Effective from July 1, 2023, the Foreign Investment Review Board (FIRB) will introduce significant changes that will impact foreign investment activities for businesses.
These changes include streamlining the investment review process, reducing regulatory burdens, and strengthening the national security review framework.
Below we outline some key changes and their relevant implications:
- Register of Foreign Ownership of Australian Assets: The new register, effective from July 1, 2023, will introduce additional reporting obligations for foreign investors alongside existing requirements, aiming to improve transparency and provide comprehensive data on foreign ownership in Australia.
- Streamlined Investment Review Process: The FIRB will implement reforms to simplify approval procedures, reduce red tape, and provide greater clarity for businesses considering foreign investments. These changes strike a balance between national security concerns and fostering economic growth.
- Reporting Obligations: Foreign investors will need to report specific events related to their interests in Australian assets, including acquisitions of land, mining tenements, water interests, and interests in entities or businesses. Compliance with these expanded reporting obligations is essential to avoid penalties.
- Online Reporting Platform: The Australian Taxation Office is developing an online reporting platform for foreign investors, expected to launch on June 26, 2023. This user-friendly platform will facilitate reporting and allow authorised third parties to submit notices on behalf of foreign investors.
- Monetary Threshold Adjustments: The FIRB will modify the monetary thresholds for mandatory approval of foreign investment proposals. Lower-risk transactions will experience reduced regulatory burdens, while higher-risk transactions may still require FIRB approval, even if they fall below the revised thresholds.
- Simplified Exemptions: The FIRB will introduce simplified exemptions for specific categories of transactions, enabling certain investments to proceed without FIRB approval. Businesses should review these exemptions carefully to ensure compliance with relevant regulations.
- National Security Review Framework: The government will strengthen the national security review framework for critical infrastructure assets and sectors, such as telecommunications, energy, and defence-related industries. Businesses operating in these sectors should engage with relevant authorities to ensure compliance and navigate potential challenges.
Nexia Edwards Marshall recognises the importance of these changes and is here to provide support to ensure the success of your foreign investment endeavours.
Contact your local Nexia Edwards Marshall Advisor today to discuss how these changes may impact you.