Earlier this week the Federal Government announced a series of important
changes to Australia’s foreign investment policy framework as a result of
market conditions flowing from the impact of COVID-19.
The primary changes, which are temporary in nature for the duration of the
COVID-19 crisis, are:
1. Effective from 10.30pm AEDT on Sunday 29 March 2020, all proposed
foreign investments into Australia subject to the Foreign Acquisitions and Takeovers Act 1975 (the Act) will require
approval, regardless of value or the nature of the foreign investor, and
2. To ensure sufficient time for screening applications, the Foreign
Investment Review Board (FIRB) will work with existing and new applicants
to extend timeframes for reviewing applications from 30 days to up to six
More information about the Treasurer’s announcement and FIRB’s approach
to administration of the expanded regime can be found on the FIRB
For some years now many private capital investment firms within our
membership have been subject to FIRB approval processes due to application
of the ‘foreign government investor’ rules. The changes announced earlier
this week have the effect of significantly expanding the range of
investment firms and transactions brought within scope of the regime by reducing all
monetary thresholds to $0 for relevant ‘foreign persons’ subject to the
Since the announcement the Council has been working extensively on this issue, and
have taken feedback from member firms across the industry about the
implications of this decision on current and future activities. We know that
many investment firms in the industry are dealing with emergency funding
situations within portfolio companies impacted by COVID-19, and this immediate change to investment rules will present new
challenges in many cases. That’s the reason we have moved quickly and
decisively to advocate on behalf of the industry on a range of initiatives.
Some of the steps we have already taken in relation to this issue include:
- Engaging with numerous investment firms and key legal advisors within the
industry to define the scope of the issues arising from this policy change.
- Holding initial discussions with the FIRB Secretariat within the
Department of Treasury to better understand further details around the
announced changes, and to share our views on key areas of concern.
- Writing to the Federal Treasurer to provide our support for the extent of
the Government’s COVID-19 work in seeking to protect the Australian economy
to the greatest extent possible, while pointing to the key concerns we have
with the implications of the expanded foreign investment policy framework –
especially in the context of providing vitally important and urgent
financial support to portfolio companies within our industry.
The Council will continue to engage with FIRB and the Federal Government on this
very important issue in days and weeks to come. We will be keeping its members updated
with further information that is relevant to our industry once it is
available, which we hope will assist with decision making during this period
of heightened volatility and uncertainty for all businesses.