Overseas creditors: recovering debts from Australian companies

A foreign creditor owed money by an Australian company has the same remedies as a local one: demand, court claim, statutory demand and winding up. The practical differences are service, security for costs and distance. In a liquidation, the claim is converted to Australian dollars and recovered by proof of debt. Taylor David advises overseas creditors on Australian law from Brisbane.

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Key points

Start with ASIC Connect, ABN Lookup and Personal Property Securities Register (PPSR) searches.
A foreign plaintiff is usually ordered to give security for the defendant’s costs.
Once a liquidator is appointed, court claims need leave. Recovery is by proof of debt.
Foreign-currency debts are converted when the winding up is taken to have begun (s 554C).
Unregistered retention of title vests in the Australian customer on insolvency (PPSA s 267).

General guidance only – not legal advice. Please obtain independent legal advice before relying on any of this information. The law is stated as at October 2026.

What should an overseas creditor do first?

Confirm who owes the money. Australian companies are registered with the Australian Securities and Investments Commission (ASIC). A free ASIC Connect search shows status and registered office; a paid extract adds directors. ABN Lookup confirms the trading entity behind an invoice. The PPSR shows registered security interests; ASIC’s Published Notices website shows insolvency appointments.

Then review the contract. A governing-law clause decides which law applies; a jurisdiction clause decides where you sue. A foreign judgment must still be enforced in Australia. Judgments from the United Kingdom, Singapore, Japan, Germany and other listed countries can be registered under the Foreign Judgments Act 1991 (Cth) within six years. United States, Chinese and Indian judgments are enforced only at common law.

Then send a letter of demand. Our debt recovery page covers Queensland demands, courts and enforcement.

How do you sue an Australian company from overseas?

For an undisputed debt of at least $4,000, serve a creditor’s statutory demand at the registered office (s 109X). The company has 21 days to pay. Non-compliance supports a winding-up application in the Federal Court or Supreme Court of Queensland.

For a disputed debt, proceedings can be issued in Queensland or the Federal Court without the creditor coming to Australia. Documents served on the creditor abroad go through Part 7 of the Uniform Civil Procedure Rules 1999 (Qld), which applies the Hague Service Convention.

Expect an application for security for costs. Under rule 671(e) of the Queensland rules, the court may order security where the plaintiff is ordinarily resident outside Australia. Rule 19.01 of the Federal Court Rules 2011 (Cth) lists the same factor. Security is usually a bank guarantee or payment into court.

Overseas witnesses can give evidence by video link. See Part 3A of the Evidence Act 1977 (Qld) and section 47A of the Federal Court of Australia Act 1976 (Cth).

What happens if the debtor enters administration or liquidation?

Suing a company in liquidation needs leave (ss 471B and 500(2)); in voluntary administration the stay is in section 440D.

Proving the debt. Debts and claims arising before the winding up are provable, including contingent and foreign claims (s 553). The liquidator calls for formal proofs under regulations 5.6.39 to 5.6.57 of the Corporations Regulations 2001 (Cth). A rejected creditor has at least 14 days to appeal (reg 5.6.54).

Currency. Under section 554C, a foreign-currency debt is converted to Australian dollars at the “relevant date”. That is the date the winding up is taken to have begun. A method fixed in the contract applies; otherwise the Commonwealth Bank’s rate on that day.

Meetings and proxies. Creditors can attend electronically or by proxy, often an Australian lawyer (Insolvency Practice Rules (Corporations) 2016 (Cth), rules 75-75 and 75-150). A resolution needs a majority in number and value (rule 75-115).

Committees of inspection. A creditor may join the committee that oversees the liquidator. One holding at least 10% in value of claims can appoint a member directly (Schedule 2, Division 80).

Priority and dividends. Liquidation expenses and employee entitlements rank ahead of unsecured creditors (s 556). Before a dividend, the liquidator gives at least 21 days’ notice to lodge proofs (reg 5.6.65). Dividends are paid pro rata in Australian dollars.

Claw-back. Payments received in the six months before the winding up can be recovered as an unfair preference.

How can foreign suppliers protect goods and get paid first?

A retention of title clause is a security interest under section 12 of the Personal Property Securities Act 2009 (Cth). It is also a purchase money security interest (s 14). The Act applies to goods located in Australia (s 6). For priority, register on the PPSR before the customer takes possession of inventory, or within 15 business days for other goods (s 62).

An interest unregistered at administration or liquidation vests in the customer (s 267). Where a director has given a personal guarantee, demand on the guarantor too.

What should you do if an Australian customer stops paying?

Run ASIC Connect, ABN Lookup, PPSR and Published Notices searches.
Check the governing-law, jurisdiction and retention of title clauses.
Register any security interest on the PPSR immediately.
Send a dated written demand and keep proof of delivery.
Choose the tool: court claim, statutory demand or call on a guarantee.
If a liquidator is appointed, lodge a proof of debt and appoint a proxy.

How Taylor David can help

We act for overseas suppliers, lenders, landlords and investors. We advise only on Australian law and Australian-based matters. We can:

report on the debtor’s status, assets and security
prepare demands, statutory demands and winding-up applications
run proceedings in Queensland and the Federal Court
register and enforce PPSA security interests
prepare proofs of debt, act as proxy and defend liquidator claims.

This work sits within our insolvency and litigation practices.

Frequently asked questions

Questions we are often asked

Do I need to come to Australia to recover a debt?

Rarely. Searches, demands, court claims and proofs of debt are handled by your Australian lawyer. Affidavits can be sworn before a notary abroad. Witnesses can give evidence by video link if a hearing is needed. Creditors’ meetings can be attended electronically or through a proxy. Most matters run entirely from overseas without travel.

Will I have to pay security for costs?

Probably, if you sue. Queensland rule 671(e) and Federal Court rule 19.01 both treat residence outside Australia as a ground for ordering security. The court weighs the strength of the claim, any Australian assets you hold, and the difficulty of enforcing a costs order abroad. Security is returned if you win.

How is my foreign-currency claim treated in an Australian liquidation?

It is converted to Australian dollars under section 554C of the Corporations Act 2001 (Cth). The rate is fixed at the date the winding up is taken to have begun. Any method the contract sets applies; otherwise the Commonwealth Bank’s rate. Dividends are paid in Australian dollars, so later currency movements fall on you.

Can a foreign supplier register on the Australian PPSR?

Yes. Registration is online and does not require an Australian entity. Retention of title and consignment arrangements are security interests. Register before the customer takes possession of inventory, or within 15 business days for other goods, to obtain priority as a purchase money security interest. Unregistered interests vest in the customer on insolvency.

Can an Australian liquidator claw back payments made to me overseas?

Yes. An unfair preference claim under section 588FA applies to payments received in the six months before the relation-back day, while the company was insolvent. Being overseas is not a defence. The usual defences, including good faith and no reasonable grounds to suspect insolvency, are explained on our unfair preference page.

General guidance only – not legal advice. Please obtain independent legal advice before relying on any of this information. The law is stated as at October 2026.

Related expertise

Insolvency →Litigation →Reconstruction & Turnaround →

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To discuss your situation in confidence, call Scott D. Taylor on +61 7 3229 9800, email [email protected] or send us an enquiry online.

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