Guide to regulation of inbound investment in Australia

All foreign persons must notify the Australian government (via FIRB) prior to proceeding with any of the following non-land proposals:

Non-free trade agreement partner investors

• A foreign person makes an acquisition resulting in them holding an interest of 20% or more in an Australian corporation or trust, where the total assets of the target are valued at or above $347 million in 2026.
• The acquisition by a foreign person of a direct interest (which is generally 10% but may be less if the acquirer also has the ability to exert a certain influence or control over the target) in an Australian agribusiness where the total of the consideration for the acquisition together with the total value of the other interests held by the person (and their associates) in the entity or business or previously acquired from the entity or business is more than $75 million in 2026.

Free trade agreement partner investors

• A foreign person from a Free trade agreement partner country^[1] makes an acquisition resulting in them holding an interest of 20% or more in an Australian corporation or trust, where the total assets of the target are valued at or above $1,498 million in 2026.
• A foreign person from a Free trade agreement partner country makes an acquisition resulting in them holding an interest of 20% or more in an Australian corporation or trust which operates in a prescribed ‘sensitive sector’ (such as defence, telecommunications or transport), where the total assets of the target are valued at or above $347 million in 2026. Media sector businesses have a notification threshold of $0.
• Private investors from Chile, New Zealand and the United States only need to notify FIRB prior to the investment in an Australian Agribusiness and do not require approval (unless it constitutes some other kind of significant action).
• A foreign person from India that makes an acquisition resulting in them holding an interest of 20% or more in an Australian corporation or trust, or business which is not sensitive and supplies a service through a commercial presence in Australia where the total asset value, or earnings in the most recent financial year, of the target exceed $560 million.

All monetary thresholds are indexed annually on 1 January.

All foreign persons must notify the Australian government (via FIRB) prior to acquiring an interest in Australian land where the acquisition will exceed the relevant notification threshold.

For the purpose of Australia’s foreign investment regime, Australian land is divided into four separate categories, being:

• Agricultural land: land that is or could reasonably be used for a primary production business;
• Residential land: land on which there is least one dwelling or the number of dwellings that could reasonably be built on land is <10;
• Commercial land: all other land; and
• Mining or production tenements

The relevant notification thresholds are as follows:

• Developed commercial – AU$347m#
• Developed commercial sensitive – AU$75m◆॰
• Foreign government investor – AU$0m
• Vacant, Residential, ^Mining/production tenements – AU$0m
• Agricultural – AU$15m*^~

Both direct and indirect (shares or units in a landholding entity) acquisitions of an interest in land need to be notified to FIRB.

Key

^#Investors from Free-Trade Agreement countries (Canada, Chile, China, Japan, Mexico, New Zealand, Singapore, South Korea, United States, Hong Kong, Peru, Malaysia and Vietnam) have a higher threshold of $1,498 million.
♦  Investors from Free-Trade Agreement countries (except Hong Kong, Peru) have a higher threshold of $1,498 million).
^{^} Investors from Chile, New Zealand and United States, $1,498 million for mining/production tenement and agricultural land
* Cumulative threshold
~ Investors from Thailand acquiring agricultural land used wholly and exclusively for primary production have a threshold of $50 million.
° Investors from India acquiring non-sensitive developed commercial land that will be used primarily for the supply of a service through the investor's commercial presence in Australia have a high threshold of $560 million. 

All acquisitions which constitute a national security action must be notified to FIRB before they are taken, regardless of value.

An action is a notifiable national security action if the action is taken, or proposed to be taken, by a foreign person and the action is any of the following to:

• start a national security business;
• acquire a direct interest in a national security business;
• acquire a direct interest in an entity that carries on a national security business;
• acquire an interest in Australian land that, at the time of acquisition, is national security land; or
• acquire a legal or equitable interest in an exploration tenement in respect of Australian land that, at the time of acquisition, is national security land.

Broadly, national security businesses are endeavours designated by statute that if disrupted or carried out in a particular way may create national security risks for Australia, while national security land includes land owned or occupied by Australia’s Defence services or in which the national intelligence community has an interest.

In addition to the requirements for non-government foreign investors (which are generally also applicable to foreign government investors), investors in which a foreign government has an interest must notify the FIRB and get prior approval before making certain investments in Australia, regardless of the value of the investment. The following are notifiable and significant actions for foreign government investors:

• acquiring a direct interest in an Australian entity or Australian business
• starting an Australian business
• acquiring an interest in Australian land
• acquiring a legal or equitable interest in a mining, production or exploration tenement (this applies irrespective of the duration of the tenement) and
• acquiring an interest of at least 10% in securities in a mining, production or exploration entity.

Before a foreign person makes an acquisition that is subject to Australia’s foreign investments regime, they must notify FIRB. Failure to do so may result in substantial fines or imprisonment for the acquirer (and in the case of a corporate acquirer – its directors) and, where the un-approved acquisition is deemed to be contrary to the Australian national interest, a divestiture order may be issued to the acquirer.

A fee, based on the nature and value of the proposed acquisition, must be paid to FIRB prior to the commencement of FIRB’s consideration of the proposal.

Upon receipt of a notification, FIRB will have 30 days in which to decide whether or not to prohibit the acquisition, the only grounds for prohibition being that the acquisition is considered to be contrary to Australia’s national interest. The 30 day period can be extended by up to 90 days if additional time for review is required.

In reviewing an application, FIRB may consult other Australian government agencies and departments, including the Australian Securities & Investments Commission, Australian Competition and Consumer Commission and Australian Taxation Office.

FIRB may give its consent to an acquisition with or without conditions (eg construction on acquired vacant land or land for redevelopment to commence within 24 months). A FIRB decision cannot be reviewed or appealed.

In assessing what is in the national interest, FIRB seeks to weigh potential national sensitivities against the benefits of foreign investment. Because national sensitivities change and evolve over time, what is or isn’t within Australia’s national interest (or rather, how FIRB will view that interest) at any point in time is not always easy to predict.

Australia’s Foreign Investment Policy (which is maintained by FIRB) does however set out a list of factors which FIRB will consider when assessing each foreign investment proposal. These national interest factors include:

• National security;
• Competition;
• Other Australian Government policies;
• Impact on the economy and the community; and
• Character of the investor.

How the 'National Interest' test is applied will depend upon the facts of each proposal and the Australian policy environment at the time.