Corrs lawyers advocate change for "accidental foreigners"

7 November 2014

Corrs Chambers Westgarth partners Andrew Lumsden and Lizzie Knight have identified an anomaly in the foreign investment rules and have proposed a simple solution for legitimate listed Australian corporations to place them on an equal footing.

Recent community focus has been on the impacts of foreign buyers of residential real estate. Corrs believes there is a more significant issue for Australian companies which are “accidental foreigners”.

In response to the House of Representatives Standing Committee on Economic Inquiry into foreign investment in residential real estate, Mr Lumsden and Ms Knight have proposed a simple solution to place Australian companies on the same footing as others. Their solution which reduces cost to Government and companies while increasing housing stock is an exemption for the acquisition of interests in urban land by Australian listed companies. The proposed change is detailed in their submission.

“This is a real issue for listed entities, particularly in the mining and property industries, that may “accidentally” find themselves foreign. We’d like to see this changed to encourage a greater competitive business environment for Australian companies,” said Mr Lumsden. 

Ms Knight said the implications of the existing provisions for listed companies and Government are increased compliance costs with no substantial policy benefit. “The existing requirement that entities are 40% foreign owned need to obtain approval before acquiring an interested in urban land is an unreasonable fetter on the ability of listed companies to transact in the property market.” 

Please contact us for a copy of the submission.

For further information, please email Glenn Taylor or contact by phone on +61 2 9210 6593.