AUSTRALIAN UPDATE: Changes to Australia’s Foreign Investment Regime


  • A new foreign investment regulatory regime applies from 1 December 2015.
  • The ‘substantial interest’ threshold above foreign investors must notify Australia’s Foreign Investment Review Board (FIRB), has increased from 15% to 20%.
  • Specific rules now apply to foreign investments in the agricultural sector, following the introduction of the concepts of ‘agribusiness’ and ‘agricultural land’.
  • The rules applicable to investments by foreign governments, and real estate investments, have been clarified.
  • Tougher criminal penalties and a new set of civil penalties have been introduced for contraventions of the regime.
  • Foreign investors are now required to pay fees in relation to any FIRB application they make.

Main article

From the 1 December 2015, a new foreign investment regime came into force, marking a significant reform of Australia’s foreign investment legislative framework.

The new regime comprises of the Foreign Acquisitions and Takeovers Act 1975 (Cth), a new set of regulations, and the Register of Foreign Ownership of Agricultural Land Act 2015 (Cth).

The changes seek to ensure Australia’s national interest is maintained while also strengthening foreign investment in Australia.

Substantial interest threshold

Foreign persons who intend on acquiring a ‘substantial interest’ in an Australian entity (generally above $252 million) must notify the Foreign Investment Review Board (FIRB) and obtain approval for the acquisition.

Under the new regime, the substantial interest threshold has increased from 15% to 20%. This means that certain acquisitions which previously attracted the notification requirement may no longer do so.

Agricultural land and business

Regulatory scrutiny of foreign investment in the agricultural sector has increased under the new regime.


Direct private investments in an agribusiness attract a $55 million threshold (indexed annually). A higher threshold ($1094 million) applies for investors from countries who have free trade agreements with Australia, which comprises of the US, New Zealand and Chile.

An agribusiness is defined to include Australian entities or businesses which carry on certain primary production and downstream manufacturing businesses contained in the Australian and New Zealand Standard Industrial Classification Codes. These include meat, poultry, seafood, dairy, fruit and vegetable processing and sugar, grain and oil and fat manufacturing. At least 25% of the business’ revenue or assets must come from the carrying on of the prescribed businesses in order to meet the statutory definition.

Agricultural land

Agricultural land is defined as any land in Australia that is used, or could reasonably be used, for a primary production business.

Agricultural land is subject to a $15 million notification threshold and is assessed on a cumulative basis. Certain exceptions apply: investors from countries in free trade agreements with Australia (US, NZ and Chile) attract the $1094 million threshold, and investors from Singapore and Thailand are subject to a $50 million threshold only in relation to land used wholly or exclusively for a primary production business.

The new regime also establishes an agricultural land register which contains all information about foreign interests held in Australian agricultural land. While the register will not be publicly accessible, certain information will be made available to the public on a regular basis. Foreign investors with interests in Australian land must notify the register of their interest or any changes within 30 days.

Commercial land

Regulation of foreign investments in commercial land depends on whether the land is vacant or developed, and whether it constitutes sensitive commercial land.

All private foreign acquisitions of vacant commercial land require notification, regardless of the value of the investment. Acquisitions of $252 million or more in developed commercial land require notification, unless the interest relates to certain sensitive land, in which case a $55 million notification threshold applies.

Sensitive land is defined broadly, and may include land leased to the Commonwealth, land used for military or security purposes and land on which public infrastructure is located, such as an airport, or electricity networks or telecommunications.

A threshold of $1094 million for agreement country investors applies in relation to developed land regardless of whether it constitutes sensitive land. The relevant country investors includes Chilean, Chinese, Japanese, New Zealand, South Korean and United States investors.

Foreign government investors

Consistent with the previous regime, approval must be sought for most direct interests acquired in Australian land or business by a foreign government investor.

Under the new regime, a foreign government investor includes a foreign or separate government entity, as well as private entities in which a foreign or separate government entity holds a substantial interest (20%).

The regime also provides that all foreign government investors from the same country will be considered as associates, and their interests aggregated.


The new regime introduces tougher criminal penalties and new civil penalties for both individuals and companies. Now, criminal penalties for individuals have increased to $135 000 (or 3 years imprisonment). The new civil penalties include fines of up to $45 000 for individuals. For both criminal and civil contraventions the penalty for corporations is 5 times that for an individual.

Penalties are in addition to other powers, including divestiture orders.


The new regime imposes a set of fees onto foreign investors for all foreign investment applications. These fees are indexed and are determined by the value and type of investment. The fee must be paid before the Treasurer will take any action in regards to the application.

Some examples of common application fees include:

  • Vacant commercial land – $10,000,
  • Non-vacant commercial land – $25,000,
  • Private acquisition of an interest in a mining or production tenement – $25,000,
  • Foreign government investor to acquire an interest in a mining, production or exploration tenement, or a 10% interest in a mining, production or exploration entity – $10,000,
  • Acquiring an interest in an Australian entity, including an agribusiness, where the consideration does not exceed $1 billion – $25,000,

Acquiring an interest in an Australian entity or business, including an agribusiness, where the consideration exceeds $1 billion – $100,000.