Investing in Australia – What you need to know
Foreign Investment Review Board
As a result of the Covid-19 pandemic at the end of March 2020 the Australian government announced significant changes to the Foreign Investment Review Board (FIRB) regime.
From 29 March 2020 to 1 January 2021, all monetary thresholds for previous exemptions to seek FIRB approval for foreign investment have been reduced to $0 for all countries and all types of investment. The concern apparently is that economic restrictions and the resulting downturn may result in distressed assets and businesses looking to sell at discounted prices to cashed up foreign interests. This is considered to not be in Australia’s national interest under the current circumstances.
Now a foreign person requires FIRB approval before:
- optioning or contracting for any interest in land in Australia;
- entering into a commercial lease of five years or more; and
- acquiring an interest of 20% or more of the shares in any Australian company.
Certain Exemptions remain
Acquisitions in Australian companies and businesses of less than 20%, provided no Australian land is held, remain exempt.
Applications that protect and support Australian business and Australian jobs are to be given priority.
Time frames have been extended from 30 days to 6 months so any contracts subject to FIRB approval need to allow a reasonable time with a right to extend up to 6 months.
On 5 June 2020 the Australian government announced these new rules will cease on 1 January 2021 and in the meantime new laws are intended to be passed to commence on 1 January 2021, proposing a new national security test for sensitive businesses. Sensitive businesses have been flagged as those which have access to data critical to Australia’s national security and defence.
The Foreign Acquisitions and Takeovers Act 1975 and the FIRB Policy are complex laws and the changes will mean it is critical to get the right advice where foreign aspects are contemplated in business or land transactions.
McLaughlins Lawyers have advised local and foreign businesses and individuals concerning foreign interests for over 60 years, are experienced and understand the times and changes so are able to help you plan investments and business ventures – Call one of our experienced solicitors today on (07) 5591 5099 and a member of our team will be happy to help.
McLaughlins Lawyers, your experienced Gold Coast lawyers, we stand beside you and are here to help you when you need us.
Author: Teresa Kearney & Sed Crest
Director: Ian Kennedy
Date: 18 June 2020