator and the end customer. The test isn't whether the provider operates wholesale or retail, it's whether the provider is "assisting" the end customer within the meaning of the Act. You should seek independent legal advice for your business on this issue.

The legislative starting point. Item 6 of Table 6 of section 6 of the AML/CTF Act defines the designated service in deliberately broad terms. It captures a person who is "assisting a person to plan or execute, or otherwise acting on behalf of a person in, the creation or restructuring of a body corporate (other than a corporation under the Corporations (Aboriginal and Torres Strait Islander) Act 2006) or a legal arrangement, in the course of carrying on a business." The breadth is intentional and is designed to cover the wide range of activities associated with establishing companies and legal arrangements.

"Assisting" takes its ordinary meaning. The Act doesn't define the term, so it carries its ordinary meaning, applied in line with AUSTRAC's guidance. A provider that engages directly with a customer (taking instructions, completing registrations, paying fees) is plainly assisting that customer.

The wholesale question turns on customer contact. In the wholesale context, the analysis goes like this:

  • No contact with the end customer. If the wholesale provider has absolutely no contact with the customer establishing the company (or legal arrangement) and instead provides purely administrative services - filing, formatting, clerical functions - to support another business such as an accountant, it will be unlikely they are "assisting" the end customer. In this scenario, the designated service is provided by the accountant, not the wholesale provider. The accountant conducts CDD on the customer; the wholesale provider does not.
  • Any contact with the end customer. If the wholesale provider has any contact with the end customer, it will be likely they are providing a designated service to that customer. Examples include sending or following up on regulatory forms, emailing the customer for information, or advising what is required in forms. Where the process was initiated by an accountant acting for the customer, both the accountant and the wholesale provider will almost certainly be providing a designated service to the same customer, and both are reporting entities with their own CDD obligations.

Operational implications for wholesale incorporators:

  • The business's actual workflow determines AML/CTF treatment - not the label "wholesale" or "white-label". Many providers describe themselves as wholesale but have email touchpoints with end customers for things like missing-information requests, signing-page coordination, or post-incorporation follow-ups. Each of those touchpoints is potentially a customer contact for the purposes of the "assisting" test.
  • A genuine pure-backend model (no customer-facing communication at all) can sit outside the regime, with the upstream professional firm carrying the designated service. Any drift into direct customer communication brings the wholesale provider in scope.
  • For providers in scope, the customer base is broad: every end customer of every accountant or law firm they service is potentially a customer of the wholesale provider too. CDD volumes scale accordingly.

See AUSTRAC's Professional designated services page.

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