On 24 November, the changes to the Foreign Investment
Regime were passed by Parliament.
Australia's new foreign investment regime starts on
Tuesday 1 December – including the
introduction of application fees.
At this time the new Foreign Acquisitions and Takeovers Act and
the Foreign Acquisitions and Takeovers Fees Imposition and Register
of Foreign Ownership of Agricultural Land Bills are publicly
The regulations supporting the Foreign Acquisitions and
Takeovers Act (which includes a significant amount of detail
including thresholds and certain exceptions) are not yet publicly
WHAT ARE THE KEY CHANGES TO AUSTRALIA'S FOREIGN INVESTMENT
The key changes (described in more details below) include:
An increase to the 'substantial interest' screening
Significant changes to screening thresholds for acquisitions of
Introduction of an agribusiness screening threshold
Introduction of an agricultural land register
Foreign government investor screening provisions now becoming
Imposition of fees for almost every FIRB application.
OVERVIEW OF KEY CHANGES
Increase to 'substantial interest' screening
Foreign investors (other than foreign government investors) will
be permitted to acquire up to 20% of a company before foreign
investment approval is required.
Significant changes to screening thresholds for
acquisitions of agricultural land
Consistent with Australia's current Foreign Investment
Policy – foreign investment approval will be required for the
acquisition of agricultural land by a foreign person who already
holds at least $15 million worth of agricultural land, or which
will take their holding of agricultural land from below $15 million
to above $15 million, now requires FIRB approval.
Introduction of an agribusiness screening
Foreign persons now require FIRB approval to acquire a direct
interest (generally 10% but less in certain circumstances) in an
agribusiness (the threshold is not yet available).
Agribusiness is defined broadly so that it captures primary
production businesses and certain first stage downstream
manufacturing businesses (including meat, poultry, seafood, dairy,
fruit and vegetable processing and sugar, grain and oil and fat
Introduction of an agricultural land
The ATO will maintain an agricultural land register to keep
track of foreign holdings in Australian agricultural land.
Acquisitions of all freehold interests, and leasehold interests
likely to exceed five years, in agricultural land by foreign
persons now need to be notified to the ATO through an online portal
on the ATO website within 30 days of acquisition completing / lease
The post-acquisition notification requirement applies regardless
of whether FIRB approval was required for the acquisition.
Subsequent changes to holdings also need to be notified to the ATO
(including ceasing to hold the interest in agricultural land, the
holder ceasing to be a foreign person or land ceasing to be
In addition to notifying future acquisitions of agricultural
land, all previous interests in agricultural land held by foreign
persons at 1 July 2015, or subsequently acquired up to 1 December
2015, need to be notified to the ATO by 31 December 2015 at the
Foreign government investor screening provisions now
The previous FIRB Policy requiring notification by 'foreign
government investors' to start an Australian business or to
make a direct investment in Australia will now be law.
What fees are required?
Fees of between $5,000 and $25,000 will apply to most FIRB
applications, with larger transactions attracting a fee of up to
$100,000. You can view a table of the new fees
Where multiple fees apply to a transaction, only the higher fee
Any FIRB applications lodged by 30 November 2015 (ie before the
commencement of the revised laws) will not attract a fee.
FIRB will only commence reviewing an application after the
correct fee has been paid.
This decision has implications for Government authorities and corporations, and for private sector project proponents.
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