New foreign investor registration requirements in Australia
Trent Le Breton
by Trent Le Breton
New laws have been introduced in Australia that require any foreign person who acquires a registrable interest in Australian water, land, exploration tenements, entities, or businesses to register the acquisition on the Register of Foreign Ownership of Australian Assets. This is regardless of whether the acquisition requires notification or approval under Australia’s existing foreign investment regime.
The establishment of the Register is intended to increase the Australian government’s awareness of foreign ownership in Australia.
Circumstances where registration is required
A foreign person must register an acquisition within 30 days if:
They acquire an interest in Australian land or an exploration tenement, such as freehold, leases or licences (including any extension or renewal) reasonably likely, at the time the interest is acquired, to exceed 5 years, and in mining or production tenements;
The nature of the interest they hold in Australian land changes – such as changing from holding an interest in residential land to an interest in commercial land;
They acquire a registrable Australian water interest;
They take an action relating to interests in an entity or business that is subject to a mandatory notification; or
Has voluntarily notified; or
There is a 5% change in interest in such an entity or business.
Registration is also required if a person becomes a foreign person while holding an interest in:
Australian land, an exploration tenement, or registrable water interest;
An Australian entity or business that would have been subject to the mandatory notification requirements under the foreign investment laws; or
While carrying on or holding interest in a national security business.
Generally, a person is a foreign person if the person is:
An individual not ordinarily resident in Australia;
A corporation or trustee of a trust in which an individual not ordinarily resident in Australia, a foreign corporation or a foreign government, holds a substantial interest of 20% or more;
A corporation or trustee of a trust in which 2 or more persons, each of whom is an individual not ordinarily resident in Australia, a foreign corporation or a foreign government, hold an aggregate substantial interest of 40% or more; or
A foreign government.
Penalties for non-compliance
Significant penalties apply for failing to register an acquisition within the required 30-day period of up to 250 penalty units per day (equivalent to AUD 68,750 per day). The registration rules do not apply retrospectively.
Trent Le Breton and Steven Humphries between them have over 40 years of corporate M&A experience, combining industry-leading expertise across all stages of corporate transactions with commercially astute advice.Contact Trent. Contact Steven.
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