Australia Changes Foreign Investment Review Threshold
Australia has long been a favoured region for foreign investment with a stable legal and political system, a strong growing economy, the world’s largest producer of gold, iron ore and uranium, a major global producer of agricultural commodities, the sixth largest pool of investment funds under management, a highly educated workforce and proximity to developing South East Asian countries.
Australia has achieved global success in developing and commercialising new disruptive technologies in a range of sectors, including agriculture, education, financial services and healthcare.
In a move to protect the national interests of Australia during these extraordinary economic circumstances, the Australian government has temporarily reduced the foreign investment threshold to $nil. That is, all foreign investors as identified within the Foreign Acquisitions and Takeovers Act 1975 must first make application to the Foreign Investment Review Board.
- $nil threshold effective from 30 March 2020
- all foreign investments regardless of value in Australian assets including businesses and property must make application to FIRB. There is no carve out for treaty countries such as the USA and China
- the review response timeframe has been increased from 30 days to up to 6 months
- a proposal must receive a statement of no objection to proceed
- urgent foreign investments applications for investments that protect and support Australian business and Australian jobs will be given priority.
The Australian Treasury highlighted that Australia welcomes foreign investment as vital to its long-term economic success and stability. For now, the Government says it will be prioritising applications that directly protect and support Australian business and employment.