Incoming changes to Australia's foreign investment framework: What investors need to know

On 19 May 2026, Treasury announced a suite of reforms to Australia's Foreign Investment Policy and announced proposed changes to the law with the aim to streamline and strengthen Australia's foreign investment regime and the application of the Foreign Acquisitions and Takeovers Act 1975 (Cth) (FATA).

These reforms come off the back of the Australian Government's commitments outlined in the 2026-27 May Budget, and Treasury's investor consultation in late 2025 – many of those matters which Treasury sought consultation on are proposed to be implemented in this suite of reforms, a summary of which is set out below.

What will these changes do?

The reforms effectively split investments involving foreign investors into two camps: Low-risk, and High-risk.

Streamlined requirements for low-risk foreign investments

Treasury proposes to speed up and simplify the review process for low-risk foreign investments. Foreign investors undertaking a "low-risk" investment can expect faster review timeframes within 30 days, fewer requirements to notify, and simplified post-acquisition reporting.

Low-risk applications would need to have the following characteristics:

Applicant

• has received a foreign investment approval in the past 24 months;

• is not subject to extrajudicial direction; and

• has no record of non-compliance or character concerns.

Proposed transaction:

• is not in a sensitive sector or business (as identified in the Australian Foreign Investment Policy);

• has no national interest sensitivities; and

• has a straight-forward and transparent corporate transaction structure.

Strengthened requirements for high-risk foreign investments

For high-risk foreign investments in sensitive sectors, including critical minerals, national security, critical technology and critical infrastructure, Treasury's scrutiny is becoming more stringent. This includes greater notification requirements, visibility of indirect association and upstream foreign ownership, lower thresholds for anti-avoidant conduct. The Treasurer's existing ability to use the call-in and last resort powers will become subject to lower thresholds.

What will this mean for you?

These changes signal a clear shift in Treasury's approach to foreign investment in Australia, and a move to transform the regime from a blunt object to a more precise instrument that is able to respond to movements in the international landscape and target industries for greater scrutiny and protection, as well as to identify and respond strongly to instances of non-compliance with the FATA.

Foreign investors should be mindful of these potential ongoing changes and their impact on ongoing or intended investments in Australia over the next 12-24 months. Specific details of the legislative reforms to give effect to the proposed changes summarised below are still forthcoming, and will have a significant impact on how these measures play out in practice. We will continue to monitor developments and provide updates as details emerge.

Streamlining: What will get easier?

Exemption Certificates: Foreign investors will now be able to apply for Exemption Certificates (ECs) that switch off certain legislative concepts, including:

• FGI or foreign person status;

• associate rules; and

• statutory reporting obligations.

Eligibility for these kinds of ECs will be determined with reference to the character, compliance history, and risk profile of the investor, the investor's governance arrangements, and the proposed scope of investments. These ECs will likely be subject to a significantly higher fee than for ordinary ECs or standalone approvals.

Low-risk foreign investments: The following kinds of transactions will be exempted from mandatory approval requirements as "notifiable actions" under the FATA, subject to no change of control occurring or the following occurring:

• small percentage increases above the existing direct or substantial interest thresholds;

• increases in interests in securities with no change in percentage interest;

• land subdivisions or amalgamations where there is no change of ownership; and

• acquisitions of Australian Carbon Credit Units.

Existing exemptions for professional trustees and intergroup company funding will also be expanded.

Tracing: The tracing provisions are to be amended to home in on capturing only upstream interests that have a material indirect interest or control in the downstream Australian-connected entity, and to allow for screening where an upstream entity materially increases control by acquiring interests directly despite earlier screening due to tracing.

Changes to No Objection Notifications: No Objection Notifications (NONs) will now be issued with an initial validity period of 24 months (increased from 12 months). Ability to vary the content of, and conditions to, NONs will also be streamlined, and incorporation of non-legislative standards (eg., Standards Australia) in the conditions will be permitted.

Register of Foreign Ownership of Australian Assets: Acquisitions of interests in commercial land, businesses or entities will no longer require notification to the Register of Foreign Ownership of Australian Assets, and instead will be reported directly to Treasury via the Foreign Investment Portal.

Reporting to the Register will remain for foreign acquisitions of water interests, agricultural land, residential land and certain mining tenements.

Conditions: Treasury will commence its review of conditions on existing approvals to update or remove ineffective conditions that overlap with other regulatory regimes or whose reporting burden far outweighs their value, with an initial focus on tax conditions.

Strengthening: What will get harder?

Conditions: The Treasurer's ability to impose conditions in NONs and ECs will be expanded, to include conditions that require an investor to do or not do something before, when, or after the investment is made. The Treasurer will also be able to accept statutory undertakings from applicants or third parties to mitigate risks where conditions are otherwise unworkable commercially.

Order and directions: The Treasurer will be able to issue more targeted orders and directions – for example, disposal orders that exclude particular entities from acquiring disposed interests, and prohibition orders that take effect more quickly in high-risk situations.

New approval requirements for sensitive sectors: The Treasurer will be empowered to adjust mandatory notification requirements in sensitive sectors in response to emerging risks, and the scope of mandatory notification requirements for investments in current and emerging sensitive sectors will be expanded.

Tenements: Mandatory notifications requirements for acquisitions of mining tenements will be expanded.

Last resort power: Use of the last resort power will be subject to a lower threshold where the Treasurer seeks to impose new conditions or prohibit or partially unwind an action. The existing threshold will be maintained for disposal orders.

Call-in power: The call-in power will be extended to also cover "notifiable actions" in addition to "significant actions" or "reviewable national security actions"

Associates: The definition of "associate" will be expanded to include additional roles capable of exercising influence, including direct interest holders and creditors that may exercise influence.

Control: Commercial arrangements that impose foreign control without ownership (eg., offtake agreements and lending arrangements), are to become subject to the regime and the call-in power (on national security grounds).

Protected information: Protections around sharing of foreign investors protected information will be reduced, to support inter-departmental and agency consultations as well as consultation with non-government third parties (eg., financial institutions and legal advisers). Limited public sharing of certain protected information by Treasury will also become permitted.

Penalties: Penalties for anti-avoidance will be strengthened and the provisions themselves will become more broadly applicable, in line with other modern anti-avoidance frameworks. The range of contraventions to which infringement notices can apply will be expanded.

Statutory timeframes: ECs are no longer to be subject to the standard 30-day statutory deadline. The Christmas/New Year shutdown period will also be excluded when calculating statutory deadlines going forward.