Australia's foreign investment reforms: the second tranche is here
Insights20 May 2026
By Conrad Smith
Treasurer Jim Chalmers has unveiled the ‘second tranche’ of reforms to Australia's foreign investment framework.
The headline: from 1 January 2027, the Foreign Investment Review Board (FIRB) will be expected to decide on all low-risk investment applications within 30 days – a significant step up from the current target of processing just 50per cent within that timeframe.
This builds on the first tranche announced in May 2024, which introduced a risk-based approach, a new online portal, and streamlined assessments for trusted investors. As Dr Chalmers put it: the goal is a regime that is ‘stronger where risks are high and faster where risks are low’.
What's in the package?
The legislative amendments will:
- Expand exemption certificates to reduce regulatory burden on low-risk investments by frequent, trusted investors.
- Eliminate approval requirements for some low-risk transactions entirely.
- Remove ineffective conditions on existing foreign investment approvals.
- Streamline the Register of Foreign Ownership of Australian assets.
- Introduce more agile compliance and enforcement powers to respond to non-compliance and avoidance.
- Narrow, targeted increases to screening requirements to protect Australia's most sensitive sectors and businesses.
Why it matters
- The practical implications are twofold. On the streamlining side, repeat institutional investors – particularly those currently classified as ‘foreign government investors’ due to upstream sovereign ownership – should benefit from faster pathways and reduced paperwork. On the enforcement side, the expanded powers and potential new offences signal that structuring transactions to avoid FIRB notification requirements will carry materially greater legal and deal risk.
- For those advising on or undertaking cross-border transactions into Australia, this is a clear signal: the framework is being reshaped to reward compliant, repeat investors with speed – while raising the stakes for those who fall on the wrong side of the risk spectrum.
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