Minister for Revenue and Financial Services Kelly O’Dwyer said the Asia Region Funds Passport will enable the Australian economy to be better integrated with Asia at large.
“It will provide Australian fund managers with access to Asia’s expanding middle class and high net worth individuals, by allowing them to offer their products into the region without having to go through duplicative approval processes in each economy,” Ms O’Dwyer said.
Draft legislation for the Corporations Amendment (Asia Region Funds Passport) Bill was released late December last year, as reported by InvestorDaily.
Alongside Australia, Japan, Korea, New Zealand and Thailand have also signed up to implement the passport.
The Funds Passport is accompanied by the corporate collective investment vehicle (CCIV) regime “which will provide Australian fund managers with a well-recognised, corporate structure vehicle to export to investors in Asia,” according to the statement.
When Treasury released the Passport Funds and CCIV bills for public consultation in August 2017, Ms O’Dwyer said CCIV was an “internationally recognisable vehicle which can be readily marketed to foreign investors".
The Financial Services Council welcomed the legislation for the Passport in a separate statement but also urged government to consider “vital tax reforms”.
“Australia’s complex withholding tax system for funds management raises little money, but harms our competitiveness,” said FSC chief executive Sally Loane.
“If withholding taxes are not reformed, Australia’s fund managers will be at a major disadvantage in the Passport.
“This is because many investors in Passport countries will avoid Australian funds and choose to invest in a foreign fund with a simpler withholding tax system.
“As a result, there is added urgency for the Government to address this significant remaining issue,” Ms Loane concluded.
The Passport Joint Committee, comprised of one representative from each signatory, will hold its next meeting in Sydney in April to discuss the progress of the Passport’s implementation.
