COVID-19: temporary changes to FIRB notifications and foreign investment

By Conrad Smith

In a major development for the flow of foreign investment into Australia, all proposed foreign investments must now be notified to the Foreign Investment Review Board (FIRB) and receive a statement of no objection before they can proceed.

This is a temporary change intended to remain in place for the duration of the COVID-19 crisis, and comes as the Federal Government seeks to protect distressed Australian assets from the economic fallout of the coronavirus pandemic.

This change to Australia’s foreign investment framework means that all proposed acquisitions of, or investments in, Australian land, assets or businesses by those classed as ‘foreign persons’ (being foreign governments and their related entities (which include state-owned enterprises), foreign-controlled corporations and trusts, and individuals not ordinarily resident in Australia) will be subject to scrutiny by the FIRB regardless of the value or nature of the investment.

To accommodate this increased scrutiny, and the inevitable growth in the FIRB’s workload, the timeframe in which the FIRB will have to consider each notification will be increased from 30 days to six months, with urgent applications for investments that protect and support Australian business and Australian jobs being given priority.