June 2004 - Association of Dutch Businessmen

BUSINESS
Incentives are offered in a wide variety of forms
including grants, tax exemptions, tax deductions
or the provision of infrastructure services at
discounted rates.
When UBS Warburg established its Asia Pacific
Regional IT Technical Support Centre in Australia
at the end of last year, it was the first international
bank to open its work operations in Australia, and
brought 200 jobs to New South Wales (NSW). The
chairman and CEO of UBS in the Asia Pacific, Clive
Standish, praised the Government’s assistance in
bringing the project to fruition.
“The manner in which the Government
facilitated, encouraged and supported our desire
to establish this centre in NSW has helped create
these jobs,” Mr Standish said.
Other international firms which have chosen
Australia as a key place to do business in Asia
include Deutsche Bank, which moved its entire
Asian funds management from Tokyo to Sydney,
and IBM, which chose Sydney over Singapore for
its e-Innovation Centre. The Straits Times reported
at the time that “it is understood that Singapore
offered a better incentive package in dollar
terms but IBM was swayed by the large pool of
experienced IT professionals in Australia.”
Henry Wang, Invest Australia’s Senior Investment
Manager, SE Asia says, “One of the most significant
benefits of Australia as a place for business is our
highly-skilled and multilingual workforce. Australia
provides investors with a robust, competitive and
diverse economy, characterised by strong and
consistent growth. Australia also offers a sophisticated
telecommunications infrastructure, and offers a
clear advantage of adopting new technology, and
being a test bed for new product launches.”
Foreign investment
Generally, prior approval from the Australian
Government is required before acquiring or
establishing a new business. Approval
will need to be sought from the Foreign
Investment Review Board (FIRB) for the
acquisition of shares in a corporation or
the purchase of a business where the total
assets exceed A$50 million, where the
establishment of a new business with total
investment exceeding A$10 million, and
where the takeover of offshore companies
whose downstream Australian assets
have a value exceeding A$50 million or
account for 50% or more of the target
company’s global assets.
The process to obtain approval is
renowned for being quick and efficient.
Once lodged, the application activates a time clock
so that if action is not taken against the proposal
within 40 days, the Government loses its ability
to block or impose conditions. In most cases, a
decision is made within 40 days of lodgement and
approval is normally granted unless the proposal
is contrary to the national interest. The FIRB claims
that over 98 per cent of applications are approved.
Although approval will still need to be
sought for other share acquisitions, business
purchases and the establishment (in most industry
sectors) of new businesses, these will normally
be automatically approved where the total
underlying assets are less than A$100 million.
The Banking, Civil aviation (International
and Domestic), Airports, Media, Newspapers,
Broadcasting, and Telecommunications sectors
are subject to stricter legislation.
Once approval is obtained by the FIRB, a foreign
company carrying on business in Australia must then
register as a foreign company with the Australian
Securities and Investment Commission (ASIC).
One particularly important piece of legislation
under Australia’s common law system for businesses
to be aware of is the Trade Practices Act 1974. It
contains anti-trade provisions
and other key restrictions, with
the aim of consumer protection.
It deals with mergers, anticompetitive
conduct, misleading
or deceptive conduct and
unconscionable conduct. The
Australian Competition and
Consumer Commission (ACCC) is
the principal regulator in regard
to the Trade Practices Act.
Australia
provides investors
with a robust,
competitive and
diverse economy,
characterised
by strong and
consistent growth.
Australia also offers
a sophisticated
telecommunications
infrastructure, and
offers a clear
advantage of
adopting new
technology, and
being a test bed for
new product
launches.
Melbourne
Business tax
Major reforms have recently
been made to the tax system to
improve it. The reforms lowered
the corporate tax rate from 36
per cent to 30 per cent and
reduced the capital gains tax.
Quite a number of direct and
indirect taxes are levied by both
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Vol.14 • No. 6 • June 2004