Focus on: Foreign investment

Focus on: Foreign Investment

1 May 2020

Significant proposed foreign investment in Australia has long been subject to assessment to decide if it is contrary to the Treasurer’s view of the ‘national interest’. In response to the economic implications and pressures arising from the spread of coronavirus, the Federal Government has moved to temporarily tighten the nation’s foreign investment screening process.

Under the changes announced by Treasurer Josh Frydenberg in late March, the monetary screening threshold for all inbound investment has been temporarily reduced to zero dollars. This effectively means that the Foreign Investment Review Board (FIRB) will now consider all foreign investment proposals on a case-by-case basis, regardless of value or the nature of the investor. A further key element of the announcement is the extension of timeframes for review of applications from 30 days to six months, but with prioritisation of urgent applications that support Australian businesses and jobs. The measures will apply for the duration of the pandemic, and there is no fixed end date.

While there continues to be broad support for the critical role of foreign capital in economic development, Treasurer Frydenberg said the temporary measures will help to “safeguard the national interest” during a time when there is heightened concern over the potential sale of distressed Australian businesses to foreign entities. He insisted the changes were not an “investment freeze” and acknowledged foreign investment will play an important part in helping many businesses navigate and recover from the impacts of COVID-19.

Australia’s foreign investment approval process is fundamentally not a ‘technical’ process; an absolute discretion resides with the Treasurer and it is therefore a political decision. Over recent years, the level of sensitivity around foreign acquisition in certain areas of the economy has increased significantly, notably in agribusiness, critical infrastructure and data-rich businesses. While this has coincided with the economic expansion of China, Australia’s largest trading partner, it has not been limited to Chinese investors. Treasurer Frydenberg has insisted the recent changes to the foreign investment framework were not aimed at any one country, despite the backcloth of recent tensions with China.

Detailed FIRB guidance can be found here.

Les Timar is the CEO and a Founding Partner of GRACosway. As one of Australia’s most experienced public affairs practitioners, Les has worked extensively over the last 20 years with acquirers, vendors and their advisers on foreign investment regulatory approvals.

For further information on foreign investment in Australia, please contact Les on +61 411 531 731 or Contact Us


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