Jurisdiction - Australia
Reports and Analysis
Australia – 2014 Thresholds For Notification Under FATA And Government Foreign Investment Policy.

21 January, 2014

WHAT YOU NEED TO KNOW

 

Indexing of the 2013 foreign investment thresholds (by the GDP implicit price deflator in accordance with Reg 13 of the Foreign Acquisitions and Takeovers Regulations 1989 (Cth)) has not resulted in any increase of those thresholds for 2014.
Set out below is a summary of the current Australian foreign investment thresholds.

 

Non US or NZ Investors 

 

Notification is required:

 

  • where the value of the Australian target company or business is A$248 million or more
  • for an offshore takeover where the target company has Australian assets or businesses valued at A$248 million or more
  • for developed non-residential commercial real estate (where the property is not heritage listed) valued at A$54 million or more
  • for heritage listed property valued at A$5 million or more.

 

 

US or NZ Investors

 

Notification is required:

 

  • where the value of the Australian target company or business is A$1078 million or more
  • for an offshore takeover where the target company has Australian assets or businesses valued at A$1078 million or more
  • for developed non-residential commercial real estate (whether or not heritage listed) valued at A$1078 million or more
  • where the Australian target company is in a prescribed “sensitive sector” (including media, telecommunications, defence and transport) and the value of the target is A$248 million or more.

 

 

The acquirer entity must be a “US enterprise” or a “New Zealand enterprise” (ie not an Australian subsidiary of a US or New Zealand enterprise).

 

Investments requiring notification irrespective of value 

 

Direct investments by foreign government investors (including state-owned enterprises and sovereign wealth funds)

 

The Government’s policy is that a foreign government investor must notify FIRB and obtain foreign investment approval before making a “direct investment” in an Australian company, proposing to establish a new business or acquiring an interest in land, regardless of the value of the investment.

 

Real estate

 

All proposed acquisitions of vacant non-residential land or residential real estate by a foreign investor must be notified (some exemptions apply).

 

All proposed acquisitions of shares or units in an Australian urban land corporation or trust estate by a foreign investor must be notified (some exemptions apply).

 

All investments of 5% or more in the media sector must be notified.

 

KFTA

 

On 5 December 2013, the Government announced that Australia had concluded negotiations with the Republic of Korea for a Free Trade Agreement. Approval processes in Australia and Korea are needed before the Agreement will be signed and come into operation. We presume that Korean investors will then receive increased thresholds as do US and New Zealand investors.

Ashurst Logo

 

For further information, please contact:

 

Bruce Macdonald, Partner, Ashurst

[email protected]

 

 

Justin Shmith, Partner, Ashurst

[email protected]

 

Ashurst Corporate/M&A Practice Profile in Australia

 

Homegrown Corporate/M&A Law Firms in Australia

 

 

Comments are closed.