Sheltons Group Legal – an Australian law firm based in London
Understanding the Proposed Changes to Australia’s Foreign Investment Framework
Earlier this year, Australia’s Treasurer, Dr Jim Chalmers, announced significant changes to Australia’s foreign investment framework with an aim to enhance national security and economic resilience.
Foreign businesses and investors planning to invest or establish commercial operations within Australia may require prior approval from the Australian Treasury. The Australian Treasury is advised by the Foreign Investment Review Board (FIRB), which examines and assesses investment proposals. As a foreign business or investor, depending on the nature of the business or investment, you may be required to submit your business or investment proposal to FIRB for assessment.
There are currently no proposed legislative changes, rather the changes will be implemented via streamlining Treasury processes, amending internal policies, and increasing resources.
We outline below the key points from Treasurer Jim Chalmers’ announcement. The Australian Government’s proposal intends to implement the following changes:
- Increasing the Treasury’s capacity to efficiently assess complicated or high-risk proposals by dedicating more resources to the teams which assess such proposals;
- Increasing scrutiny on sectors where there are supply chain resilience concerns, where there is a need to protect sensitive data, or where there may be a concentration of ownership concerns;
- Streamlining processes to provide faster approvals for known investors who are investing in non-sensitive sectors and who have a good compliance record;
- Ensuring foreign investors pay the correct amount of tax by continuing to update guidance about tax arrangements that will attract greater scrutiny (such as those which are overly complex); and,
- Enhancing compliance and monitoring to enforce conditions on foreign investments by increasing resources to compliance teams.
The good news from this announcement is that Treasury is looking to increase efficiency and reduce assessment times for investors engaging in low-risk investments.
What does this mean for your business?
The proposed changes may result in increased regulatory compliance for foreign businesses that plan to invest or operate in Australia. If your business is planning to invest or establish commercial operations within Australia, it is important that you understand Australia’s regulatory framework prior to investing.
For further details, you can refer to the full announcements and policy documents on the Treasury’s official website here: https://ministers.treasury.gov.au/ministers/jim-chalmers-2022/media-releases/reforms-strengthen-australias-foreign-investment
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If you’re looking to invest or establish operations in Australia, then feel free to let our London-based Australian qualified lawyers know and we can discuss how we can assist.
Courtney Gleeson
Lawyer
Sheltons Group Legal (London and Sydney)
C.Gleeson@SheltonsGroup.com