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Everything you need to know about FIRB monetary thresholds

By Michael Hansel and Christina Hooper / 26 May 2021
8 min.
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Worthwhile read for: Company directors, CEO, Board members, Investors

The Foreign Investment Review Board (FIRB) has released their updated financial thresholds requiring FIRB approval. This alert sets out thresholds to be mindful of when acquiring Australian land investments and Australian non-land investments. 

Monetary thresholds are indexed annually on 1 January, except for the agricultural land thresholds of $15 million and $50 million which were not indexed.


Land investments

The threshold is $0 for the following types of land.  

National security land

This includes any of the following that is in Australia, and is owned or occupied by the Commonwealth for use by the Defence Force or the Department:

  • an area of land or any other place (whether or not it is enclosed or built on);
  • a building or other structure;
  • a prohibited area, within the meaning of the Defence (Special Undertakings) Act 1952; or
  • the Woomera Prohibited Area.

Residential land 

This means land in Australia if there is at least one dwelling on the land or the number of dwellings that could reasonably be built on the land is less than 10,1 and does not include land used wholly and exclusively for a primary production business or on which the only dwellings are commercial residential premises. 

Vacant commercial land 

This includes vacant land in Australia or the seabed of the offshore area, other than land:

  • used wholly and exclusively for a primary production business; 
  • on which there is at least one dwelling (except commercial residential premises); or
  • on which the number of dwellings (except commercial residential premises) that could reasonably be built is less than 10. 

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Private investors from certain FTA Partners

Different thresholds apply to private investors (not foreign government investors) from the following countries:

  • Chile;
  • China; 
  • Hong Kong;
  • Japan;
  • New Zealand;
  • Peru;
  • Singapore;
  • South Korea;
  • the United States of America; and
  • any other countries not otherwise listed (other than Australia) for which the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), done at Santiago on 8 March 2018 is in force (i.e., Canada, Mexico and Vietnam). 

Agricultural land

Agricultural land means land in Australia that is used, or that could reasonably be used, for a primary production business
 

 

For Chile, New Zealand, and the United States: $1,216 million.

Others: $15 million. 

This is cumulative and includes all agricultural land previously held by the investor. 

Developed commercial land

$1,216 million

For Hong Kong and Peru, where the land is sensitive: $61 million.

Sensitive land includes:

  • the land is commercial land that is not vacant;
  • the interest in the land being acquired gives a right to occupy the land or to be involved in the central management and control of the entity that holds the land;
  • any one or more of the following applies at the time the interest in the land is acquired:
  1. the land will be leased to the Commonwealth, a State, a Territory or a Commonwealth, State or Territory body (with some exceptions); 
  2. the land will be fitted out specifically for a business of sensitive business or providing storage of bulk data;
  3. the land will be fitted out specifically to store, handle or dispose of biological agents on the List of Security‑sensitive Biological Agents;
  4. an authorisation under a law of the Commonwealth, a State or a Territory will allow materials that are regulated under that law to be produced or stored on the land;
  5. a mining operation will operate on the land;
  6. a stored communication (within the meaning of the Telecommunications (Interception and Access) Act 1979) will be stored on the land;
  7. the failure of part of a network unit (within the meaning of the Telecommunications Act 1997) on the land will result in telephony or internet services not being provided on other land;
  8. servers critical to an ADI (within the meaning of the Banking Act 1959) or a stock exchange in Australia will be located on the land; and/or
  9. public infrastructure will be located on the land.

Mining and production tenements

We refer you to our previous alert where this expressly does not include exploration tenements, which are not subject to monetary thresholds unless acquired by a foreign government investor or the exploration tenement is also national security land.

For Chile, New Zealand, and the United States: $1,216 million.

Others: $0.

Agricultural land corporation

An agricultural land corporation is defined to be an entity where more than 50% of their assets are agricultural land. 

For Chile, New Zealand, and the United States: $1,216 million.

Others: $15 million.

This is cumulative and includes all agricultural land previously held by the investor.

Australian land corporation (non-agricultural)

An Australian land corporation is defined to be an entity where more than 50% of their assets are Australian land. 

 

$1,216 million

For Hong Kong and Peru, where the entity holds interests in sensitive land (as set out above): $61 million.

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Private investors not from a certified FTA Partner

Different thresholds apply to private investors not from a certified FTA Partner Country (as set out above). These thresholds do not apply to foreign government investors. 

Agricultural land

For Thailand: $50 million.

This is cumulative and includes all agricultural land previously held by the investor.

Others: $15 million.
This is cumulative and includes all agricultural land previously held by the investor.

Developed commercial land

$281 million

Where the land is sensitive (as set out above): $61 million.

Mining and production tenements

$0

Agricultural land entity

For Thailand: $50 million.

Others: $15 million (cumulative).

Land entity (non-agricultural)

 

$281 million

Where the entity holds interests in sensitive land (as set out above): $61 million.

Where the total value of interests in residential land, vacant commercial land and mining and production tenements is 10% or more of the value of the total assets of the entity: $0.

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Non-land investments 

There are broadly five categories of investment in Australian business that may require FIRB approval.

National security business 

National security business is a business carried on in Australia and is of one of the following kind:

  • the business is a responsible entity (within the meaning of the Security of Critical Infrastructure Act 2018) for an asset;
  • the business is an entity that is a direct interest holder in relation to a critical infrastructure asset (within the meaning of those terms in the Security of Critical Infrastructure Act 2018);
  • the business is a carrier or nominated carriage service provider to which the Telecommunications Act 1997 applies;
  • the business develops, manufactures or supplies critical goods that are, or are intended to be, for a military use, or an intelligence use, by:
  1. defence and intelligence personnel;
  2. the defence force of another country; or
  3. a foreign intelligence agency; 
  • the business develops, manufactures or supplies critical technology that is, or is intended to be, for a military use, or an intelligence use, by:
  1. defence and intelligence personnel;
  2. the defence force of another country; or
  3. a foreign intelligence agency; 
  • the business provides, or intends to provide, critical services to:
  1. defence and intelligence personnel;
  2. the defence force of another country; or
  3. a foreign intelligence agency;
  • the business stores or has access to information that has a security classification;
  • the business stores or maintains personal information, collected by the Australian Defence Force, the Defence Department or an agency in the national intelligence community:
  1. of persons who are covered by the definition of defence and intelligence personnel; and
  2. which, if accessed, could compromise Australia’s national security;
  • the business collects, as part of an arrangement with the Australian Defence Force, the Defence Department or an agency in the national intelligence community, personal information:
  1. of persons who are covered by the definition of defence and intelligence personnel; and
  2. which, if disclosed, could compromise Australia’s national security; or
  3. the business stores, maintains or has access to personal information which if disclosed, could compromise Australia’s national security.

Australian media business

An Australian media business is a business doing one or more of the following:

  • publishing daily newspapers in Australia (including on websites from which all or part of those newspapers may be accessed);
  • broadcasting television or radio in Australia (including on websites from which all or part of those broadcasts may be accessed); and
  • operating an electronic service covered by subsection that delivers content over the internet, is wholly or partly for the purpose of serving Australian audiences, that meets the content and threshold test.

Sensitive business 

Sensitive businesses are media, telecommunications, transport, defence, military, nuclear, or communications business. 

Non-sensitive business

Non-sensitive businesses are businesses that is not a sensitive business. 

Agribusiness

An agribusiness is determined by their earnings derived in recent years. 

Investor

Action

Threshold

All investors

National security business

$0

Australian media business

$0

Private investors from certain FTA partners

Non sensitive business

$1,216 million

Sensitive business

$281 million

Agribusiness

$61 million 
This is cumulative and includes all agricultural land previously held by the investor.

Private investors not from a certain FTA partner

 

Business (sensitive and non sensitive)

$281 million

Agribusiness

$61 million 
This is cumulative and includes all agricultural land previously held by the investor.

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Foreign Government Investors

The threshold for foreign government investors for all investments (land or business) is $0. 

For more information, please contact our Corporate Advisory and Governance team.

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Footnotes

1  As prescribed by section 19 of the Foreign Acquisitions and Takeovers Regulations 2015 (Cth). 

Authors
Michael Hansel
Partner
Michael is a Partner in our Corporate practice with expertise in mergers and acquisitions, capital raisings, due diligence, takeovers, joint ventures, corporate restructuring and private equity transactions. Michael is also the co-lead of our Asia...
Christina Hooper
Associate
Christina is an Associate in our Corporate practice.

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