A “foreign person” is required to apply for Foreign Investment Review Board (FIRB) approval before investing in an entity, business or land in Australia. FIRB approval is legally required for certain transactions (‘notifiable actions’) and recommended for others (‘significant actions’) to avoid the treasurer prohibiting the transaction for being contrary to the national interest. The FIRB regime is set out in a combination of legislation including the Foreign Acquisitions and Takeovers Act 1975 (Cth) (‘FATA Act’). The FATA Act sets out the complex test for what classifies a person or entity as a “foreign person.” For the purposes of the FIRB approval scheme, “foreign persons” include individuals who do not ordinarily reside in Australia and entities where a foreign holder holds a 20% or greater interest, amongst others. Further, there are an array of special rules which alter the general requirements for FIRB approval in certain circumstances, for example transactions relating to the agricultural sector.
Applications for FIRB approval carry a fee and must be made in writing and submitted online. Following payment, the treasurer has 30 calendar days to make their decision and a further 10 calendar days to communicate it to the applicant. The extensive rules governing the FIRB approval process mean that each application requires careful analysis on a case-by-case basis. Contact M + E for further information and assistance in relation to Australia’s foreign acquisition regime.