This was a welcomed initiative given that one of the greatest practical difficulties in attracting foreign investment capital to Australia is the fact that, at present, there is basically no choice in structuring flow through vehicles other than to adopt a trust.
While trusts are reasonably well understood by the Australian investment community, they are not the CIV of choice in most other parts of the world and hence there is confusion and costly delay as foreign investors seek to understand the nature of a trust and why they cannot invest via typical CIVs used in other investment jurisdictions.
The Board completed its review and provided its report to the Assistant Treasurer in December 2011. The Board’s website indicates that “the timing for release of the Board’s Report to the public is a matter for the Government to decide”.
The report has not been released and so the dialogue continues in explaining to foreign investors the necessity/merits of investing into Australia via a trust.
Complexities can also arise through the overlay of investment requirements in the home jurisdiction of the investor. Example jurisdictions include Germany and the US. Recent amendments to the German foreign investment code assist in streamlining the structuring of funds from Germany into Australia.
We have also achieved success in recent times through working with US lawyers to ensure that trust vehicles can be viewed as 'blocker' vehicles from a US perspective and hence satisfy relevant US requirements.
Further progress in this can only assist in reducing red tape and make Australia an even more attractive investment destination.