What needs Foreign Investment Review Board approval?
Significant changes to Australia’s foreign investment regime came into effect from 1 January 2021.
The main changes to Australia’s foreign investment laws from 1 January 2021 include:
- Some monetary thresholds for ‘notifiable actions’ and ‘significant actions’ are reinstated.
- Mandatory FIRB notification and approval requirements for the newly introduced ‘notifiable national security action’. This new category of action enables the testing of investments that may pose a national security risk. There is no monetary screening threshold.
- The acquisition of a direct interest in a national security business or an entity that carries on a national security business is now a notifiable national security action.
- Starting a national security business or acquiring an interest in national security land is a notifiable national security action.
The foreign investment legislation applies to investment proposals by a foreign person. The definition of foreign persons includes individuals, corporations, trustees, foreign governments or foreign government investors.
Any transaction dealing with assets and interests within Australian jurisdiction may be a notifiable action. It is important to check in each case whether FIRB approval is required. The rules are complex and McLaughlins Lawyers have experience in considering whether the rules apply.
The Treasurer may give exemption certificates for the acquisition of interests by foreign persons if it is not contrary to the national interest, as set out in section 43B of the Regulations. Multiple Exemption Certificates can obtained in the one application. An application can include several exemption certificate types, such as interest in land, and interest in business and entities, or interest in tenements, mining, production or exploration entities. In this instance, investors will need to specify whether it relates to interests in land, in businesses and entities, or in tenements, mining, production or exploration entities.
The reforms to Australia’s foreign investment regime have a significant focus on national security issues including critical infrastructure and sensitive businesses. Traditionally foreign persons only needed to notify the Treasurer of investment if it exceeded the monetary threshold, however the powers of the Treasurer have been expanded to strengthen compliance and protection of national security.
Apart from national security interests, a foreign person will only need to notify the Treasurer of their investment if it meets certain dollar thresholds. The threshold depends on the investor and the proposed action. The Treasurer makes determinations on a case-by-case basis whether the investment is against national security or national interest. These terms are not defined and are at the discretion of the Treasurer to make an assessment in consideration of all the circumstances.
If you are interested in investing in Australian assets, land, businesses or other interests please contact McLaughlins Lawyers at [email protected] so we can help you understand the current rules and protect your investment.
McLaughlins Lawyers, your experienced Gold Coast lawyers, we stand beside you and are here to help you navigate your investments in Australian Assets.
Author: Rebecca Baird, Teresa Kearney & Sed Crest
Director: Ian Kennedy
Date: 12 May 2021