The Government will amend Australia’s foreign investment framework to reduce the regulatory burden faced by foreign investors
Unlisted land rich entities
Foreign investors acquiring securities in unlisted Australian land-rich entities (i.e. entities that hold interests in Australian land with a value of greater than 50% of the value of the entity’s gross assets) will no longer be required to obtain approval from the Foreign Investment Review Board (“FIRB”) where the foreign investor’s acquisition results in their holding an interest of less than 10% in that entity. Previously, the threshold for the reduced regulatory burden was an interest of less than 5% and aligns with the thresholds applicable for investments in listed Australian land-rich entities. This amendment is due to commence for acquisitions made on or after 1 April 2022.
This will provide increased access to foreign capital for Australian businesses and Australian landholders.
Acquisition of interests in securities where the proportionate ownership will not increase
Additional approval will no longer be required from FIRB for foreign investments where the investor’s percentage interest does not increase due to the additional investment. For example, a person’s proportionate share or unit holding will not increase as a result of a capitalisation of a wholly-owned subsidiary (as it remains at 100%). This amendment is due to commence for acquisitions made on or after 1 April 2022.