From 10:30 pm, 29 March 2020, the monetary thresholds for substantial interests attracting the obligation to obtain Foreign Investment Review Board (FIRB) approval have been reduced to $0.
What has changed?
- The commonwealth government has announced new measures to regulate dealings in Australian assets to protect Australia’s national interest in light of the economic difficulties caused by the spread of the coronavirus
- Changes to FIRB screening mean lower value transactions will now require applications for approval
- Decisions are expected to be delayed by up to six months
Who is affected?
These changes will significantly increase the number and value of transactions that require FIRB approval. This means that all foreign investment in Australian land or businesses that is otherwise within the scope of the Foreign Acquisitions and Takeovers Act 1975, will be subject to scrutiny and will require clearance from the FIRB.
Due to these changes, the government has acknowledged that it expects the workload of FIRB to increase significantly. Accordingly, the deadline by which FIRB must issue a decision has been extended from 30 days to up to six months.
What should you do?
If you were considering buying or selling an interest in an Australian business or land you will need to reconsider whether you are now required to apply for FIRB approval. Furthermore, even if a purchaser was already required to obtain FIRB approval, it is important to acknowledge the probability that FIRB approval may now take up to six months. This has the potential to significantly delay the anticipated completion date of a transaction.
Please contact us if you would like advice about whether you are required to apply for FIRB approval or if you would like assistance with the preparation of your application. Rigby Cooke Lawyers have assisted many of our clients to apply for and successfully obtain FIRB approval for commercial transactions in Australia.
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