Senior woman and adult son wearing face mask at airport in fear of coronavirus and travel ban and international trips cancellations for disease control and prevention of COVID 19 outbreak pandemic.

Changes to the Foreign Investment Review Board (FIRB) Regulations

Luke Mitchell ||

As Australia and the economy begins to recover from COVID-19, we have seen yet another important change relating to the FIRB regulations. The changes which were introduced as a reaction to COVID-19, these changes have now been superseded and it is critical for foreign property investors and owners to understand the regime, below is a summary to assist with this.

Monetary Thresholds

One of the most important changes that we saw in 2020 was that companies that ordinarily would not need to seek FIRB approval were forced to, when all acquisitions were made subject to a monetary screening threshold of $0. However, the new reforms effective 1 January 2021 have reinstated the pre-COVID-19 monetary screening threshold. The monetary threshold is dependant on the type of acquisition however, we can expect to see a drop in the number of companies requiring FIRB approval.

Notifiable National Security Action

In the context of commercial property transactions, in addition to foreign persons undertaking a notifiable action and a significant action, the new reforms have introduced a notifiable national security action which is triggered by acquiring an interest in national security land.

So, what does this mean?

National security land is where there is a defence premises or where a national intelligence agency has an interest in the land.

It is important to know what this means because a notifiable national security action carries a monetary threshold of $0 and the new reforms have increased penalties for non-compliance.

There are both criminal and civil penalties for not complying with the FIRB reforms including but not limited to:

  • providing false or misleading information;
  • failing to give notice of an action; and,
  • for taking an action prior to receiving FIRB approval.

Treasurer’s power to unwind a transaction

The reforms give the Treasurer a new ‘last resort’ power which gives them the ability to make divestiture orders and impose new or vary conditions after a FIRB approval has been granted.

Change to foreign government investors

There is now relief for those entities in which foreign government investors hold a passive interest in. Previously, if the foreign government investor held an interest of 40% or more, they would fall within the definition. However, if they operate a passive investment fund scheme where individual investors in the fund are not able to influence investment decisions or the management of the investments, they will meet the exemption.

Property industry gives a big sigh of relief

Having lived through the turmoil of 2020, and in particular the complexity that a $0 threshold placed upon routine transactions such as leasing of commercial, industrial and retail premises, it is such a relief that the status quo has returned. Whilst I understand what the government is trying to achieve through the $0 threshold, it meant that leasing transactions in particular took longer to finalise then they needed to and added an additional level of cost which had the potential to place additional burdens on business at a time where they were under a great deal of pressure.

At Coleman Grieg Lawyers, we understand that a lot of businesses have done it tough in 2020 and we hope that 2021 is the dawn of better times. Coleman Greig’s Commercial Property team are here to assist in guiding you through these times, so please do not hesitate to reach out if you have any questions.


Send an enquiry

Any personal information you provide is collected pursuant to our Privacy Policy.


More posts

SafeWork NSW
SafeWork NSW releases new strategy to address psychosocial hazards

On 22 May 2024 SafeWork NSW introduced a new strategy to address psychological and psychosocial hazards. The SafeWork NSW Psychological Health and Safety Strategy 2024-2026 establishes new supports for employers regarding their duties in preventing psychosocial harm in the workplace.

roles in the strata scheme
Understanding roles in the strata scheme

A strata scheme is a building or group of buildings that have been divided into lots which can be apartments, villas, offices, units or townhouses. This will be articulated in the strata plan.

Airbnb home
Can I put my home on Airbnb?

Airbnb is a form of short-term rental accommodation. To add your property to Airbnb in NSW, you are required to meet several laws and regulations governing short-term rentals.

liquidators required to seek approval
When are liquidators required to seek approval to retain legal counsel?

When does a liquidator (or the company he or she is appointed to) need court, creditor, or committee approval to validly retain a solicitor to act in a liquidation matter which is likely to extend for longer than three months?  The answer to this question has only recently been settled.

Proposed changes to building
Proposed changes to building and construction law in NSW

The Building Bill 2022 (the Bill) is the key avenue through which the NSW Government has proposed to reshape the culture of the building and construction industry by eliminating poor performance and improving the quality of building statewide.

Dismiss an employee
Can you dismiss an employee who fails to return to the office?

Slowly but surely, most employers are requiring employees to return to the office for at least a portion of their working week. Some employers continue to struggle with employees resistant to returning to the office or those who have an expectation that they can continue to work from home whenever it suits them.

Phoenixing in Construction
New powers to combat phoenixing in construction

The rise of phoenixing in the building and construction industry in Australia in recent years has proved a significant challenge to regulators. Mismanagement of time or cashflow can quickly propel businesses into insolvency.

© 2024 Coleman Greig Lawyers  |  Sitemap  |  Liability limited by a scheme approved under Professional Standards Legislation. ABN 73 125 176 230