In connection with ongoing changes to Australia’s foreign investment regime under the Foreign Acquisitions and Takeovers Act 1975 (Cth) (the Act), a new register of foreign ownership of Australian assets (the Register) has been introduced. The new Register is administered by the Commissioner of Taxation (the Registrar).
The Register came into effect on 1 July 2023.
The Register requires foreign investors and Australian entities that qualify as “foreign persons”, to notify the Registrar within 30 days of acquiring specific investments held in Australian land, entities, and businesses. These reporting requirements are in addition to the existing approval processes and reporting requirements outlined in the Act.
It is important to note that the term ‘foreign person’ is broadly defined and includes Australian companies and trusts with foreign interests as low as 20% and Australian subsidiaries of foreign entities.
What are the key functions of the Register?
The Register:
- replaces and amalgamates existing foreign investment registers relating to agriculture, residential land, water and business interests (where applicable) and mining, production and exploration tenements);
- expands on the types of assets that must be registered;
- streamlines the management of foreign investors’ investments, and
- enhances government viability.
The Register is not public and will be subject to the same rules as those that apply to other information relating to foreign investment under the Act.
What are the reporting requirements?
The Register is a post-acquisition recording system, and foreign persons are required to register their direct investments within 30 days of acquisition, rather than proposed acquisitions.
Penalties for failure to notify?
Failure to notify the Registrar within 30 days may result in a civil penalty of 250 penalty units, currently amounting to a hefty $68,750.
What should you do, and how can we help?
Division 3 of Part 7A of the Act outlines when a foreign person is required to notify a transaction or a relevant change in circumstances to the Registrar.
Please get in touch with our office if you are unsure whether your foreign investment is the kind of acquisition that must be notified to the Registrar or where you or your entity experience a change in circumstance, and you become or cease to be a foreign person.
Important Dates
17 – 25 June 2023
The ATO Land and Water Registration Form was retired on 17 June 2023, and other FIRB forms will be removed as the ATO transitions to the new FIRB platform.
26 June 2023
The new FIRB platform was made available to foreign investors on 26 June 2023.
1 July 2023
The Register commenced on 1 July 2023.