Foreign company rule changes welcomed

The financial services industry has welcomed the Federal Government’s announcement that it intends introducing legislation rewriting the controlled foreign company and foreign accumulation fund rules to attract more companies to Australia.

Among the companies backing the move is Fidelity with its managing director, Gerard Doherty, saying the draft legislation would add to the attractiveness of Australia as a regional financial services centre.

“The proposed reforms will improve the competitiveness of the Australian funds management industry as it leads to a broader range of product offerings and a reduction in compliance costs, which will ultimately be good for local investors,” Doherty said.

Announcing the move, Federal Assistant Treasurer Bill Shorten said it was consistent with the package of reforms contained in the Budget related to Australia’s foreign source income attribution rules.

“This package of reforms will improve the competitiveness of Australian companies with offshore operations by reducing the costs of complying with the controlled foreign company rules,” he said.

Shorten said the changes would also encourage foreign groups to establish regional headquarters in Australia and improve Australia’s attractiveness as a continuing base for multinational companies.

At the same time as announcing the release of exposure draft legislation around the changes, Shorten announced a further round of consultation with the industry before it was ultimately taken to the Parliament.