Commercial investment joint venture with foreigners

Discussion in 'Commercial Property' started by thu555, 10th Aug, 2020.

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  1. thu555

    thu555 Well-Known Member

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    Hi all

    I have some cashed up foreigners that are keen on a joint venture with me (I’m an Australian citizen) to buy a commercial Property with me.

    I am wondering how the set up would work?

    If it’s a 100% cash purchase:

    1. Unit trust with 2 corporations as trustee? 2 corporations are registered in Australia. The foreigner can ‘hold’ their Australian company using. Hong Kong company.

    2. Bare trust & a corporation as a trustee. I will be the director & the foreigner will be one of the shareholder?

    Do I need to apply for FIRB?

    If a loan is required, say 30-40% LVR:

    Will above be Ok? I can guarantee the loan using my Australian company?

    Much appreciated for some information.

    thanks
     
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    You would need legal advice on breaching the Foreign Acquisitions and Takeovers Act. Both of your examples would breach it.
    It will be difficult to borrow too.
     
  3. thu555

    thu555 Well-Known Member

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    I have tried asking for advices but not many solicitors know how to proceed. If there is a good solicitor out there, then please recommend. This is only for commercial assets (and even developments), not residential.
     
  4. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Yes it is a complex area, I refuse to advise on it when people ask. I don't know anyone that does either, but most of the well known tax lawyers would.
     
  5. Cousinit

    Cousinit Well-Known Member

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  6. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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  7. thu555

    thu555 Well-Known Member

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    In term of commercial asset value, the commercial price tag is between $1 - $5M for now. If it works out well, the price tag can increase further.
     
  8. The Y-man

    The Y-man Moderator Staff Member

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    @Omnidragon - know any soli's who can help (in Syd?)

    The Y-man
     
  9. Omnidragon

    Omnidragon Well-Known Member

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    Nah no idea Syd not my thing. The new foreigner laws are pretty confusing too on trusts in NSW.