Australia

Introduction

Foreign direct investment in Australia is regulated by the Foreign Acquisitions and Takeovers Act 1975 (the Act) and the Foreign Acquisitions and Takeovers Fees Impositions Act 2015 (the Fees Imposition Act), along with their associated regulations. Under the Act, foreign investors must notify the Treasurer of proposed investments in Australia if they meet certain criteria.  In other cases, proposed investments may be voluntarily notified to the Treasurer.  Such proposed investments are assessed by the Foreign Investment Review Board (FIRB), a non-statutory body that advises the Treasurer.

Notification Requirement

The Act differentiates between foreign investments that: 

• must be notified to the Treasurer and FIRB, being investments that are either:
  • both a “notifiable action” and a “significant action”; or
  • a “notifiable national security action”; and
• may be notified to the Treasurer and FIRB, being investments that are either: 
  • a “significant action”; or  
  • a “reviewable national security action”.

A “foreign investor” can be an individual, business, corporation, partnership, trustee of trusts (and other entities) where a person does not ordinarily reside in Australia, or a foreign governments investing in land, entities or businesses in Australia. “Ordinary residence” is characterised by being in Australia for 200 or more days of the preceding 12-month period without being subject to limitation, e.g. a temporary work visa would not suffice. 

“Notifiable actions” are those that acquire a direct interest in an Australian entity or Australian business that is an agribusiness; acquire a substantial interest in an Australian business; or acquire an interest in Australian land. 

A “significant action” is an action to acquire interests in securities, assets or Australian land, or other investment actions relating to Australian corporations, unit trusts and businesses. Whether or not an action is deemed “significant” varies depending on the type of action and the particular circumstances.  Specifically, significant actions require (i) a change of control for entities or an Australian business, and (ii) a certain monetary threshold to be met. “Notifiable national security actions” are actions that involve:

• Starting a national security business;
• Acquiring a direct interest in a national security business or an entity that carries on a national security business; and
• Acquiring an interest in national security land.

A “national security business” is broadly defined as one involved in or connected with a “critical infrastructure asset”, telecommunications, defence or a national intelligence community (of either Australia or a foreign country), or their supply chains. 

Monetary thresholds 

An investment will not be notifiable if the relevant monetary theshold has not been met.  Different types of investments attract different thresholds with some investments, such as those in national security businesses, Australian media businesses, and those made by foreign government investors, having a $0 threshold.  Subject to limited exceptions, the monetary thresholds are indexed annually on 1 January.

Decision timeframes

The Treasurer has 30 days to consider and make a decision in relation to an application. It is important to note that the clock does not start running until the correct fee has been paid in full. Further, the Treasurer is also able to unilaterally extend the decision period by up to 90 calendar days on written notice.

Powers of the Treasury

The Treasurer has broad powers under the Act to ensure that foreign investments are not contrary to Australia’s national interest.  One such power is the Treasurer’s ability to ‘call in’ an application for review, if the Treasurer considers that the action may pose a national security concern. However, the Treasurer cannot call in a transaction if it was previously notified to the Treasurer, or if a person was given a no objection notification or exemption certificate in relation to the action.  As a result, foreign investors regularly elect to voluntarily notify their proposed investments to the Treasurer in order to mitigate future risk. 

Although subject to certain requirements, the Treasurer is able to make divestment orders and unilaterally impose new conditions or vary existing conditions after FIRB approval has been granted.

Recent developments in Australia

In May 2024, the Australian Govermnent announced reforms to improve Australia’s FDI regime by making it stronger, more streamlined and more transparent through a risk-based approach. The reforms include:

• A streamlined process for  faster approval of "lower-risk" investments in non-sensitive sectors by investors known to the FIRB, with a strong track record of compliance. Sectors considered not to be sensitive include manufacturing, professional services, commercial real estate, new housing and mining of non-critical minerals.
• Greater resources and stronger scruitiny of foreign investments in sensitive sectors, including critical infrastructure, minderal, technology, proximity to sensitive Government facilities and sensitive data sets.
• The new FIRB Portal through which FIRB applications are submitted and processed subject to updated administrative components such as digital identify verification and future compliance reporting. 

In February 2025, the Government announced a ban of foreign purchases of established dwellings from 1 April 2025, until at least 31 March 2027 in an attempt to address challenges in the housing market.  This measure is intended to discourage land banking by foreign investors to help ensure that foreign investment in housing is in the national interest.

In July 2025, the transitional period for the new mandatory merger control regime commenced.  The FIRB and the ACCC will continue to coordinate on their decisions for acquisitions that are subject to review under both regimes. This includes referrals by the FIRB to the ACCC even if the acquisition does not meet the thresholds requiring notification to the ACCC.