In response to the Covid-19 Pandemic, the Australian Government has imposed increased requirements on Foreign investments into Australia on 21 or 29 March 2020. However, new unexpected changes to the Foreign Investments Review Board were implemented beginning 1 January 2021 which lifted the previous restrictions, reverting to pre-covid situations and more.
These changes will make it easier for foreign investors to invest in Australia, and we have summarised the important aspects of the changes below:
In 2020, the Australian government temporarily reduced notification thresholds for commercial acquisitions to $0 due to Covid-19. All foreign investments and purchases will be required to obtain FIRB approval, creating lengthy delays with approval timeframes extended up to 6 months. In the unstable economy, the government intended to provide appropriate oversight over all proposed foreign investments to protect and support Australian businesses and Australian jobs.
Starting 1 January 2021, the notification thresholds for commercial acquisitions prior to the Covid-19 amendments have been reinstated and investors NO LONGER need to obtain approvals for commercial acquisitions below the notification threshold. This benefits foreign small business owners and commercial property investors, who will not need to obtain FIRB approval prior to their investments which, saving valuable time and costs.
This shows that the Government wants to increase the amount of foreign investments into Australia and are optimistic that Australia is still an attractive investment destination. Having more investments into Australia will help boost the economy after the pandemic and create more jobs for the local community while injecting more money back into the economy.
Under the new changes, the FIRB also has increased powers regarding National Interests. A mandatory FIRB approval will be needed if the acquisition involves a notifiable national security action, and the FIRB are also able to impose new conditions or vary present conditions even after FIRB approval in certain situations.
Conclusion
With the announcement of Covid vaccinations being available to Australians soon, the country is on its way to recovery from the pandemic. Through the recent changes to the FIRB approvals, the Government is encouraging more foreign investments to kick-start the economy’s growth.
This is a good time for Foreign Investors to take advantage of the reinstated thresholds to invest in Australian land and businesses efficiently and effectively. However, Investors will also need to be aware if their acquisitions are related to national security, as these investments may be imposed with further requirements. Despite the current unpredictable pandemic situation, Foreign Investors can remain positive that the Australian Government will continue to welcome foreign investments and may even introduce further measures to stimulate further investment activities.
If you have any queries regarding FIRB approvals, please do not hesitate to contact us at any time at 02 9267 4988 or Vincent.hui@sunlaws.com.
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