• Exemption for an interest in a multi-industry foreign company

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    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

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    Your interest in a multi-industry foreign company is exempt from FIF taxation if the foreign company is principally engaged in two or more of the following activities:

    • construction
    • development of real property through capital improvement
    • receipt of rental income from commercial real property owned by the company where the management, maintenance and security services for the property are principally provided by the directors or employees of the company or by a wholly owned subsidiary that is principally engaged in providing those services through the directors and employees of that subsidiary
    • provision of management services for real property by the directors or employees of the company
    • acting as agent in connection with the sale or purchase of commercial real property
    • general insurance business of a kind that the company was authorised to carry on under the law of its place of residence
    • life insurance business of a kind that the company was authorised to carry on under the law of its place of residence
    • activities that allow an exemption under the active business exemption. [subparagraph 523(b)(ii)]

    The foreign company must also be listed on a stock market of any approved stock exchange. The class of shares you hold in the foreign company must be widely held and actively traded on a regular basis on a stock market of an approved stock exchange during the period in which the exemption applies to you. A list of approved stock exchanges is at Schedule 12 of the Regulations. See Appendix 1: Approved stock exchanges. [section 523]

    Last modified: 27 May 2005QC 17512