Updates its Foreign Investment Policy

On 1 May 2024, recognizing that national security threats are increasing due to intensifying geopolitical competition, the Treasury announced reforms to streamline and strengthen Australia’s foreign investment framework, in order to deliver a stronger, faster and more transparent approach to foreign investment. The main novelties introduced by the 2024 update to Australia's Foreign Investment Policy are as follows:

• Strengthened Risk-Based Approach: The policy emphasizes a more robust risk-based assessment, focusing on scrutinizing high-risk investments to protect national interest while streamlining low-risk investments to attract capital more quickly.

• National Security Focus: Increased scrutiny for investments in sectors sensitive to national security, such as critical infrastructure, critical minerals, critical technology, and those involving sensitive data or in proximity to sensitive government facilities.

• Enhanced Monitoring and Enforcement: Greater resources will be dedicated to monitoring compliance with conditions imposed on high-risk investments, ensuring adherence to Australia’s taxation laws, and future-proofing the system to address emerging risks.

• Streamlined Processes for Low-Risk Investments: Efforts to expedite the processing of low-risk investments, including setting a target to process 50 per cent of investment proposals within a 30-day statutory decision period from January 2025.

• Focus on Key Economic Priorities: Specific encouragement of investments that support the net zero transformation, increase housing supply, support Australia’s Critical Minerals Strategy, and harness critical technologies.

• Refunds and Fee Adjustments: Introduction of application fee refunds for unsuccessful competitive bids, lower fees for investments in Build to Rent developments, and exemptions from mandatory notification and fees for passive or low-risk interfunding transactions.

• Duplication Removal in Competition Assessments: Improved timeliness in decision-making by removing duplications in competition assessments between the foreign investment framework and the merger control system.

• Support for Agricultural Workforce: Allowing Pacific Australia Labour Mobility (PALM) employers to buy established residential properties for their workers in rural and regional areas, addressing labor supply issues in agriculture.

These changes aim to balance the attraction of foreign investment with the protection of Australia’s national interests in a more dynamic and complex global environment.

• Type:

  • Entry and establishment (Approval and admission)
  • Promotion and facilitation (Investment facilitation , Investment incentives)

• Industry:

  • Not industry specific

• Sources:

  • Government portal, Australia's foreign investment policy, https://foreigninvestment.gov.au/sites/foreigninvestment.gov.au/files/2024-04/australias-foreign-investment-policy.pdf, 01 May 2024
  • Government Portal, Australia's foreign investment policy, https://foreigninvestment.gov.au/investing-in-australia/foreign-investment-framework, 01 May 2024