Khyanne D'Sylva (White & Case) co-authored this publication

Introduction

Australia requires a wide variety of proposed investments by foreign investors to be reviewed and approved before completion. The Treasurer of Australia, advised by the Foreign Investment Review Board ("FIRB"), determines whether foreign investments are approved or denied based on national interest and national security considerations.

Australia's foreign investment policy framework comprises the Foreign Acquisitions and Takeovers Act 1975 ("FATA") and its related regulations; the Foreign Acquisitions and Takeovers Fees Imposition Act 2015 (the "Fees Regime") and its related regulations; Australia's Foreign Investment Policy; and associated guidance notes.

Summary of major changes in 2025

New Foreign Investment Portal

• On May 28, 2025, FIRB launched the new Foreign Investment Portal.
• Applications to FIRB are now submitted electronically through the new portal, which is designed to streamline the application process and aims to modernize and enhance the submission, assessment and management of applications.
• The portal uses dynamic forms with prepopulated options and built-in guidance to improve consistency of submissions.
• All correspondence with FIRB now occurs through the portal.
• The introduction of the new portal has changed how FIRB applications are prepared, with more information required upfront to submit an application, affecting the time required to collate information for submission.

Refunds and credits for FIRB application fees in competitive bidding

• FIRB introduced a measure allowing foreign investment applicants to receive a refund of 75 percent of their application fees if they submit a FIRB application but are ultimately unsuccessful in a competitive transaction.
• Applicants who do not succeed in a competitive transaction may opt for either a 75 percent refund or a full credit of the application fee, which can be applied to a future FIRB application lodged within 24 months of the original unsuccessful bid. Fee credits are single-use only. If the entire credit is not used on the next application, any remaining value cannot be carried forward or reused.

Eligibility requirements

• To qualify, there must be a genuine competitive bidding process involving at least two parties, with the outcome uncertain at the time bids are submitted.
• Applicants who withdraw before being notified of an unsuccessful bid are not eligible for a refund or credit. These options are also unavailable if the applicant decides not to proceed for reasons other than being outbid.
• Refunds and credits are not granted automatically. Each request is assessed individually, and applicants must provide documentation to support their claim.
• Applicants should indicate in their FIRB application that they are participating in a competitive bid. When seeking a refund or credit, supporting evidence, ideally a statement from the vendor confirming the applicant's participation and unsuccessful outcome, should be provided. Vendors may need to incorporate this requirement into their sale processes if FIRB applications are required before selecting a successful bidder.
• Applications related to residential land are not eligible for fee refunds or credits.

Scrutiny of tax arrangements

• FIRB introduced a revised tax checklist outlining the tax-related information that the Australian Tax Office ("ATO") requires in a FIRB application. The new FIRB portal requires applicants to answer tax-related questions upfront as part of the process before a FIRB application can be submitted. Applicants must respond to a series of questions in the checklist and, where information is missing, specify when it is likely to be provided. These questions largely align with those typically asked by the ATO after an application is lodged. As a result, foreign investors are required to move away from the previous practice of omitting tax submissions from their initial applications and waiting for ATO queries in the form of requests for information ("RFIs").
• FIRB updated its guidance to note that the ATO is particularly interested in scrutinizing FIRB applications with respect to, for example, internal reorganizations, related-party financing, investments structured through effective low- or no-tax jurisdictions, or transactions that are overly complex or involve hybrid financing instruments designed to obtain more favorable tax outcomes.

Intensified scrutiny of sensitive sectors

• The Australian Government continues to apply heightened scrutiny to investments in sensitive sectors, particularly critical minerals and critical infrastructure, to safeguard the national interest. Consistent with this approach, FIRB oversight is expected to remain rigorous for transactions involving critical infrastructure, critical minerals, sensitive land, and technology assets, reflecting increasing concerns around national security and supply chain resilience.
• FIRB's approach to critical minerals is underpinned by a risk-based framework, combining heightened scrutiny of higher-risk investments with a policy objective of attracting investors from 'like-minded' countries to support secure and diversified supply chains. In this context, increased investment from US investors is anticipated, particularly following the introduction of the new US–Australia Framework.

Who files?

A foreign person or entity (or an agent on behalf of the foreign entity) making an acquisition that requires approval under the FATA must apply to FIRB for a notification that the Treasurer has "no objection" to the acquisition before completion. In these circumstances, any agreement to make the acquisition must be conditional upon receipt of FIRB approval by the investor.

An application includes a filing fee that varies according to the type and value of the action being taken, the consideration payable and whether special fee rules apply. Fees for foreign investment applications cannot exceed a certain amount (the maximum fee). The amount of the maximum fee depends on the kind of application.

Types of deals reviewed

FIRB approval is required for various acquisitions by foreign persons.

These include:

• the acquisition of a "substantial interest" (being 20 percent or more direct or indirect interest) in an Australian entity or business that also meets the relevant monetary threshold applied to the transaction; and
• the acquisition of a "direct interest" (being 10 percent or more direct or indirect interest, or any interest with control or influence) in an Australian national security business, Australian land corporation, or a media business, irrespective of monetary value.

National security businesses include those relating to critical infrastructure assets, telecommunications, defense or national intelligence communities. Starting a national security business also requires prior approval, irrespective of monetary value.

Approval is required to acquire an interest in national security land, such as defense premises or land in which a national intelligence community has an interest. Acquisitions of this type have no monetary threshold.

The regulations also cover diverse acquisitions of interests in Australian land and mining and production tenements, subject to varying monetary thresholds. This includes agricultural, residential, vacant and developed commercial land, and entities with 50 percent or more of their total asset value attributable to Australian land interests.

Types of investors also receive differing treatment, subject to their nationality or jurisdiction of incorporation. Each foreign investor should consider the applicable monetary threshold and other provisions relevant to it, with respect to a proposed acquisition.

Investors from specific countries benefit from higher monetary thresholds based on free trade agreements ("FTA"). However, the direct acquiring entity will also need to be from the relevant country for the higher thresholds to apply.

Generally, with respect to acquisitions of securities in an Australian entity, mandatory FIRB approval is only required where the monetary threshold exceeds AUD 347 million for investors from non-FTA countries, or AUD 1.498 billion for investors from FTA countries, except for national security, media businesses or sensitive businesses, Australian land corporations, or where the acquirer is a foreign government investor. In these situations, the monetary threshold is generally greatly reduced or, in most cases, nil.

Stricter rules apply to "foreign government investors," which can include domestic or offshore entities where a foreign government and its associates hold a direct or upstream interest of 20 percent or more, or foreign governments of more than one foreign country and their associates hold an aggregate interest of 40 percent or more. In general, unless an exemption applies, a foreign government investor must obtain FIRB approval before acquiring a "direct interest," generally defined as at least 10 percent holding or any percent with an ability to influence, participate in or control, in any Australian asset or entity; starting a new business; or acquiring mining, production or exploration interests.

Scope of the review

The Treasurer may prohibit an investment if he or she believes it would be contrary to national interest or national security and, if approving the investment, may impose conditions on an approval to safeguard national interest or national security.

In making this decision, while the concept of "national interest" is not defined in the legislation, the Treasurer will broadly consider the impact on national security, taking into account the extent to which investments affect the Australian economy, competition or government policies.

These considerations include the impact of any plans to restructure an Australian enterprise following an acquisition; the nature of the funding of the acquisition and the level of Australian participation in the enterprise after the foreign investment occurs; the interests of employees, creditors and other stakeholders; and the extent to which the investor will develop the project and ensure a fair return for the Australian people. Consideration is also given to the character of the investor, including the extent to which the investor operates on a transparent commercial basis and is subject to adequate and transparent regulation and supervision.

The Treasurer will also consider whether a proposed investment may result in an investor gaining control over market pricing and production of a good or service in Australia, the effects of other Australian government laws and policies (including tax, environmental and critical technology laws) and objectives, and the impact of the investment on Australian tax revenues.

The "national security test" requires the Treasurer to assess a given investment from a national security perspective and whether the investment will affect Australia's ability to protect its strategic and security interests.

In making this assessment, the Treasurer relies on advice from the relevant national security agencies as to whether an investment raises national security issues, for example through foreign intrusion or espionage. This test is generally applied in circumstances where an investment involves a "national security business," "national security land" or falls within one of the sectors of interest (critical infrastructure, critical minerals, technology, etc.) for the Treasurer.

The decision as to what is contrary to the national interest or national security is at the sole discretion of the Treasurer.

Review process timeline

Under the Act, the Treasurer has 30 days to consider an application and make a decision. However, in practice, the assessment process is often extended, typically eight to 12 weeks from the time of application to receipt of a "no objections" notification. The holiday period and federal government election periods usually impact these timeframes for decisions.

The timeframe for making a decision will not start until the correct application fee has been received by FIRB in full. If the Treasurer requests further information from the investor, the review period will be on hold until the request has been satisfied.

Typically, if FIRB requires further time, it will request that the applicant voluntarily extend the approval deadline. As the Treasurer is also entitled to unilaterally impose a 90-day extension under the statute, applicants are generally incentivized to "voluntarily" request the proposed deadline extensions, and in practice, the review process will take approximately eight to 12 weeks.

How foreign investors can protect themselves

Foreign persons should file an application in advance of any transaction that requires FIRB approval, and any transaction requiring mandatory FIRB approval must be conditional on receipt of FIRB approval. Foreign investors should obtain appropriate advice at an early stage of the transaction with respect to the application of the Act whenever a transaction directly or indirectly involves the acquisition of Australian assets. A transaction requiring mandatory FIRB approval should not proceed to completion until the Treasurer advises on the outcome of his or her review.

Particularly for applications related to sensitive or national security businesses (those with a nexus to the Australian defense force, public infrastructure, sensitive data, energy, ports, water, telecommunications, critical infrastructure/minerals, banking or media sectors), the Australian government encourages engagement with FIRB before filing applications for significant investments.

These early discussions serve as a valuable forum for foreign investors to gain insights into the intricacies of their application, discern any national interest concerns the government may have, and understand the potential conditions the Treasurer might impose upon approval. Such an understanding may result in foreign investors being able to structure transactions differently to mitigate adverse FIRB outcomes. Proactive and early engagement is also crucial in competitive bid scenarios to avoid situations where other bidders have already obtained FIRB approval.

Foreign investors also need to be aware of the sensitivity surrounding investment structures, profit shifting and the payment of Australian tax. Collaboration with tax advisors at the outset ensures that investment structures align with the parameters acceptable to the ATO, a critical consideration given the ATO's involvement in all approval processes, and the increasing imposition of tax conditions on approvals.

Transparency in disclosing upstream ownership details of the acquiring entity is also beneficial, including meeting the FIRB requirement to identify and disclose direct and indirect, legal and beneficial holders of a five percent or more interest in the acquiring entity to streamline the review process and mitigate unwarranted scrutiny by FIRB.

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