Summary
Details
- Australia
Notifiable actions above thresholds.
Notifiable national security actions (no monetary threshold).
Many transactions by foreign government investors.
Investors may voluntarily notify to obtain certainty where risk exists.
Certain internal reorganizations.
Some moneylending arrangements.
Limited exemptions under free trade agreements.
Passive portfolio investments below defined control thresholds.
However, even exempt transactions may be subject to Treasurer “call-in” powers if national security concerns arise.
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What’s Required
Australia’s foreign investment regime is a pre-approval and condition-based framework. Transactions within scope must not proceed until approval is granted, where notification is mandatory.
The core legal instruments include:
Foreign Acquisitions and Takeovers Act 1975 (FATA).
Foreign Acquisitions and Takeovers Regulation 2015.
Treasurer’s powers and FIRB administrative guidance.
Key compliance requirements are as follows:
1. Determine whether the investor is a “foreign person”
The framework applies to:
Foreign individuals
Foreign corporations
Trustees of foreign trusts
Foreign government investors (subject to stricter rules)
Australian subsidiaries of foreign-controlled entities may also be treated as foreign persons.
Ownership tracing and control thresholds must be carefully assessed.
2. Identify whether the transaction is a “notifiable action” or “notifiable national security action”
Mandatory notification applies to:
Acquisitions of substantial interests in Australian entities or businesses above monetary thresholds.
Acquisitions of Australian land (residential, commercial, agricultural).
Acquisitions in “national security businesses”.
Acquisitions of direct interests in critical infrastructure assets.
National security actions require notification regardless of value.
Thresholds vary depending on:
Investor nationality (free trade agreement partners have higher thresholds in some cases).
Asset class.
Whether the investor is a foreign government investor (often with a n zero threshold).
3. Obtain Treasurer approval before completion
Where notification is required:
The application must be lodged with the FIRB.
Statutory decision periods apply (subject to extension).
The Treasurer may approve, prohibit, or impose conditions.
Transactions cannot be completed before approval if mandatory.
4. Comply with approval conditions
Approvals commonly include conditions such as:
Governance requirements
Data security and cybersecurity controls
Restrictions on asset disposal
Reporting and audit obligations
Board composition requirements
Maintenance of Australian operations
Failure to comply with conditions is a breach of federal law.
5. Ongoing reporting and compliance
Foreign investors may be required to:
Submit periodic compliance reports.
Notify changes in ownership/control.
Maintain compliance with national security mitigation measures.
There is a dedicated compliance and enforcement unit within Treasury overseeing post-approval compliance.
Important Deadlines
FATA enacted: 1975 (in force, with significant amendments in the 2020 national security reforms)
Major reform effective: 1 January 2021 (enhanced national security review powers).
Statutory decision period: Typically 30 days, extendable.
Compliance reporting deadlines: As specified in approval conditions.
Applications must be lodged and approval granted before completion of notifiable actions.
Current Status
In force and actively enforced.
Post-2021 reforms strengthened the Treasurer’s “call-in” and “last resort” powers.
National security screening has expanded in scope and intensity, particularly for energy, data, infrastructure, defence-related supply chains, and critical minerals.
Enforcement activity and monitoring have increased significantly in recent years.
Penalties for Non-Compliance
Non-compliance can result in:
Civil penalties (significant monetary fines).
Criminal penalties (including imprisonment in serious cases).
Forced divestment orders.
Injunctions.
Daily penalties for continuing contraventions.
Voidable transactions.
Breach of approval conditions is separately enforceable.
The Treasurer also has “last resort powers” to vary or impose new conditions post-approval in national security contexts.
Examples of Known Violations
Common compliance failures include:
Completing a notifiable action before approval.
Incorrect threshold assessment.
Failure to trace foreign ownership properly.
Non-compliance with post-approval conditions.
Failure to notify changes in control.
Underestimating national security exposure in energy, critical minerals, or data infrastructure transactions.
In several cases, divestment orders have been issued for non-compliant acquisitions.
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