Under the Foreign Acquisitions and Takeovers Act 1975 (the
"FATA"), foreign investors acquiring investments in
Australia may require approval from the Foreign Investment Review
Board ("FIRB"). The compliance requirements and potential
delays are sometimes seen as disincentives to invest in
Earlier this week, the Treasurer announced changes that will
relax the relevant exemption thresholds applicable to acquisitions
of Australian businesses (including acquisition of shares). It is
believed that these changes may increase capital in-flows into
Entities dealing with or advising on merger and acquisition
transactions should take note of the proposed changes.
The proposed changes are set out in the table below:
Foreign Investor –Interest in an Australian
$100 million (not indexed).
The four lowest thresholds for private business investment will
be replaced with a single threshold of 15 per cent in a business
worth $219 million. This means private foreign investment in
Australian businesses below $219 million can proceed without
The threshold will be indexed on 1 January each year.
Foreign Investor – Offshore Takeover
$200 million (not indexed).
US investors only - Sensitive sector acquisition
$110 million (indexed).
US Investors only – Offshore Takeover
$219 million (indexed).
US Investors only – Interest in an Australian
$953 million (indexed).
A threshold of $953 million for investments in non-sensitive
sectors will apply (indexed on 1 January each year).
Foreign Investor – establishing a new business
$10 million (not indexed).
Abolished. This will hopefully expedite the establishment of
new businesses in Australia to drive jobs and economic growth.
Please note that there are existing thresholds that apply to
acquisitions of commercial non-residential real estate properties
which will continue to apply. There are also existing restrictions
applicable to acquisition of residential properties.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
The income tax treatment of any property lease incentive will vary, depending on the nature of the inducement provided.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).