From 10:30pm AEDT on Sunday, 29 March 2020 (Effective Time), the threshold amounts which determine whether Foreign Investment Review Board (FIRB) approval is required for particular investments by foreign persons in Australia have been reduced to $0 for agreements entered into after the Effective Time.

Prior to this, a range of acquisitions by foreign persons such as private acquisitions in Australian media businesses, residential land proposals, mining and production tenements, and vacant commercial land proposals were already subject to $0 threshold rules and required FIRB approval.

The temporary changes mean that FIRB approval is now also required for transactions for the acquisition of developed commercial property or businesses with a value of less than $275 million.

Application processing time

As a part of the temporary changes, the FIRB has extended the time within which applications will be reviewed to 6 months. Previously, the review period was 30 days.

Importantly, the processing of applications and investments that protect and support Australian businesses and jobs will be prioritised by the FIRB.

Further, residential real estate applications are usually processed within 30 days and the FIRB does not expect the processing time for these applications to be delayed.

Application Fees

It is unclear how the application fees will be charged for the additional categories of foreign investment transactions that will be subject to the FIRB regime.

It was previously announced that the FIRB will consider refunding application fees that have already been paid in circumstances where the applicant decides to delay or defer their investments, as a result of economic conditions associated with the COVID-19 pandemic.

Pre-existing Exemption Certificate

Exemption certificates that were granted prior to the Effective Time (Pre-existing Certificates) will remain valid provided that the holder continues to satisfy all of the terms and conditions attached to those Pre-existing Certificates. Additionally, holders of Pre-existing Certificates are able to apply to vary or amend the terms and conditions attached to those Pre-existing Certificates.

In light of these changes, we recommend that all foreign investors ensure that they are familiar with the foreign investment framework, including the temporary changes, and lodge their FIRB applications as soon as possible.

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.