Changes to Australia’s foreign investment framework became effective on 29 March 2020. If you are an interested party to transactions involving foreign investors, theses changes have the potential to impact you and your business. The main changes to foreign transactions include:
- No monetary threshold – this means that, regardless of the value of the transaction, all proposed foreign investments subject to the Foreign Acquisitions Takeovers Act 1975 will require approval.
- Increased Review Periods – the timeframe for reviewing existing and new applications has been extended from 30 days to 6 months. However, FIRB advises that they will prioritise urgent investments that support Australian businesses and jobs.
If you were party to an agreement that was entered into prior to 29 March 2020 but the acquisition has not occurred then insofar as the value of the transaction was below the threshold at the time of the agreement, the changes will not affect the acquisition. Furthermore, if the agreement already required FIRB approval, then it may take longer than initially expected for the application to be approved.
The Federal Treasurer has confirmed that these changes are only temporary and will remain in place for duration of the COVID-19 pandemic.