In Australia, foreign investment is regulated by the Foreign Acquisition and Takeovers Act 1975 (Cth) (FATA) and the Foreign Investment Review Board (FIRB) is responsible for examining foreign investment proposals and making recommendations to the Federal Government.
In June 2020, the Treasurer announced significant changes to Australia's foreign investment review under the Foreign Investment Reform (Protecting Australia’s National Security) Bill 2020, which was passed on 9 December 2020. These changes apply to all transactions entered into from 1 January 2021.
Understanding these changes and knowing how to deal with them will be critical in ensuring a smooth process for your next Australian investment.
We've collated a toolkit of resources to help you get up to speed and welcome conversations about these changes and their impact on your investment decisions.
Key changes at a glance
There are a significant number of changes to the law that will apply to all transactions entered into from 1 January 2021, including
- mandatory notification of interests of 10% or more in "national security businesses" (which is very broadly defined) and "national security land", regardless of value;
- narrowing the exemption for foreign banks taking security over "national security businesses" or "national security land";
- an ability for the Treasurer to "call in" transactions not otherwise requiring approval or (in certain circumstances) to unwind approvals previously given, in order to protect "national security".
- broadening the circumstances in which offshore M&A transactions may require mandatory pre-approval;
- expanding the restrictions on foreign acquisition of 5% or more in Australian media businesses, to include certain online media businesses;
- loosening the rules applying to certain investment funds that have large passive foreign government investors;
- mandatory notification of the acquisition of notifiable interests "passively" acquired as a result of a failure by a foreign person to participate in a share buy-back or capital reduction;
- increased penalties and additional enforcement powers;
- tracing rules for unincorporated limited partnerships;
- a new register of foreign ownership interests – with commencement to be at a future date determined by the Treasurer;
- changes to fees;
- an ability for the government to extend the 30 day review period (by up to 90 days); and
- changes to the treatment of exploration and mining and production tenements.
We've set out in our Briefing Note further information on these changes and their impact on foreign investors, including how it may affect certain types of investments in Australia and offshore M&A transactions.
Members of our team unpack the changes to Australia's foreign investment framework in an online webinar series. All our webinars have been recorded and are available for you to view at any time.
FIRB Reform Fundamentals
Hear from Corporate Partners Geoff Hoffman, Andrew Hay, Kylie de Oliveira
and Samy Mansour as they provide a high level explanation on the changes
to the foreign investment laws.
FIRB Reform for Japanese investors
Bengoshi and Partner Hiroyuki Kano and Senior Associate Shigeki Yamaura
discuss the changes to foreign investment laws and answer questions that
are top of mind for Japanese investors. This session is presented in Japanese.
FIRB Reform for Japanese investors (Tranche 2)
In this follow on to our first Japanese investors webinar, Bengoshi and Partner Hiroyuki Kano and Senior Associate Shigeki Yamaura unpack the changes outlined in Tranche 2 of the reforms released in September 2020, providing further clarity on the technical aspects of the reforms. This session is presented in Japanese.
Want to know more
If you would like to find out more about Australia's foreign investment landscape or the current state of play in Australia please visit our other resources below or reach out to one of our team.
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