Australia Foreign Investment FIRB Approval Requirements 2026

Foreign investment into Australian companies, businesses, and land is regulated by the Foreign Acquisitions and Takeovers Act 1975 (Cth) (“FATA”) and the Foreign Acquisitions and Takeovers Regulation 2015 (Cth) (“FATR”), administered by the Foreign Investment Review Board (FIRB) and decided by the Treasurer of Australia. By 2026, after the Foreign Investment Reform (Protecting Australia’s National Security) Act 2020 and subsequent fee uplifts, FIRB is one of the most consequential gateways for international companies establishing or acquiring in Australia. This deep-dive sets out the regime as it stands.

1. The Statutory Framework

• Foreign Acquisitions and Takeovers Act 1975 (Cth) — principal Act
• Foreign Acquisitions and Takeovers Regulation 2015 (Cth) — detailed thresholds and procedures
• Foreign Acquisitions and Takeovers Fees Imposition Act 2015 (Cth) — application fees
• National Security and Investment Act 2020 — national security review

Primary source: https://firb.gov.au/

2. When Is FIRB Approval Required?

A foreign person must obtain FIRB approval (a “no-objection notification”) for “notifiable actions” and “notifiable national security actions” defined in the FATA. Categories:

2.1 Direct Interest in Australian Land

• Residential land: any acquisition (subject to limited exceptions for permanent residents)
• Vacant commercial land: any acquisition
• Developed commercial land: thresholds apply ($50–$1,427M depending on country/sector)
• Agricultural land: $0 threshold for FIRB notification (acquisitions reduced to ≥$15M cumulative under the agricultural land register)

2.2 Direct Interest in an Australian Entity

A foreign person acquiring a “direct interest” (typically 10%+) or “substantial interest” (20%+ for single, 40%+ aggregate) in an Australian business or company.

2.3 Non-Sensitive Sector Threshold

For 2026 (annually adjusted by FIRB):

• Free trade agreement countries (US, NZ, Japan, Korea, Singapore, Chile, China, Hong Kong, Vietnam, etc., depending on agreement provisions): $1,427M
• Non-FTA countries: $330M

2.4 Sensitive Sectors (Lower Thresholds)

• Media, telecommunications, transport, defence, encryption, certain primary industries: $0 threshold (any interest notifiable for many of these)

2.5 National Security Business

Any direct interest in a “national security business” (defined in regulation 8A FATR) requires FIRB approval at $0 threshold, regardless of dollar amount.

National security businesses include those involved in: critical infrastructure, telecommunications, defence and national security supply, sensitive data, etc.

Reference: https://firb.gov.au/guidance-resources/guidance-notes/gn02-key-concepts

3. Who Is a “Foreign Person”?

Under section 4 FATA, a foreign person includes:

• An individual not ordinarily resident in Australia
• A corporation in which an individual not ordinarily resident in Australia, a foreign corporation, or a foreign government holds 20% or more of the equity or voting power (40% aggregate from multiple foreign persons)
• The trustee of a trust in which a foreign person holds 20% (40% aggregate)
• A foreign government, foreign government investor, or association of foreign government investors

The 20%/40% thresholds catch many seemingly Australian companies that have foreign minority shareholders.

4. The FIRB Application Process

Step 1: Determine Whether Approval Is Required

Internal threshold analysis — sector, value, type of interest, foreign person definition.

Step 2: Pre-Application Engagement (Optional)

For complex transactions, FIRB encourages early engagement. Saves later issues.

Step 3: Lodge Application

Online via FIRB’s portal. Requires:

• Applicant identity, ownership chain, ultimate beneficial ownership
• Target description and value
• Funding source and structure
• National security implications assessment
• Tax compliance disclosures (cooperation with ATO for tax conditions)

Step 4: Pay Fee

Fees are substantial and non-refundable. Indicative 2026 fees:

(Fees indexed annually; verify current schedule on firb.gov.au.)

Step 5: Review Period

Statutory review period is 30 days but extensions are common (up to 90+ days for complex or sensitive cases). Review covers:

• National interest (FATA s.55)
• National security (NSI Act, post-2020)
• Tax considerations (consultation with ATO)
• State/territory revenue offices for land acquisitions

Step 6: Decision

• No-objection notification (approval, often with conditions)
• Conditional notification (specifying conditions: divestiture timeline, tax cooperation, ongoing reporting)
• Refusal / divestment order (rare but used for genuine national interest concerns)

Reference: https://firb.gov.au/guidance-resources/guidance-notes/gn05-application-process

5. National Security Reform — 2021 and Beyond

The Foreign Investment Reform (Protecting Australia’s National Security) Act 2020 (in force from 1 January 2021) introduced:

• Notifiable national security actions — any direct interest in a “national security business” or “national security land”, regardless of value
• Reviewable national security actions — Treasurer can call in transactions for review even if not notifiable
• Last resort review power — Treasurer can review approved transactions if national security situation changes
• Conditions can be imposed retroactively
• Penalties strengthened — up to A$3.4M (or larger if disgorgement principle invoked) for contravention

The 2021 reforms have made FIRB increasingly conservative on technology, defence, infrastructure, and data-rich sectors.

6. Common Conditions Imposed by FIRB

For approved transactions, FIRB regularly imposes:

• Tax conditions — cooperation with ATO, transfer pricing review, Australian tax payment obligations
• Reporting conditions — periodic reports to FIRB during operation
• Australian-resident director requirement
• Australian-incorporated structure requirement
• Data localisation for sensitive sector
• Compliance with sanctions and export control
• Divestiture in case of breach

7. Penalties for Non-Compliance

Under FATA:

• Criminal: up to 10 years’ imprisonment + corporate fines
• Civil: penalty up to 5,000 penalty units for individuals (about A$1.65M in 2026); 25,000 units for corporations (about A$8.25M)
• Disgorgement: remove unlawful gain
• Divestiture order: forced sale within 12 months

Penalties were materially uplifted in 2020 and again in 2024 indexation.

8. Common Mistakes — Gyoseishoshi View

9. Sectors Receiving Heightened Scrutiny

Based on published FIRB guidance and recent decisions:

• Critical minerals (lithium, rare earths, cobalt) — high scrutiny on PRC-linked investors
• Defence and dual-use technology
• Sensitive data (health, financial, location)
• Telecommunications (post-Huawei era)
• Energy and infrastructure (especially gas, electricity grid, ports)
• Agriculture (especially water, food security)
• Health services

10. Strategic Implications for International Companies

1. Plan FIRB into the deal calendar — 30 days minimum, often more; bake into M&A timelines
2. Pre-application engagement for complex deals — FIRB welcomes proactive contact
3. Beneficial ownership documentation — full chain of ownership through to ultimate parents
4. National security pre-screening — sector self-assessment before acquisition
5. Tax structure compliance — anticipate tax conditions; build cooperation into operating model
6. Australian-domiciled holding structure — often imposed; plan for tax and corporate efficiency

11. Interaction with Other Approvals

FIRB approval does NOT replace:

• ASIC company registration / business name registration
• ATO TFN/ABN/GST registration
• Industry-specific approvals (e.g., banking, insurance, telecom carrier, mining, food import)
• Land transfer approvals at state level (stamp duty, foreign owner surcharge)
• ACCC merger clearance (separate competition regime)

12. Foreign Owner Surcharges (Land)

Post-FIRB, foreign owners of Australian residential property face additional state-level surcharges:

• Stamp duty surcharge: 7-9% in major states
• Annual land tax surcharge: 0.5-4% in major states
• Vacancy tax (Victoria, etc.) for unoccupied properties

These add materially to the cost of foreign property ownership.

Conclusion — A Mandatory Gateway

FIRB approval is not optional for foreign investment in Australia at material scale. The 2020-2024 reforms have made the regime more conservative and the penalties more severe. Compliance requires careful pre-transaction planning, beneficial ownership disclosure, national security pre-screening, and willingness to accept tax and reporting conditions.

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Disclaimer

Legal information, not legal advice. MmowW Scrib🐮 is operated by a licensed Gyoseishoshi (行政書士) office in Japan. We are not Australian solicitors.

Sources

• FIRB: https://firb.gov.au/
• Foreign Acquisitions and Takeovers Act 1975 (Cth): https://www.legislation.gov.au/Details/C2024C00154
• ATO: https://www.ato.gov.au/
• Treasury (Australia): https://treasury.gov.au/