Rare opportunities abound for lawyers thanks to new agenda

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The government’s changes to the Significant Investor Visa scheme could result in more work for lawyers as more foreign investment dollars flow into Australia.

This is according to Mills Oakley corporate partner Warwick Painter, who told Australasian Lawyer that the changes, alongside further amendments that have been indicated by the Minister for Trade and Investment, will see greater demand for legal review and structuring in order to comply with the proposed targeted investment guidelines.

All in all this spells great news for those corporate lawyers who work in the funds management sector, and law firms would be well advised to bolster teams in preparation, he says.

One important initiative under this new Industry Innovation and Competitiveness Agenda, announced by the Abbott government a few of weeks ago, is a reform of the “complying  investment” criteria under the Significant Investment Visa (SIV).

In the agenda’s release, the government indicated its intention to work through Austrade over the course of 2014/2015, with a view to amend the complying investments under the SIV programme to create greater emphasis on investment directed at key growth sectors.

“They’ve clearly indicated a desire to be more prescriptive as to where the foreign investment for the visa ends up,” says Painter.

And then, an opinion piece by the Minister for Trade and Investment Andrew Robb was published in The Australian.

The Minister was clear in his view that attracting SIV investment into big mining companies, big banks and utilities, commercial or industrial real estate, or even ports and electricity networks, was a shortcoming of the existing SIV scheme, says Painter.

As an early indication of the direction the proposed reforms could take, he thinks this is not merely “a whisper on the breeze”.

“It is more like the roar of a thousand waves rolling onto the beach. When the Minister responsible for Austrade and the proposed reforms expresses views such as [these], expect changes which are more than just minor…

“[They see] benefit in the money being channelled more into venture capital type projects – it will no longer be open slather as to where it will end up. [From these indicators] we think the government’s intention is to extract more value from the SIV for the economy through specific sectors.”
 
 
 
The partner says if these developments get the go ahead, it will make the SIV process more complicated and need more engagement between the funds and the government policy, which  in turn will require greater input by specialist lawyers.

Furthermore, as the government has flagged that Austrade will be primarily responsible as a regulator; this will lead fund managers to need even further help from their lawyers.

“Not only will Austrade be prescribing the categories, but it will also be the entity directly responsible for approving these applications – at the moment the State does that,” Painter says.

“I think if you take literally what the minister said, fund management lawyers need to become more familiar with venture capital fund investments.”

For law firms, this will create more cross-over between PE venture capital lawyers and general fund management lawyers, and the two will need to gear up for a closer working relationship.

And this is exactly what Mills Oakley has been doing behind the scenes, says Painter.

“We personally have been working very closely on this scheme since it came out in November 2012. Mills Oakley is growing out its fund management practice. We’re definitely looking to target that, and we’re looking at the venture capital side as well.

“We think it provides good opportunities for firms to grow that venture capital space where traditionally, these have only come through larger and more global offerings.”

The new PIV scheme is scheduled to start from 1 July 2015, but with Minister Robb’s insightful opinion piece, it seems there is “much more pace” to the agenda than one might expect, says Painter.

He says we may even have some clear indication of exactly what the amendments will be before the end of this year.

“We think this next step looks positive because it will give more structure to the whole scheme.”

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