According to AIM, non-residents can only buy Foreign Investment Review Board-approved new-build residential properties. These tend to be more limited, commonly overpriced and often not in prime, sought after locations, and restrictions are even more strictly enforced.

“Few foreigners are aware of the restrictions on foreigners buying Australian property. My patented legal structure allows foreign investors to access the entire Australian resale market and buy their dream property 'Down Under'. This is more important than ever now, with the government cracking down on foreign investments in Australia with even more powers to seize and sell illegally purchased properties and to keep any capital gain, examples of which are surfacing daily,” Grubisa said.

AIM says that an “abundance” of companies are promoting and marketing off-plan property developments and house and land packages in Australia to foreign purchasers. Because these properties are limited, they are often sold at a premium – a finite supply allows developers to charge more, knowing that non-Australians will have to pay.

Therefore, foreign purchasers who are not legally allowed to access the whole Australian property market are operating at a disadvantage when it comes to buying Australian property.

This, the firm says, is where its legal structure, which received its patent in November last year, comes in. This is a legally-compliant Australian company which owns the property, of which the foreign individual holds 15 per cent of shares (or 40 per cent if aggregated with a spouse or other foreign individual) and which has a resident Australian director. The individual also holds a mortgage over the property. The company owning the property is an Australian-incorporated company duly registered with the Australian Securities and Investments Commission (having an Australian resident director). The title to the property is registered to the company and noted on the Register of the Land Titles Office in the state where the property sits.

Custodians of client investments are the individual and an Australian resident director, with a mortgage held by the individual over the property as security.

Properties in Australian capital cities will start at about A$200,000 ($154,241) for a small apartment or retail/commercial property, and can go up to many millions for residential and agricultural or commercial, with larger investments going into the hundreds of millions.

“Never before has our patent been more timely in light of the government now cracking down on foreign investment and proposing heavy penalties, fines and application fees for foreigners wishing to invest in Australia. It’s crucial that investors are legally compliant and that their investment in Australia is done properly and safely,” Grubisa said.

Australia is attractive, Grubisa and colleagues say, because its property market has provided returns of more than 7 per cent annually over the past 30 years.

The AIM structure overcomes Australian restrictions on foreigners but it doesn’t violate them – the structure doesn’t exploit a loophole and is fully compliant, and hence robust, the company said when asked by this publication. For example, AIM said it meets all the provisions of the Foreign Acquisitions and Takeovers Act 1975. The patent for the structure was provided by the Australian government.  Under Australian law any foreign individual or entity trying to get into Australia (in business, agriculture, property etc) has to comply with the provisions of the Foreign Acquisitions and Takeovers Act (1975) Cth (“The Act”). Amongst other things that piece of legislation relevantly provides that a foreigner cannot hold shares in any Australian company greater than 15 per cent or, if held aggregately by more than one foreigner, no more than 40 per cent between them. If it is proposed that they wish to own more (eg to take over an Australian company) then they must obtain the approval of the FIRB – the Foreign Investment Review Board have the power under the Act to grant exceptions.  Similarly, with property, the Act provides that non-Australians cannot own property in Australia. There are certain exceptions, eg where the property is brand new. In order to rubber stamp this, any foreigner buying into Australia must first pass muster with the FIRB (they will tick boxes to ensure the property is brand new etc).

Responding to a query about the legal robustness of the structure by a reader of WealthBriefingAsia, Grubisa said that such concerns, may stem from a recent case of Mr Xu, a Chinese billionaire who bought a A$39 million Sydney mansion for his son late last year. It was purchased via an Australian company, Golden Fast Foods Pty Ltd. The FIRB has ordered that the property be sold  because Mr Xu purchased it via a company in which more than 15 per cent of the shares were held by foreigners in breach of the Foreign Acquisitions and Takeovers Act. The suggestion from the reader that AIM's structuring needs FIRB approval as it falls outside the legislation insofar as it is controlled by foreigners is incorrect.