Positioning itself as a more attractive destination for private fund capital, Australia’s parliament passed the so-called Investment Manager Regime (IMR) that will remove uncertainties for foreign investors on how Australia’s tax laws apply to foreign funds.
Similar to regimes in place in the UK and Singapore, the IMR removes doubt that using an Australian based-manager could result in Australian tax when purchasing non-Australian assets.
The stated objective of the IMR is to encourage certain kinds of investment made into or through Australia by some foreign funds that have wide membership, or that use Australian fund managers. To do so, the regime provides non-Australian residents with an income tax exemption for their investments that otherwise might give rise to taxable Australian-sourced income and gains.
Industry trade associations were quick to hail the legislature’s efforts.
The new regime “levels the playing field” with other fund domiciles around the world and in doing so “promises to transform” Australia’s private fund sector, said in a statement Michael Gallagher, who represents the Alternative Investment Management Association in Australia.