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All proposed foreign investments into Australia subject to the Foreign Acquisitions and Takeovers Act 1975 (Cth) (FIRB Act) now require approval of the Foreign Investment Review Board (FIRB) – regardless of the value or nature of the investor.
This change came into force from 10:30pm AEDT on 29 March 2020 and will reduce existing screening thresholds to zero dollars for all foreign investments that are required to be reviewed under the FIRB Act.
These changes will require investors who previously were only required to seek FIRB approval if their acquisition or investment exceeded certain pre-determined thresholds to now seek approval for all investments or acquisitions.
The changes are not permanent and will only remain in force while the COVID-19 pandemic remains unresolved.
To ensure FIRB has sufficient time to screen applications, it will contact investors and ask investors to request that the decision period for their foreign investment application involving significant actions and/or exemption certificates be extended from 30 days to up to six months from the date that their application fee is paid.
Seeking an extension to the statutory deadline for FIRB review does not, however, mean that the application will take the full six months to process.
In response to concerns that the increased amount of applications will cause significant delays, the Australian Government has indicated that FIRB will prioritise urgent applications for investments that directly protect and support Australian businesses and Australian jobs, taking account of any commercial deadlines related to those proposed investments.
It is important to note that the changes do not mean a freeze on foreign investment into Australia.
The above content is commentary rather than legal advice and was prepared on the basis of applicable legislation, government programs and initiatives that were in place as of the date of publication. Given the ongoing evolution of both the COVID-19 pandemic and frequent consequential changes to the various laws and programs within all Australian states and territories, readers should seek legal advice on the current situation as applicable to their specific circumstances before taking any action in relation to the above.
Further information / assistance regarding the issues raised in this article is available from the authors, Tina van Epen – Partner and Emily Gagliardi – Lawyer or your usual contact at Moray & Agnew.
Tina van Epen