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Structuring Investments into and through Australia


1. Inbound investment into Australia

  • Foreign investors can leverage their Australian acquisitions (within prescribed limits) and, in appropriate circumstances, achieve a ‘step up’ in the tax basis of Target’s underlying assets

2. Australia as a regional holding jurisdiction

  • Foreign investors can use an existing Australian subsidiary to hold other offshore subsidiaries with active businesses
  • Foreign dividends or branch income earned by the Australian holding company should not be taxed in Australia and these profits can be repatriated to the foreign investor without any further Australian taxes
  • The Australian holding company may be able to benefit from Australia’s network of double tax agreements to reduce withholding tax leakage on its foreign dividend income
  • Any capital gains derived from the disposal of active offshore subsidiaries or foreign branch assets should also be tax free in Australia and these profits can be repatriated by the Australian holding company to the foreign investor without any further Australian taxes

Inbound Investment in Australia

Investment Steps

  • Foreign investor incorporates NewCo in Australia
  • Foreign Investor funds NewCo with a combination of equity and interest bearing debt
  • NewCo uses funds to acquire Aust Target
  • NewCo elects to form a tax consolidated group with Aust Target (note: additional structuring may be required if Aust Target is the Head Company of an existing Australian tax consolidated group)

Click here to download the full report: Structuring investments into and through Australia.

Originally published by Prosperity Advisers Group, a fellow LEA Global member.

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