Combined presentation final_18september

UNCLASSIFIED 1

A presentation for British companies: One-hour masterclass on how to succeed in business Down Under

IntroductionPresented by:

• UKTI Australia & New Zealand: Scott Strain, Director for Trade

• Allen & Overy: Michael Parshall, Partner

• RBS: Paul McGovern, Head of Cash Management

• Australian British Chamber of Commerce: David McCredie, CEO

2In partnership with:

UKTI Australia webinar schedule18 September: Australia the best business opportunities and how to access them

25 September: Establishing a business in Australia: what you need to know

2 October: How to export to Australia trouble free

16 October: Australian economic update: what comes after the boom?

23 October: Fashion online: selling to Australia

31 October: Super telescope, super opportunities: British Business and the Square Kilometre Array (SKA)

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Why Australia?

In partnership with:

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Why Australia?• You’ll feel at home immediately:

• Over 1,000 UK companies and more Brits than in any other country

• Very similar business, legal and regulatory culture

• Best performing OECD country economically, with good growth prospects

• Strong Australian dollar making UK goods and services more affordable

• Closely linked to fast growing Asia-Pacific nations

• Significant opportunities for UK companies in oil and gas, health, ports, transport infrastructure, ICT, education, low carbon, financial and business services

In partnership with:In partnership with:

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A comparison with AustraliaAustralia UK

Population 23 million 62 million

Global GDP ranking 12th (IMF 2012) 7th

GDP growth est. 2013 2.5% (OECD May 13)

0.89%

GDP per capita ($US 2012)

$67,700 ($US 2012 IMF)

$28,032

Ease of doing business (World Bank 2011)

10th (WB 2012)

7th

Unemployment (April 2013)

5.5% (May 13 ABS)

7.8%

Land mass – sq kms 7 692 000 242 000


UK Exports to Australia• UK exports to Australia grew by 80% from 2007-2012 to £10.3 billion

• Total UK goods exports growth was flat in 2012, but to Australia still increased 6%

•7th biggest market for services exports and 18th largest for goods

• UK is 2nd biggest foreign direct investor in Australia


Australia: it’s bigger than you think


Australia: the main population centres


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Key Growth Sectors


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Transport Infrastructure


Rail Projects in AustraliaProjects with committed funding

Australian Rail and Track Corporation: Upgrades to the Northern Sydney Freight Line between North Strathfield and Newcastle, Commenced in 2012, Expected Completion: 2016; Cost: $1110m

Australian Transport and Energy Corridor: Construction of an inland railway from Surat coal basin to the Port of Gladstone, Construction to commence in the coming months, Expected completion: 2014; Cost: $1000m

Queensland DTMR: Cross River Rail – 18km north-south rail line in the Brisbane CBD, Plans announcedExpected Completion: N/A; Cost: $4500m

The North West Rail Link A 23 kilometre extension –including 16.9 kilometres in tunnel- to the existing City Rail network from Epping to Rouse Hill .Estimated capital cost of the project is $7.5 to $8.5 billion.

Perth Rail Public Transport Package $500 million over 10 years to deliver a public transport project in Perth", either the $1.8 billion MAX light rail system or the $1.9 billion rail line to Perth Airport.;


The Nation Building ProgrammePotential Projects

NSW State Light Rail -project cost is an estimated $1.6 billion.

NSW State Rail Authority: Western Express City Rail Service – new underground platforms at several central stations,Start date 2015, Expected Completion: N/A Cost: $5430m

Melbourne Metro - $3 billion contingent on matched funding from the Victorian Government, flagged for delivery as an availability Public Private Partnership (PPP), with the Commonwealth Government also noting an additional provision to support future availability payments;

$75.0 million for the Port Botany rail line upgrade to improve access and connectivity between the port and the future Moorebank Intermodal Terminal and future planning for the Metropolitan Freight Network. Access and connectivity between the port and the future Moorebank Intermodal Terminal and future planning for the Metropolitan Freight Network.

Leah GartnerSenior Trade Development ManagerRailways, Advanced Engineering and [email protected]


Major Road ProjectsMajor Road Projects

West Connex, NSW

East West Link, Victoria

Bruce Highway, Queensland

Opportunities

Construction

Design,

Project Management

Engineering,

Project Finance & PPP

Drainage,

CCTV,

Road safety management and providers of building equipment, materials, and supplies.

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Antonia YendellSenior Trade Development ManagerUKTI [email protected]


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Resources


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Major offshore LNG projects

Richard GoldsmithSenior Trade Development [email protected]


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Projects we are targeting


Australian opportunities: mining─ As the mining boom moves from

phase 2 to 3 in 2013, the nature of opportunities is shifting

─ The focus on cost-control is critical for identifying opportunities

─ Hi-tech machinery, eg. Automated, remote-control equipment.

─ UK export potential is not limited to mining-specific goods


Projects: QLD & WACarmichael Coal Project ($6.8bn)

Adani Mining. Feasibility Stage.

Alpha ($10bn) and Kevin’s Corner ($4.2bn) Coal Projects

GVK/Hancock Coal. First coal 2016. Work package on ICN Gateway

Galilee Coal Project ($8.8bn).

First coal 2016

Waratah Coal. First shipment 2015

South Galilee Coal Project ($4.2bn). At Feasibility stage

.

Roy Hill Iron Ore Mine & Infrastructure ($9.5bn)

Hancock Prospecting. Production expected 2015.

Oakajee Midwest Development ($4bn)

WA State Govt/private. On hold pending review.

West Pilbara Iron Ore Project ($6bn)

Australian Premium Iron JV. First shipment 2015


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Services


Financial & Professional servicesEmerged from the global financial crisis relatively intact

Finance and insurance is the largest sector in the Australian economy, worth more than £83 billion in 2011

Australia has world’s fourth largest asset pool due to ‘superannuation’. Assets reached approx £900 billion June 2011

Contact [email protected] for more information


mailto:[email protected]

Australian opportunities: ICTICT contributes 4.6 % of Australia’s GDP (AU $82 billion) IBSA Dec 2010

Building v fast broadband network to cover 95% of population (in 8-10 yrs)

At A$35.7 billion it’s the most expensive infrastructure project in Australia’s history

Opportunities in e-Health, e-Learning, digital entertainment, e-commerce for mobile

Internet usage in Australia is 90% penetration (5th best in the world)

Contact [email protected] for more information



Australian opportunities: e-commerceAustralians spent around £7 billion online in 2011

Online sales grew 90% from 2010 to 2011

Opportunities in sporting and outdoor goods, cosmetics and beauty products, books, media and fashion

Goods under $1,000 bought overseas do not attract 10% GST

Contact [email protected]

for more information


Australian opportunities: hospitals

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Major projects

New South Wales Hospital building programme will see $10 billion spent over the next 5 years on new and redeveloped hospital facilities.

Projects and programs already underway:• Major hospital upgrades at Blacktown (due 2016), Campbelltown (2016), St George (2014), Hornsby (2016), Bega (2016), Dubbo (2014), Wagga Wagga (2017), Tamworth (2016), Lismore, Port Macquarie (2015) and Kempsey (2016).

• Planning is underway for new hospitals in Byron Bay, Maitland and Sydney’s Northern Beaches to meet the future health demands of these regions.

More info: http://www.hinfra.health.nsw.gov.au/projects/capital-projects?5701_p=1

Contact: Joe Dodd at [email protected]


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UKTI Australia

How we can help


How UKTI can help?Passport to Export

Gateway to Global Growth

Export Market Research Scheme

Overseas Market Information Service

Trade show Access Programme

Trade Missions

[email protected]



© Allen & Overy 2013 27

Michael ParshallPartner

Legal considerations in establishing an entity in Australia

© Allen & Overy 2013© Allen & Overy 201© Allen & Overy 201

Introduction

– Sound business environment Stable, diverse and democratic society with a skilled workforce

and strong political, legal and financial institutions Stability, prosperity and proximity to the Asia-Pacific region

– Well-established, open and efficient legal framework Federal, state and territory, and local government laws and

regulations Similar to the UK, Australia has a common law legal system Each Australian jurisdiction has its own judicial and court system

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© Allen & Overy 2013© Allen & Overy 201

Starting a business in Australia– Five principal business structures available in Australia:

company; joint venture (incorporated or unincorporated); trust (unit or discretionary); partnership (general or limited); and sole trader.

– Most common business structures for foreign investors:

– Many mining projects in Australia are operated as unincorporated joint ventures.

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Structure Considerations

Wholly or partially-owned subsidiary (i.e. company limited by shares) of the foreign company

- Taxed on global income - Fully taxable at 30% by assessment - No further tax on distributions from taxed profits (dividend withholding tax at 30%, reduced under treaties, on distributions from untaxed profits)

Australian branch of the foreign company

- Taxed on income attributable to Australian branch- Fully taxable at 30% by assessment- Ease of repatriation of profits- Same legal entity


Starting a business in Australia

– Foreign companies must be registered with ASIC before they can carry on business in Australia.

– Registration typically takes 2-4 weeks (including delays to obtain the required certified copies of governance documents)

– A company does not “carry on business” merely because it: maintains a bank account creates a security interest in property becomes a party to legal proceedings holds property or invests funds

– Permanent business activities can give rise to a taxable presence in Australia.

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Companies limited by shares

– Companies incorporated in Australia are regulated under the Corporations Act 2001 (Cth).

– Proprietary companies may be large or small. Public and large proprietary companies have increased disclosure and governance obligations.

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Companies limited by shares

Public (limited) Proprietary (Pty Ltd)

May not be listed on ASXMay be listed on ASX

Must have at least one Secretary who is ordinarily resident in Australia

May issue prospectus for offer of shares, debentures or other securities

May not engage in any activity that would require a prospectus

No requirement to have a Secretary

Must have at least one who is ordinarily resident in Australia

Limited to 50 non-employee shareholdersUnlimited

Must have at least three (two of whom must be ordinarily resident in Australia)

Shareholders

Directors

Secretary

Raising Funds

ASX listing


A brief comparison – Australia v UK

Australia United Kingdom

Type of company Proprietary Limited (Pty Ltd) Limited (Ltd)

Limited (Ltd) Public limited company (PLC)

Directors Must be natural persons above the age of 18

Must have at least one natural person above the age of 16

Secretary Not required to have a company secretaryCompany secretarial services can be outsourced to third party eg accounting/specialist company secretariat firms

Not required to have a company secretary

– Australia (under the Corporations Act) and the UK (under the Companies Act 2006) have similar requirements for companies in many respects e.g. annual company statements, auditor and the lodgment of financial statements.

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Corporate Regulation in Australia

ATO/OSRs

Tax and stamp duties Acts

• ATO administers Federal taxation system

• Conducts random audits to verify individual and company assessments

ASX

ASX Listing Rules

• Regulates listed companies

• Requirements relating to market awareness and provision of information

• Guidance on governance

ASIC

Corporations Act

Regulation

•Mergers & acquisitions

•Shareholder disclosure of interests

•Trading in financial products

•Fundraising laws

FIRB

Foreign Acquisitions

and Takeovers Act

• Regulates foreign investment in Australia

ACCC

Competition and Consumer Act

• Administers fair trading, competition and consumer protection legislation

• Regulates unfair market practices, product safety and product liability

Governance

•Directors duties

•Financial reporting requirements

•Continuous disclosure requirements

•Auditing

Corporate regulation and governance

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Directors’ duties

– Broadly similar to those prescribed under UK law.

– Duties primarily prescribed under the Corporations Act impose duties on directors, including a duty to act: honestly; in good faith in the interests of the company and for a proper

purpose; without improperly using their position or company information; with due care and diligence; and in a manner that avoids conflicts of interest (they must disclose

any material personal interests).

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Allen & Overy in Australia

– Leading global and Australian firm.

– Our Australian practice focuses on core areas of corporate, banking and finance, and litigation.

– Combination of local and global expertise to provide our clients with advice on complex domestic and cross-border transactions involving Australia as well as ground-breaking legal solutions.

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© Allen & Overy 2013© Allen & Overy 201© Allen & Overy 201 36

Contact details

These are presentation slides only. The information within these slides does not constitute definitive advice and should not be used as the basis for giving definitive advice without checking the primary sources.

Allen & Overy means Allen & Overy LLP and/or its affiliated undertakings. The term partner is used to refer to a member of Allen & Overy LLP or an employee or consultant with equivalent standing and qualifications or an individual with equivalent status in one of Allen & Overy LLP’s affiliated undertakings.

Michael Parshall Claire GaltPartner Senior AssociateLevel 25, Castlereagh Street | Sydney 2000 | Australia Level 25, Castlereagh Street | Sydney 2000 | AustraliaDirect +61 2 9373 7738 | Tel +61 2 9373 7700 Direct +61 2 9373 7740 | Tel +61 2 9373 7700 www.allenovery.com www.allenovery.com

http://www.allenovery.com/

http://www.allenovery.com/

September 2013

Managing and operating bank accounts in Australia

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Establishing bank accounts and banking facilities in Australia

Regulatory framework

• Australia is an open market but our regulatory framework is quite stringent. Both international and local banks need to know who they are dealing with

• Australia has a well developed “Know Your Customer” (KYC) regulatory framework

• Your bank will need to identify the company along with it’s designated authorised representatives and account signatories

• There are a number of ways your bank can identify your business in Australia in order to open bank accounts

EstablishmentLocal and foreign companies who have a registered Australian business

Foreign companies carrying out business directly in Australia

Non resident companies

Registration

Australian Securities and Investment Commission (ASIC) will provide an Australian Company Number (ACN). The Australian Taxation Office (ATO) will issue an Australian Business Number (ABN).

ASIC will issue an Australian Registered Body Number (ARBN).

Businesses or foreign entities not registered in Australia can still establish bank accounts in Australia. These bank accounts will be established as non resident bank accounts.

Comments

Registered Australian businesses that comply with all company tax rules. Businesses with ABN’s can have direct access to all payment and collection systems in Australia. ABN used when dealing with tax office, government departments and agencies. ACN used by banks for our KYC and ABN used for the banks reporting to the ATO.

Companies issued with ARBN’s work similarly to ACN’s. Clients with ARBN’s will have the same account, payment and collection capabilities, however they will come under different tax legislation. One difference is clients issued with ARBN’s will incur Withholding Tax (WHT).

There are payment and collection restrictions on non resident accounts. WHT is applicable on all non resident accounts.

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Different types of bank account structures

• Your company’s legal structure will define the type of bank account structures available. It is imperative you understand this as it will ultimately impact the set up of your bank accounts and banking facilities in Australia.

• Your Australian cash management banking provider will be able to provide you possible account types and structures to meet your needs. This may include AUD or foreign currency accounts domiciled in Australia or offshore.

• As an open market Australia has well developed domestic and international cash management solutions

• Your bank account structure may also involve pooling or sweeping local and foreign currency funds in country or internationally to provide you a complete liquidity management solution.

• Work with your bank in Australia and the UK to establish the best solutions to meet your needs

Developed liquidity and structured solutions will deliver optimum cash flow and working capital

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Payment channels in Australia

Payment channels

• Australia has an advanced range of payment channels to facilitate all corporate clients' payables and receivables requirements. In fact Australia has over 40 different payables and receivables options available to corporates

• These range from over the counter paper based transactions through to fully integrated web based electronic banking systems and eCommerce payment options

• Payment and receivable options all fall within the five main Australian Payment Clearing Systems that are almost identical to those in the UK. The only difference is the terminology used.

• Please find below the key Australian and UK equivalent Payment Clearing Systems

Payment channels in Australia Payment channels in UK

Australian Payment Clearing System 1 – Australian Paper Clearing System (APCS). Encompasses all paper based deposits and cheque payments. Most paper based transactions are facilitated as over the counter transactions for processing.

1 The UK paper based clearing system is effectively the same as Australia

Australian Payment Clearing System 2 – Bulk Electronic Clearing System (BECS). This is also referred to as direct entry or the more global term of ACH. This payment channel is used for most electronic payments and payroll files.

2The UK BECS equivalent system is BACS (Batch Automated Clearing System) or the more global terminology of ACH

Australian Payment Clearing System 3 – Consumer Electronic Clearing System (CECS). This relates to all cards issuing and cards acquiring transactions processed through merchant terminals, ATM or Point of Sale (POS) terminals.

3Again the UK cards issuing and cards acquiring system is identical to that used in Australia

Australian Payment Clearing System 4 – High Value Clearing System (HVCS). This relates to Australian RTGS (Real Time Gross Settlement System) payments. Used for very quick intra-day transfer and settlement of funds.

4The UK equivalent RTGS payment channel is Clearing House Automated Payment System (CHAPS)

Australian Payment Clearing System 5 – Cash 5 The UK cash system5

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3

2

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What global corporate treasurers are telling us

PWC 2012 corporate treasurer survey

• As advised in the PWC 2012 Corporate Treasurer Survey, two of the key items treasurers are thinking about are cash management optimisation and working capital optimisation

• The Survey also reports that when treasurers are conducting business in new markets, they are challenged by how to better manage cash and liquidity in each country and across the globe and how to improve visibility and control in each country

Global network banks can help you solve these challenges

• Global cash management banks can provide you consolidated in country and global banking systems that will deliver immediate visibility and control of all your accounts globally. The visibility and control of these accounts can be managed from anywhere in the globe and you can determine which accounts and services your in country and global teams have access to

• Your in country and global cash management account structure is key to cash optimisation. By working with banks that have the in country capability and global solutions you will optimise cash in country and around the globe

• Global banks with in country capability have the tools treasurers need to optimise working capital. This is achieved through a global electronic banking channel that has the ability to manage all in country and global payments and receipts thus ensuring working capital can be maximised for UK corporates

• Australia is in a challenging time zone to maximise global working capital, however global banks now have the solutions to this problem. This is achieved through a global account structure that facilitates the sweeping and or pooling of funds across countries and currencies as required in a timely manner, meaning funds can be available for use at the country or global level

To best manage cash and liquidity in country and globally, utilise a global cash management banking provider who has all the tools to deliver this outcome. These tools include in country and global payables channels, ensuring money can be

moved or notionally pooled and be available for use at both the in country and global level.

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Funding and repatriating funds efficiently

• The tyranny of distance between the UK and Australia provides unique challenges in managing your global cash flow effectively and the timing of funding or repatriating from your Australian business

• Unless you get the timing right payments from the UK to Australia are rarely processed on the same day

• Your global cash management provider can deliver you the optimum solutions to best manage this process to ensure the timely receipt of funds

• Please find below table outlining the standard funding and repatriation process and timeliness

Repatriating funds from Australia to the UK

Australia is in a favourable time zone to repatriate funds back to the UKAustralia is in an unfavourable time zone for timely receipt of funds, hence

funds will not be received until Day 2

Transfer of funds on Day 1 will be received in the UK on Day 1Your international cash management banking provider should be able to

help you with timely receipt of funds or use of funds on Day 1

Funding from the UK to Australia

Australian domiciled bank accounts in AUD or FCY

Utilise your banks in country and global capabilities to maximise use of working capital

Establish cross border, cross currency sweeps and/or cross border notional pooling solutions

This will allow you to utilise funds in country and globally without delays in funding your Australian account

Discuss your requirement with your international cash management banking provider to ensure you receive the optimum in country and global liquidity solutions

• Please find below potential solutions that will assist you managing your in country and global liquidity

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Tips to successfully set up your banking facilities in Australia

Make contact early Leverage your local banks’ international network to get advice on how to establish an optimal UK-AUS banking nexus that meets your needs in both jurisdictions

Provide as much information as possible

Know how your business will be registered and will operate, know what key controls are needed and whether pooling or sweeping will be of value to you

Think forwardConsider the growth plans for your business and ensure you have a banking partner that can meet your needs today and into the future

ConvenientConsider other banking requirements. Debt funding, FX and guarantee issuance are regular requests made along with the opening of bank accounts

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Australia is open for business

Paul McGovern

Director – Head of Cash Management Australia

The Royal Bank of Scotland plc

Level 23, 88 Phillip Street

Sydney NSW 2000

Phone: +61 2 8259 5468

Mobile: +61 466 778 530

Email: [email protected]

We look forward to seeing your business in Australia and please contact me should you wish to discuss your existing or prospective banking requirements in Australia.

AUSTRALIAN BRITISH CHAMBER OF COMMERCE

3 Great Reasons to Join the Chamber

1.Events and Networking

2.Information and Connections

3.Publications and Branding

SPEAKERS

The Rt Hon William HagueUK First Secretary of State

Kerrie MatherCEO, Sydney Airport Corporation

Stuart GulliverGroup Chief ExecutiveHSBC Holdings

Naomi SimsonFounder, RedBalloon

CHAMBER EVENTS

PUBLICATIONS

• Quarterly Magazine• Member Information Bulletin• Newsletter• Business Directory Listing• Closed User Group

CONTACT USNational and NSW Office

Suite 2, Level 153 Spring StreetSydney NSW 2000

Enquiries: Louisa WatsonPhone: 02 9247 6271 Email: [email protected]

VIC Office

Level 16, 525 Collins StreetMelbourne VIC 3000

Enquiries: Helen WalfordPhone: 03 9650 6000Email: [email protected]

WA, SA and QLD enquiries, please contact our National Office:

Contact: Louisa Watson Phone: 02 9247 6271Email: [email protected]

Questions?Ask our panel:

• Scott Strain, UK Trade & Investment

• Michael Parshall, Allen & Overy

• Paul McGovern, RBS

• David McCredie, Australian British Chamber of Commerce
