The Morrison Government has today passed legislation that gives effect to the most significant reforms to the Foreign Acquisitions and Takeovers Act 1975 in nearly 50 years.
The reforms, which will commence on 1 January 2021, ensure that our foreign investment framework keeps pace with emerging risks and global developments, including similar changes to foreign investment regimes in comparable countries.
The new provisions will strengthen Australia’s foreign investment regime and ensure we continue to realise the benefits of foreign investment. In particular, it will require foreign investors to:
- Seek approval for all investments in sensitive national security land or businesses (including starting such a business), regardless of value.
- Be subject to enhanced monitoring and investigation powers, as well as stronger and more flexible enforcement options and penalties.
- Continue to bear the costs of administering the foreign investment regime, under a reformed fee framework that will be fairer and simpler for foreign investors.
With effect from 1 January 2021, the current temporary $0 monetary screening thresholds that were introduced in response to the coronavirus will be removed. However, mandatory screening of investments in sensitive national security businesses will continue at the current $0 monetary threshold.
Australia will continue to welcome foreign investment for the significant benefits it provides but also ensure that investments are not contrary to the national interest.
While the temporary thresholds have enabled greater scrutiny of investments, Australia has remained an attractive destination for foreign investment. Foreign investment inflows have remained robust during the pandemic, supporting Australia’s economic recovery.
To assist investors with the transition to the new system, Treasury will shortly publish public guidance materials on the Foreign Investment Review Board website: www.firb.gov.au.