The government is considering whether to allow companies to be incorporated under foreign corporate law, with foreign companies also being permitted to be shareholders.
The Government is also considering whether the legislation should extend to partnerships between the public and the company, and whether the terms and conditions of these partnerships should be changed.
It is a matter of debate as to whether the foreign company should be treated as a “general public” company and whether it should be required to pay corporate tax.
A spokesperson for the Department of Foreign Affairs and Trade said it was not yet known whether the Government would consider extending this legislation to partnerships with foreign shareholders.
In a letter to the House of Representatives earlier this month, the Minister for Industry, Innovation and Skills said the Government had identified that it wanted to expand the scope of corporate tax treatment for partnerships.
“We are also exploring whether it is appropriate to extend the scope to foreign public companies,” the letter said.
“It is a question of public policy and, as you will see, it is also a matter for the Government to decide.”
Under the Corporations Act, corporations can be incorporated from within Australia and in certain other countries.
But the Australian Government is currently reviewing whether or not to extend this legislation.
A review of the Corporational Tax (Foreign Investment) Act 2015 has been published by the Department.
A spokesperson for Foreign Affairs Minister Julie Bishop said the Minister had no plans to do so.
‘Dealing with foreign corporations’In an interview with ABC Radio’s AM, Ms Bishop said there were already a number of other legislation that could potentially be extended to the private sector, including changes to foreign investment rules.
“[We need to] deal with foreign corporates and that’s why I’m looking at the Corporal Tax (foreign investment) Act to try and do that,” Ms Bishop told AM.
Ms Bishop said she was concerned about the way foreign corporations were treated in the UK, where they are allowed to be limited liability partnerships.
She said the UK had been in discussions with the Government on the issue, but it had not yet come to any agreement.
ABC Fact Check is seeking comments from interested parties.
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