Foreign Investment Laws

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Foreign investment plays a vital role in the Australian economy by supporting existing jobs and creating new jobs, encouraging innovation and the induction of new technologies and skills, providing access to markets and promoting competition.

It is interesting to note that:

  • at the end of 2018, the stock of total foreign investment in Australia was worth around $3.5 trillion;
  • Treasury’s foreign investment approvals data showed that there was $163 billion of proposed investment approved in the 2017-18 financial year;
  • Firms with FDI, support 1 in 10 jobs and also make a significant contribution to the one in five jobs that are trade-related in Australia.

The Foreign Investment Review Board (FIRB) is the “gatekeeper” to foreign investment in Australia. FIRB is a non-statutory body established in 1976 to advise the Treasurer and the Government on Australia’s Foreign Investment Policy and its administration.

Australia’s foreign investment laws strike a balance between ensuring that Australia remains an attractive investment destination, while maintaining community confidence in foreign investment and protecting Australia’s interests.

Australia’s system uses a set of monetary thresholds, with investment proposals above those thresholds being screened against a national interest test.

The national interest test is broad. The national interest, and what would be against it, includes factors such as:

  • Impact on the economy;
  • Impact on the community;
  • National security;
  • Competition;
  • Taxation; and
  • The character of the investor.

FIRB assesses applications against this national interest test and works with investors to manage any identified concerns against the broad national interest criteria.  Where national interest concerns are identified, the Government’s preference is to apply conditions as part of the approval to manage risks and to allow the investment to proceed.

Tim Hayter, Principal, Mid West Lawyers

This information is general in nature and should not be relied upon as legal advice. Formal legal advice should be sought for your particular circumstances.