The Foreign Investment Review Board (FIRB) prevents the foreign acquisitions of land, which are not considered within the national interest. To achieve this the FIRB require an open and transparent sale process where agricultural land is purchased by foreign investors. This is referred to as the Sale Process Requirement.
Most foreign investors seeking to purchase Australian agricultural land need FIRB approval in order to acquire their interest and therefore, must comply with the relevant requirements. The FIRB has reviewed their guidelines for how the Sale Process Requirement can be satisfied. Under the revised guidelines, the Sale Process Requirement only applies to agricultural land purchased with intended primary production or residential land uses. Furthermore, it applies only to freehold interests and the requirement can be satisfied by any sales process so long as there was a level of opportunity for Australian participation in the sale, which is equivalent to the specifications in the guidance notes.
Foreign investors need to ensure that they comply with the requirements, unless an exemption applies. Exemptions may exist where the acquisition enables substantial Australian participation for reasons such as the foreign entity being listed on the Australia Securities Exchange or being majority Australian controlled. Exemption certificates can also be granted under certain criteria for foreign entities intending to make several acquisitions.
Vendors should be aware of the FIRB Sale Process Requirement, as well as the scope for exemptions to apply, which could save time in the acquisition process. If you need more information please contact M+E.
