The participants in the Spain-Australia Dialogue analysed Australia’s legal and financial framework
The first session of the seminar organised by the Spain Australia Council Foundation in partnership with the Embassy of Australia to Spain, the Australian Trade Commission and BBVA discussed the legal and financial framework for Spanish companies in Australia. The dialogue was moderated by David Campbell, Senior Trade and Investment Commissioner at the Australian Trade Commission and attended by various representatives of Spanish and Australian companies, giving rise to a rewarding discussion. Campbell highlighted the impact of Spanish investment in traditional sectors but said that the interest in other industries, such as textiles and tourism, is increasing: “Those companies contribute to our country’s growth as they generate a large number of jobs in Australian society,” he stated.
According to Álvaro Ortiz, Chief Economist of Cross-Country Emerging Markets Analysis at BBVA RESEARCH, there are several key reasons to account for the presence of foreign companies in Australia. Firstly, growth in the continent will make a large part of the population rich in the coming years. It must also be noted that Australia welcomes foreigners looking to settling there and, additionally, the country’s proximity to the Strait of Malacca, one of the most important trade routes, works in its favour. Lastly, the country is in the middle of two revolutions: the growing Asian middle class, which will transform consumption patterns, and the urbanisation this trend entails.
Peter Sargent, Head of Transaction Banking for Europe and the Middle East at ANZ BANK, said that, as well as leveraging the conditions offered by Australia, it is crucial to be able to access projects. Sargent emphasised the importance of the work done by institutions like his, “but also that of Austrade and the governments, as they are the ones that make it possible for projects to reach companies.” ANZ, Australia’s third-largest bank and its number one by international footprint, is uniquely positioned in terms of financing. For Sargent, Australia is the perfect bridge to Asia due to its favourable business climate: “It is easy to make things happen from a legal perspective.” However, he recommended working through joint ventures to minimise risk, speed up processes and have access to local expertise from day one.
Navantia is one of the best examples of a Spanish company that is committed to the Australian market. After closing sizeable deals with institutions like the Royal Australian Navy in 2014, it launched Navantia Australia, which currently has 40 employees. Miguel Orozco, who heads up Legal Counsel at the company, compared the way negotiations are carried out with Australia’s DMO with the way they are handled with other countries, such as Turkey and Brazil: “When you have a different process for addressing agreements, the Australian mentality makes it all much easier. Despite the distance, the effort was well worth it.” However, he stressed the importance of having a good legal team to deal with contract negotiation and human resources.
Mathieu Hanaut, a partner at BAKER & MCKENZIE, also mentioned how well regulated the system is, and highlighted that the legislation in place is highly protective of business contracts and agreements. “The law is as stipulated in the agreements themselves, as there is no legislation around them. Therefore, the document itself governs the relationship and the law protects whatever is agreed therein,” he explained. According to Hanaut, this makes business easier, as you can set up a company in 24 hours with very little paperwork and without the need for large investments. “However, you must be very well advised to ensure you draft those contracts properly and are covered on the legal side,” he explained during his address.
Sarah Clarke, Senior Associate at Corrs Chambers Westgarth, agreed with Hanaut and cited the construction sector as an example, explaining that "We often see complex agreements between the employer and the trade unions.” She also mentioned the possibility of outsourcing certain services and the legal issues this could give rise to in the future: “This is a common demand among entrepreneurs, so we advise being very clear on that when it comes to litigating and negotiating collective agreements.” However, according to Clarke, labour regulations have improved massively over the past few years, becoming less complex and easier to apply.