Key Considerations ^ Changes to Australia’s FDI regime have expanded the Australian Treasurer’s Foreign Investment Review Board (FIRB) jurisdiction in recent years. ^ Following public consultation in late 2025, the Australian government has announced a package of legislative, policy and practice reforms (the “FIRB Reforms”) as part of its 2026-2027 Budget. Key reforms include: automating approvals for low-risk transactions, expanding exemptions from mandatory notification, broadening the Treasurer’s conditions and enforcement powers, and revising reporting obligations under the Register of Foreign Ownership of Australian Assets (the “Register”). Treasury will develop the details of the legislative reforms, and stakeholders will have an opportunity to comment through consultation on exposure draft legislation towards the end of 2026 or in 2027. ^ The ban on foreign investors purchasing established homes remains in place until June 30, 2029. Limited exceptions apply, such as in the build-to-rent sector or purchases by Australian and New Zealand permanent residents. ^ Private equity funds with non-Australian investor participants should also consider whether they would be characterized as Foreign Government Investors (FGIs), and whether an exemption to being characterized as an FGI (or to the specific action contemplated) could apply. Almost every transaction in which an FGI seeks to acquire a direct interest in an Australian asset or entity will require FIRB approval.
FDI Regime Overview FIRB is the governmental agency tasked with reviewing FDI proposals and making recommendations to the Australian federal Treasurer about the proposed investment. The Treasurer will then issue a “no objection notification,” which is colloquially called a “FIRB approval” if the proposed investment passes muster. The last substantive update to Australia’s foreign investment regime occurred on May 1, 2024 – the Australian government increased scrutiny on high-risk investments and investments in sectors implicating national security concerns, while streamlining low-risk investment processes. According to FIRB’s most recent quarterly report, 33 of the 326 commercial foreign investments approved between April and June 2025 related to national security actions that would not have been captured prior to January 2021.
FIRB’s most recent quarterly report references four ongoing regulator audits at the end of Q2 (compared to five audits in FY24-25) and fifteen in-progress investigations (compared to seven investigations in FY24-25), evincing an ongoing focus on compliance. For example, earlier this year, the Federal Court awarded AU$14 million in penalties after two foreign investors failed to comply with a disposal order due to national security concerns. The FIRB Reforms propose to further strengthen enforcement through more targeted disposal and prohibition orders (including orders excluding particular entities from acquiring disposed interests) and strengthened anti-avoidance provisions. FIRB continues to update and enhance its Foreign Investment Portal, launched on May 28, 2025, to make lodging foreign investor applications easier. One such update is additional competition questions to address the Australian Competition
6
FDI and National Security Review
Powered by FlippingBook