Investment regulations - Australia
Reference
Holding restrictions
The Corporations Act 2001 and the Foreign Acquisitions and Takeovers Act 1975 govern substantial investment restrictions applying to foreign investors.
Under the general foreign ownership limit, no foreign investor (including any associates) may hold 20% or more of the ownership in an Australian business (or control 20% or more of its voting power) without prior approval from the Foreign Investment Review Board (FIRB) and the Treasurer of Australia's Commonwealth Government.
Similarly, multiple foreign investors (including any associates) holding 40% or more of the ownership in an Australian business (or who are in a position to control not less than 40% of its voting power) must seek approval from the FIRB and the Treasurer of Australia's Commonwealth Government.
The foreign ownership limits apply to businesses that are valued above AUD 261 million (as of calendar year 2018, subject to annual indexation). Except for businesses in prescribed sensitive sectors (sensitive businesses include media; telecommunications; transport; defence and military related industries and activities; encryption and securities technologies and communications systems; the extraction of uranium or plutonium and the operation of nuclear facilities.
Classification | Countries (full list) | How the high-value (AU $1.5 billion) threshold is applied |
Preferred/“Close‑relationship” investors | United States, United Kingdom, Canada, Japan, New Zealand, Singapore, South Korea, Taiwan, Hong Kong, EU member states (as a block) | Automatic high‑value threshold of AU $1.5 billion (indexed). If the transaction value is ≤ AU $1.5 billion, a notification only (ministerial advice) is sufficient unless the target is in a prescribed sensitive sector. |
| Standard (non‑preferred) investors | All other countries, including China, Russia, Brazil, India, Chile, Malaysia, Thailand, etc. | Must meet the standard three‑tiered thresholds: |
Key point: The AU $1.5 billion high‑value ceiling only applies to “preferred” investors. For all other foreign investors—including China and Chile—the high‑value test is the AU $261 million threshold (subject to indexation).
Foreign investors who want to acquire more than 19.99% of a company’s controlling interest are also subject to the takeover provisions of the Corporations Act 2001 (in addition to requiring prior approval from the FIRB and the Treasurer of Australia's Commonwealth Government).
Application forms are available on the website of the FIRB (http://www.firb.gov.au/).
Disclosure requirements
For details of the local domestic disclosure requirements, please refer to the Disclosure Requirements.
