COVID-19 Impact to Transactions Involving Foreign Persons: Temporary Changes to the FIRB Regime

As the Coronavirus outbreak continues to disrupt the Australian economy, there will be opportunities for foreign investors to invest in or acquire distressed assets and businesses. To ensure that the Government has visibility of investments made during this crisis and to ensure that those investments are not contrary to the national interest, the Government announced temporary changes to the foreign investment review framework.

Effective from 29 March 2020:

  • the monetary threshold amounts which apply in determining whether particular foreign investments are subject to review under Australia’s foreign investment framework are effectively removed; and
  • the period to review and process new and existing applications has been extended to up to six months (from 30 days).

Monetary Thresholds  

The Government has reduced the monetary threshold to $0 for all investments so that, as has been the case for foreign government investors, all private foreign investors in all sectors and all acquisitions in entities, businesses and land will require approval, as long as the transaction involves a notifiable action within the meaning of the Foreign Acquisitions and Takeovers Act 1975 (Act).  Other than the monetary threshold component, the new measures do not change the meaning of significant or notifiable actions under the Act.

Following the Government’s temporary measures, the following transactions will require FIRB approval:

  • the acquisition by a foreign person of:
    • an interest of at least 10% in the entity or business;
    • an interest of at least 5% in the entity or business and the foreign person has also entered into a legal arrangement relating to the person’s business and the entity or business; or
    • an interest of any percentage in the entity or business if the foreign person is in a position to influence or participate in the central management and control of the entity or business, or influence, participate in, or determine the policy of the entity or business;
  • the acquisition by a foreign person of a “substantial interest” in a business or trust if the person (and its associates) holds an interest of at least 20% in the entity or business;
  • the acquisition by a foreign person of an interest in Australian land (subject to certain exemptions);
  • certain actions by foreign government investors;
  • certain investments in the media sector;
  • acquisition of 20% or more in a publicly-listed entity; and
  • acquisition of a legal or equitable interest in an exploration, mining or production tenement or an interest of at least 10% in securities of a mining, production or exploration entity.

Extension of time for reviewing and processing

FIRB has been given up to six months to review and process FIRB applications. This applies to all applications including applications lodged prior to 29 March 2020. However, the Government will prioritise urgent applications for investments that protect and support Australian businesses and Australian jobs.

These temporary measures will remain in place for the duration of the Coronavirus crisis. This period has not yet been determined and it is therefore unknown when these measures will be lifted.

Parties to transactions to acquire interests in Australian securities, assets or land involving foreign investors (including individuals, companies, trustees and governments) need to account for the potential delays to completion resulting from the need to apply for foreign investment approval prior to entering into the transaction.

Should you wish to further discuss how the new measures impact on your prospective transactions , please don’t hesitate to contact Ashleigh Le or Alfonso Grillo of our office on 03 8621 8888 or reach them by email at or, respectively.

Alfonso Grillo

Ashleigh Le

Senior Associate