Foreign Investment Review Board
Foreign investment has helped Australia build its economy and enhance the wellbeing of Australians by supporting economic growth and innovation for the future. There are many benefits to foreign investors (Investment Visa). In addition to supplementing domestic savings, investment also:
- Supports existing jobs.
- Creates new jobs.
- Encourages innovation and the induction of new technologies and skills.
- Provides access to markets.
- Promotes competition amongst our industries.
While foreign investment is crucial, it’s important that foreign investors proposals strike a balance between facilitating investment and protecting Australia’s national interest.
To ensure foreign investor proposals are consistent with Australia’s national interest and security, the Australian Government reviews major investment proposals on a case-by-case basis through the Foreign Investment Review Board (FIRB).
What is the FIRB?
The Foreign Investment Review Board (FIRB) is a non-statutory body comprised of six members with extensive experience in senior public, private and non-for-profit sector roles. It was established in 1976 to advise the Treasurer on investment policy and its administration. The board functions in an advisory capacity only and makes recommendations to the Treasurer on behalf of the Government. The responsibility for the Government’s foreign investment policy and for making decisions on proposals rests with the Treasurer.
The main functions of the FIRB are:
- To evaluate proposals by potential foreign investors for acquisitions and new investment projects in Australia and make recommendations to the Treasurer on these proposals based on the Government’s foreign policy.
- To advise the Treasurer on general foreign investment matters.
- To foster an awareness and understanding of the government’s investment policy, in Australia and abroad.
- To provide guidance, where necessary to foreign investors so that their proposal conforms with the policy.
- To monitor and ensure compliance with foreign investment policy.
- To monitor foreign-controlled businesses in Australia.
- Liaise with state and local governments.
The review system allows the government to consider community concerns around foreign ownership of certain assets when assessing Australia’s interest.
Why is the Review of Foreign Investments Important?
While foreign investment is critical to Australia’s economy and prosperity, some proposed foreign investments may not be in Australia’s best national interest – something that has been recognised by successive governments. It’s the obligation of the Australian government to protect Australia’s national interest.
Approval may be required for foreign entities before acquiring land or making business investments including but not limited to:
- The acquisition of Australian land (agricultural, mining, residential and commercial)
- The acquisition of an interest in an Australian business (generally if its 20% or more)
- Direct investments in agribusiness (generally 10% or in a position of control)
- Direct investments in national security businesses or national security land
Where investment proposals do not conform to policy, the Commonwealth Government has the power to block a proposal or order the sale of assets acquired contrary to guidelines.
Australia reviews foreign investment proposals or applications to ensure inbound investment is in its national interest or are not contrary to its national security.
What are the Reasons for Investing in Australia?
Australia offers foreign investors many advantages compared to other countries seeking foreign investment. Some of the reasons foreign investors choose to invest in Australia include:
- Consistent economic growth.
- A highly skilled workforce.
- Australia’s strategic location.
- Strong governance and legal systems.
- Good infrastructure.
Obligations as a Foreign Investor
Foreign investors are responsible for ensuring they understand their obligations regarding Australia’s foreign investment framework. Foreign investors are expected to:
- Comply with Australia’s laws and maintain a high standard of conduct at all times.
- Comply with conditions and notices imposed on the investment proposal.
- Keep records related to the investment.
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