Cross Border Transactions

Our clients today are becoming increasingly global in their outlook and often present opportunities for expansion in foreign markets. Further foreign businesses are increasingly doing business in Australia and require an understanding of Australian law.

Transactions in a single jurisdiction are familiar to most, cross border transactions on the other hand require knowledge of two, three or more jurisdictions, and the interplay between these.

Businesses looking for revenue growth, technology opportunites, and manufacturing cost savings will explore mergers, acquisitions, or joint ventures to meet their needs.

Similarly businesses may have to recruit offshore, or transfer key staff to offshore locations.
In all cases businesses will have goals that are common in order to effect these transactions including:

    • Minimising risk
    • Maximising economic benefit
    • Efficiency in the process both of time and dollars

In order to attain these goals the business needs to carefully plan, organise and coordinate the process, utilising both internal and external advisers. The nature of cross border transactions adds another layer of complexity to the achievement of these goals.

So what do we mean by cross border? At the simplest level it is a transaction involving 2 or more countries. The differences between a purely domestic transaction versus a cross border transaction arise on many levels.

The cross border transaction requires an understanding of laws in each jurisdiction to ensure that the transaction is structured legally and effectively. Cross border transactions raise specific issues such as Double Tax Treaties, Exchange Control, Foreign Investment Rules, Transfer Pricing issues and Controlled Foreign Corporation rules to name a few.

There are many variables that need to be addressed in even the simplest cross border issue. Active and experienced management of the transaction is vital to ensure successful completion of any cross border transaction.

Recent issues we have advised on include:

    • European software company supplying licenced software in Australia
    • Marketing business dealing with Google invoices originating in Ireland
    • ATO claims of foreign dealing based on AUSTRAC information regarding international transfers
    • GST on services provided over internet by Australian resident company
    • Branch operation in Australia of offshore incorporated company
    • Residency status of offshore company employee working in Australia

In all cases cross border transactions require careful project management and execution to arrive at the required outcome.

If you are considering a cross border transaction please ensure that you contact our office on 02 9299 7944 as early as possible in the process for a confidential discussion of your requirements.

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