AUSTRALIA: Foreign investment reforms implemented

Monday July 6 2015

After the announcement of a reforms package on 6 May 2015 with the aim of reinforcing the foreign investment framework, the Australian Government is now seeking input from stakeholders on the Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015 and the Register of Foreign Ownership of Agricultural Land Bill 2015.

Below are a selection of the proposals that the Government invites comments on:

• The current law states that the definition of foreign persons does not apply to foreign governments. On this point, the proposed changes in the law set out that the definition of ‘foreign person’ is extended so that it applies to foreign governments. This means that the requirements imposed by the Act will apply to all foreign government investors unless an exemption is the Act or regulations applies;

• The current law states that the substantial interest threshold is 15 per cent. On this point, the proposed changes in the law set out that the substantial interest threshold is 20 percent;

• The current law sets out that no fees are payable. On this point, the proposed changes set out that fees are payable and that the fee to be made for each application or notice will be prescribed in regulations;
• The current law sets out that a foreign person is required to notify the Treasurer of a proposal to acquire or increase an interest in Australian urban land, unless an exemption applies. On this point, the proposed changes set out that the requirements that currently apply to Australian urban land will apply to all land in Australia unless an exemption or specific rules apply;

• The current law sets out that the Treasurer can monitor compliance with the Act and Regulations and investigate alleged contraventions of the Act and the Regulations by requiring a person to give information or provide documents. On this point, the proposed changes set out that in addition to allowing the Treasurer to require a person to give information or produce documents, the Act will enable officers from the Australian Taxation Office to exercise broad ranging investigatory powers.

The Government invites interested parties to make a submission concerning their proposals. Comments should focus on the Exposure Drafts of the Bills and explanatory materials. Submissions may be lodged electronically or by post. The closing date for submissions is 17 July 2015.

Click on the above link for further details.