Australian companies in 2026 are rethinking how they structure assets and operations. The Opco (operating company) model is gaining traction for its risk management and strategic flexibility, but new regulatory scrutiny means it’s more important than ever to get it right.
What Is an Opco Structure?
At its core, an Opco structure separates a business’s day-to-day operations (the Opco) from its valuable assets, which are typically held in a separate entity (often called a Propco, or property company). The Opco runs the business, employing staff, managing inventory, and generating revenue, while the Propco owns critical assets such as real estate, intellectual property, or major equipment.
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Example: A family-owned manufacturer sets up Opco Pty Ltd to run its factory operations. The land and buildings are owned by Propco Pty Ltd, which leases them to Opco at market rates.
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Typical industries: Hospitality, manufacturing, retail, and healthcare.
Why Are Australian Businesses Using Opco Models in 2026?
Several trends are driving renewed interest in Opco structures this year:
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Risk Isolation: By separating operations from assets, businesses shield critical holdings from operational risks such as lawsuits or insolvency.
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Funding and Succession: Investors or successors can buy into the Opco without acquiring the underlying assets, making deals simpler and more tax-efficient.
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Tax Efficiency: While the ATO is tightening rules, smart structuring can still deliver tax benefits by managing how profits are distributed and assets are depreciated.
For example, as commercial lending tightens in 2026, many SMEs are using Opco structures to secure better financing terms—banks are often more comfortable lending against asset-rich Propco entities, while operational risk stays contained within the Opco.
2026 Policy Changes: What’s New for Opco Structures?
This year, several regulatory developments are impacting how Opco structures operate in Australia:
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ATO Crackdown on Tax Avoidance: The 2026 Budget included new anti-avoidance measures targeting artificial separation of assets and operations. The ATO is focusing on related-party leases and transfer pricing between Opco and Propco.
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Stricter Insolvency Rules: The Corporations Act has been amended to make directors more accountable for asset stripping via Opco/Propco arrangements. There’s a new requirement to demonstrate commercial substance in all intercompany transactions.
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Transparency Initiatives: The Australian Business Registry Services (ABRS) now requires detailed disclosure of related-party structures, including beneficial ownership of both Opco and Propco entities. This is part of a wider push for anti-money laundering (AML) compliance.
Real-world impact: A Sydney-based hospitality group was recently required to restructure its Opco/Propco leases after a review found the rental rates were not at arm’s length, triggering back taxes and penalties.
Best Practices for Setting Up an Opco Structure in 2026
If you’re considering or reviewing an Opco structure this year, keep these key principles in mind:
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Commercial Substance: Ensure all transactions between Opco and Propco are at market rates and thoroughly documented.
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Legal and Tax Advice: Work with professionals who understand the latest regulatory landscape—2026’s rules are stricter than ever.
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Clear Governance: Maintain distinct boards, bank accounts, and records for each entity to demonstrate operational independence.
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Regular Reviews: The ATO and ABRS expect ongoing compliance, so review structures annually to ensure they meet evolving requirements.
Emerging trend: Some Australian startups are using the Opco/Propco model to attract international investors, offering a clean split between high-growth operations (Opco) and stable, income-producing assets (Propco).
Conclusion
The Opco structure remains a powerful tool for Australian businesses seeking to balance risk, growth, and compliance in 2026. However, the days of set-and-forget are over. With tighter regulation and greater scrutiny, businesses must ensure their structures are robust, transparent, and commercially justified.