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11 Feb 14
Foreign Investment Review Board Summary

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Inbound investment in Australia is regulated by the Foreign Investment Review Board (FIRB) which determines whether or not to allow certain foreign acquisitions of interests in Australian companies, assets or businesses.  Acquisitions will be prohibited if they are found to be contrary to the Australian national interest.

Foreign investment in Australia
Obtaining FIRB approval for foreign investment is a threshold issue for proposed transactions.

Whether you operate a local business and are seeking investment from overseas, or are a foreign investor looking to acquire an interest in an Australian business, company or assets, an understanding of FIRB notification and approval requirements is vital.

Failure to obtain FIRB approval when required could have significant consequences for investors, as well as the company or business in which the investment is made.

Approval requirements
The following acquisitions must be notified to FIRB, irrespective of the value of the asset or the nationality of the investor:

  • all vacant land (with thresholds applicable to farm land)
  • all residential real estate (some exemptions apply)
  • all shares or units in Australian urban land corporations or trust estates (some exemptions apply)
  • all investments of 5% or more in the media sector, and
  • all ‘direct investments’ by foreign government investors, and proposals by them to establish new businesses in Australia or acquire interests in land. Investments no less favourably than investments from any other third state.

All other acquisitions (including acquisitions of substantial interests of shares in companies or units in trusts1 holding Australian assets, or direct acquisitions of the assets of an Australian business) should be notified if the target is valued at or above the applicable monetary threshold which is indexed annually.  The current monetary thresholds are set out in the table below.

Acquisition Type Monetary Threshold Monetary Threshold NZ and US Investors
Developed non-residential commercial real estate (where the property is not heritage listed) AU$54 million AU$1,078 million

A substantial interest in:

  • assets of a business
  • shares in an Australian or offshore corporation (other than an Australian urban land corporation) that holds Australian assets (either directly or indirectly), or
  • interests in a trust (other than an Australian urban land trust) holding Australian assets (direct or indirectly).
AU$248 million

AU$248 million (prescribed sensitive sectors)

AU$1,078 million (other sectors)


Foreign government investors
Irrespective of value, any ‘direct investment’ proposed by a foreign government investor must have the prior approval of FIRB.  Generally investment of 10% or more is a ‘direct investment’, however any investment by a foreign government investor must be notified to FIRB if the acquirer is building a strategic stake in the target, or can use that investment to influence or control the target.

Foreign government investors include:

  • a body politic of a foreign country;
  • entities in which governments, their agencies or related entities from a single foreign country have an aggregate interest (direct or indirect) of 15% or more
  • entities in which governments, their agencies or related entities from more than one foreign country have an aggregate interest (direct or indirect) of 40% or more, or
  • entities that are otherwise controlled by foreign governments, their agencies or related entities, and any associates, or could be controlled by them including as part of a controlling group.

The national interest test
Where FIRB approval is required, the application must address the following national interest considerations which form the assessment criteria utilised by FIRB in determining whether a proposal is contrary to the national interest:

  • National security - the extent to which investments affect Australia’s ability to protect its strategic security interests
  • Competition – whether a proposed investment may result in an investor gaining control over market pricing and production of a good or service in Australia
  • Other Australian Government Policies (including Tax) – the impact of a foreign investment proposal on Australian tax revenues and other Government policies.
  • Impact on the economy and the community – the impact of the investment on the general economy, including the impact of any plans to restructure an Australian enterprise following an acquisition; and
  • Character of the investor – the extent to which the investor operates on a transparent commercial basis and is subject to adequate and transparent regulation and supervision.

Our expertise and current experience means we understand these issues and will be able to ensure your application has the best chance of success.

Foreign government investors face even more strenuous FIRB notification and approval requirements.  We also have extensive experience advising and assisting these investors through the process to achieve the most advantageous results within the existing legal and policy framework.

We continue to stay at the forefront of developments and government policy so that we can advise our clients on the current law and policy, as well as the prospects for change that may impact on proposed investments.

Your success is important to us, so our advice is tailor-made and precise, outlining risks as well as benefits - so you can maximise every opportunity and be prepared for the next challenge.

Our expert FIRB legal team draws on expertise in resources, mergers and acquisitions, property, finance and taxation to provide practical FIRB advice and assistance.  We deal regularly with FIRB in gaining approval for foreign investment and this close contact provides us with a detailed understanding of how the complex rules and regulations are applied in practice.

  1. A substantial interest occurs when a single foreign person (and any associates) has 15% or more, or several foreign persons (and any associates) have 40% or more, of the issued shares, issued shares if all rights were converted, voting power, or potential voting power, of a corporation.  For a trust, a substantial interest relates to the beneficial interest in the income or capital of the trust estate.  Where the trustee has the power or discretion as to the distribution of the income or capital of the trust estate, each beneficiary is taken to hold a beneficial interest in the maximum percentage of income or capital that could be distributed to them.


Focus covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. Focus is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this publication. 

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