Australia: 2013 FIRB policy changes at glance
2013 FIRB policy changes at glance
Australia's Foreign Investment Policy (Policy) provides guidance on approval requirements for foreigners who wish to invest in Australia. The Policy is to be read together with the Foreign Acquisitions and Takeovers Act 1975 (Cwlth) and its associated regulations.
As part of the Foreign Investment Review Board's (FIRB) annual update of its policy, the following main changes have been made:
1. Investment threshold
1.1 Business acquisitions:
1.1.1 The threshold for business acquisitions (other than New Zealand investors and United States investors) has been increased from $244 million to $248 million.
1.1.2 The threshold for United States investors has been increased from $1,062 million to $1,078 million.
1.1.3 New Zealand investors now also have the benefit of the $1,078 million threshold which used to be given only to United States investors (previously $244 million for New Zealand investors).
1.2 Developed commercial real estate:
1.2.1 The threshold for the acquisition of developed commercial real estate (other than New Zealand Investors and United States investors) has been increased from $53 million to $54 million.
1.2.2 The threshold for New Zealand investors is now the same as for United States investors, at $1,078 million (previously $53 million for New Zealand investors).
2. Foreign government investors
2.1 Foreign government investors regulated by the Australian Prudential Regulation Authority as an 'Authorised Deposit Taking Institution' do not need to notify the Government when they take security over an asset as part of a lending agreement.
2.2 Notification and prior approval is not required if the security is enforced and the asset sold.
2.3 However, notification is required if the investor gains control over the asset and retains it for more than 12 months.
2.4 Foreign government investors now includes the aggregate interest (direct or indirect) of 40% or more (in addition to the single foreign country's aggregate interest (direct or indirect) test of 15% or more). This is now in line with the test used for non-government foreign investors.
2.5 Foreign governments have, for some time, been required to obtain approval to start a new business. 'New business' is now defined to include an operating business that commences a new primary activity that is:
2.5.1 not incidental to an existing primary activity; and
2.5.2 falls within a different Division under the Australian and New Zealand Standard Industrial Classification as published by the Australian Bureau of Statistics.
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