Under Australian law, an investor could make an investment directly or through an investment vehicle including a company, a trust, a joint venture, a managed investment scheme or a partnership.

3. INVESTMENTS INTO
AUSTRALIA CAN BE MADE
THROUGH A VARIETY OF
DIFFERENT STRUCTURES,
EACH OF WHICH HAVE
DIFFERENT CONSEQUENCES
FOR TAX PURPOSES.

6. Under Australian law, an investor could
make an investment directly or through
an investment vehicle including a
company, a trust, a joint venture, a
managed investment scheme or a
partnership. The appropriateness of any
one of these methods is dependent on
the desired commercial requirements of a
transaction and the taxation implications
that result from each structure.

7. A increasingly popular investment vehicle for
foreign investors into Australia is the
managed investment trust. The key benefit of
a managed investment trust (“MIT”) is to
access the concessional withholding tax
regime. Under the MIT withholding tax regime,
foreign investors who are a resident of a
country with which Australia has an effective
exchange of information on taxation matters
are eligible for a reduced rate of withholding
tax on fund payments from a MIT. The rate of
withholding tax depends on the residence of
the investor.

10. There are two critical eligibility
requirements to access the
managed investment trust regime:
Ownership requirement — the trust must satisfy a
widely held ownership requirement and must also not
be closely held under the applicable tests
Investment management requirement — a ‘substantial
proportion’ of the ‘investment management activities’
must be carried out in Australia
SMSF Advisory members are considered the leading
provider of trustee, custody and investment manager
services to MITs in Australia. We are able to assist with
both establishing and maintaining MITs.

14. SMSF Adisory’s Australian Financial Services
Licensees are authorised to act as Trustee and
investment manager to MITs. The role of the
Trustee includes:
Responsibility for the compliance and the
governance of the MIT
Ongoing satisfaction of legislative and
regulatory requirements for the MIT
Overseeing the operations and administration
of the MIT
Holding title to the MIT’s assets
Operating the MIT’s bank accounts