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Professional Services


INVESTING in Australia for


CHINESE investors


The Australian regulatory and commercial environment is one of the most conducive in the world to foreign investment. The Australian government and business community have had a longstanding track record of successful cooperation with Chinese investors, and both seek a longer-term partnership with China and Chinese investors. Investing in Australia, like elsewhere, requires a good


understanding of the local regulatory, commercial and taxation environment. There are several key issues for Chinese investors seeking to


make a successful investment in Australia: “ Performing appropriate financial, commercial and taxation due diligence on the target investment to identify the key risks associated with purchase shares in a company or investing into a project that may have a negative impact on the value of the investment.


“ Appraising the market value of the target investment. “ Deciding on the appropriate investment structure and investment vehicle to make the acquisition – in some cases, the investment structure can have a very material impact on the financial return to the investor and the flexibility to introduce new partners into the venture in the future.


“ Consideration of the taxation impacts (both Australian, Chinese and other foreign taxes) of the investment structure and future cash flows.


“ Sourcing the best financing structure for the investment – whether to source local (Australian) debt or foreign debt and in what form and on what terms.


“ Determining whether it is better to negotiate with the target


company directly or work with a local advisor who can assist in negotiations.


“ Determining at what stage to liaise with the Australian Federal and state governments regarding the transaction, and the method in which the approach to government should be made.


“ Human resource issues that may impact on the deal.


“ Political considerations (government policy – current and future, public opinion etc.) that need to be taken into account in making the investment.


“ How they should begin to position themselves leading up to the proposed acquisition or investment.


“ The economic landscape and outlook for Australia in the short, medium and long term that may impact on government policy, interest rates and the transaction itself.


“ Where they should base themselves in Australia.


“ The need to stay informed about key Chinese regulatory, financial and taxation considerations relevant to the proposed transaction. Subsequent to the market entry or execution


of the investment, Chinese firms will also need to consider ongoing regulatory, commercial and accounting requirements. Some of the key post acquisition requirements that Chinese investors will need to prepare for include federal and state taxation compliance, individual employee payroll, taxation and other compliance, financial accounts preparation and statutory audit, IT systems set up, migration and visa services, project management, liaison with government and banks, ongoing monitoring of market


100 Australia China: BEYOND TOMORROW


AUSTRALIA


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