Australia has been a robust economy and having proven its resilience to the global economic downturn of 2008 and beyond it is only natural for investors world over to want to invest in our economy. Below are 3 of the many ways people can invest:
- Loan the funds to a business and receive interest payments for the amount lent. This is ideal if the owners of the business are known to you and you trust them. The advantage of lending in this fashion is that a maximum tax of 10% is withheld from the interest before its paid to you and that is taken to be final tax under the Australian Taxation System.
- Buy shares in the Australian company you want to invest in. Buying shares in a company (no matter how small or big your shareholding is) gives you (partial) ownership of the company. If your return (dividend) are paid out to you out of taxed profits (franked dividends) then no additional tax is payable by you as the Australian Taxation System considers the 30% tax paid by the company as final for non-residents.
- Invest directly under your name in properties, etc. It may be more time-consuming and may get complex managing your investments directly in Australia, but there is no reason you cant invest directly in Australia under your name. The taxation implication of this is that even though you may be a non-resident for tax purposes, you still would have to pay the Australian Tax Office your share of tax as a non-resident on all Australian Sourced income at rates determined under the Australian Taxation System.
The importance of getting your situation specific advice cannot be emphasised enough so do make sure you consult with taxation professionals in both your country and in Australia to understand the implications of investing in Australia both in terms of risk and reward.
BY SURESH RAJANI
Suresh Rajani is the Business Leader at TAX FIRST (An accounting and business advisory firm)
