Foreign Investment Review Board

The Foreign Investment Review Board (FIRB) is Australia’s non-statutory advisory body for foreign investment screening. Established in 1976, it advises the Treasurer and the Australian Government on foreign investment policy, proposed acquisitions and the administration of Australia’s review framework, while final decision-making authority rests with the Treasurer rather than the Board.^[1]

Overview

FIRB is central to Australia’s system for reviewing certain foreign acquisitions, investments and interests in land, businesses and entities. It is not a court, corporate regulator or independent statutory authority. Its role is advisory: it examines proposals that fall within the foreign investment framework and makes recommendations to the Treasurer and other Treasury portfolio ministers.^[1]

Australia’s foreign investment framework is designed to balance openness to overseas capital with protection of the national interest. The Australian Treasury describes foreign investment as important to Australia’s economy and prosperity, while also noting that some proposed investments may not be in the national interest.^[2] In practice, this means that many foreign investments proceed without objection, while some are cleared subject to conditions and a smaller number may be prohibited or otherwise affected by Treasurer decisions.

The Board’s public-facing name is often used as shorthand for the broader foreign investment approval process. In legal and administrative terms, however, the framework involves several institutions: the Treasurer, Treasury’s Foreign Investment Division, FIRB, the Australian Taxation Office (ATO), and other Commonwealth, state and territory agencies that may be consulted on particular matters. Treasury administers Australia’s foreign investment regulatory framework and supports the Board’s work.^[1]

Legal and policy framework

The main legislation underpinning the framework is the Foreign Acquisitions and Takeovers Act 1975. The Act is in force and is administered by the Department of the Treasury.^[3] It operates with regulations, fees legislation and policy statements that define when foreign persons must notify the government, when investments may be reviewed, and what powers are available to the Treasurer.

Official foreign investment guidance lists several key legal instruments, including the Foreign Acquisitions and Takeovers Act 1975, the Foreign Acquisitions and Takeovers Regulation 2015, the Foreign Acquisitions and Takeovers Fees Imposition Act 2015, the Foreign Acquisitions and Takeovers Fees Imposition Regulation 2020, the Foreign Investment Reform (Protecting Australia’s National Security) Act 2020 and the Regulatory Powers (Standard Provisions) Act 2014.^[4]

The legislation covers a wide range of concepts, including interests in Australian land, interests in securities and assets, substantial interests, national security businesses, notifiable actions, significant actions, and requirements to register foreign ownership of certain Australian assets.^[3] The framework is therefore broader than mergers and acquisitions alone; it also extends to real estate, agriculture, mining, water interests, infrastructure and national-security-sensitive activities where relevant thresholds and definitions are met.

Other laws may also affect foreign investment transactions. Official guidance identifies examples such as the Security of Critical Infrastructure Act 2018, income tax legislation, the Competition and Consumer Act 2010, the Environment Protection and Biodiversity Conservation Act 1999, anti-money-laundering legislation and the Australian Securities and Investments Commission Act 2001.^[4] As a result, FIRB clearance is often only one part of a wider regulatory path for large or sensitive transactions.

Role and functions

FIRB’s stated role has three main elements. It examines proposed investments in Australia that are subject to the Foreign Acquisitions and Takeovers Act 1975 and supporting legislation, and makes recommendations to the Treasurer and other Treasury portfolio ministers. It advises the Treasurer on the operation of foreign investment policy and the Act. It also fosters awareness and understanding in Australia and overseas of the policy and the legislation.^[1]

The Board’s advisory role means that it does not itself approve, reject or condition transactions. Responsibility for decisions about policy and proposals rests with the Treasurer.^[1] Decision-making delegations also exist so that Treasury portfolio ministers and Treasury and ATO officials can decide some foreign investment proposals on behalf of the Treasurer.^[5]

Treasury’s Foreign Investment Division performs the continuing administrative work. In quarterly reporting, Treasury describes itself as Australia’s foreign investment policy adviser and regulator, responsible for administering the framework set by the Foreign Acquisitions and Takeovers Act 1975 and fees legislation. Treasury assesses commercial investment proposals, fosters compliance and advises the Australian Government on foreign investment policy.^[5]

The Australian Taxation Office has an important role in residential real estate proposals. Treasury’s quarterly reporting states that, under the framework, the ATO is responsible for residential real estate investment proposals.^[5] This division of work reflects the large number of property-related applications and the ATO’s role in administering tax and property compliance matters.

National interest and national security tests

Foreign investment proposals are assessed case by case. Treasury states that Australia reviews foreign investment proposals against the national interest on a case-by-case basis, with the objective of maximising investment flows while protecting Australia’s interests.^[2] Official quarterly reporting states that proposed foreign investments are assessed using either the national interest test or the national security test under the Foreign Acquisitions and Takeovers Act 1975.^[5]

The national interest test is not presented in official sources as a single mechanical formula. It is applied by government decision makers in light of the facts of a proposal and the policy framework. Matters that may be relevant can include national security, competition, tax, the investor’s character, impact on the economy and community, and consistency with other regulatory regimes, depending on the transaction and applicable guidance.

The national security test became more prominent after reforms that commenced in January 2021. Treasury quarterly reporting states that Australia’s national security powers were strengthened in January 2021 to cover more types of transactions subject to mandatory notification and to create a voluntary notification scheme for actions of any value that may raise national security concerns.^[5]

The framework can therefore apply even where a transaction is relatively small in monetary terms if it concerns a sensitive national security business, land or asset. This is significant for sectors such as critical infrastructure, defence supply chains, data, telecommunications, energy, ports and other assets where control or access may be relevant to national security assessment.

Process and outcomes

A foreign investor may need to apply for approval before taking certain actions, depending on the type of investor, the nature of the asset, the sector, the transaction value, the country of origin and whether national security issues are involved. Some acquisitions are mandatory-notification matters; others may be voluntarily notified to reduce later regulatory risk.

Applications are assessed by Treasury or the ATO, with FIRB providing advice on matters within its remit. For more complex or sensitive proposals, Treasury may consult other government agencies with relevant responsibilities. These may include agencies dealing with taxation, competition, national security, critical infrastructure, communications, defence, environment, agriculture or state and territory matters, depending on the transaction.

Possible outcomes include a no-objection notification, approval subject to conditions, prohibition, disposal orders or other compliance action where the law permits. Conditions may be used to address identified risks, such as tax compliance, governance, information access, data handling, Australian participation, reporting obligations or operational restrictions. The exact conditions depend on the transaction and the concerns being addressed.

The framework also includes fees. The Foreign Acquisitions and Takeovers Act 1975 contains a part dealing with fees in relation to actions, including provisions on when fees are payable and the requirement for fees to be paid before the Treasurer exercises certain powers.^[3] Separate fees legislation and regulations set out fee amounts and related rules.

Governance and membership

FIRB comprises members with professional experience relevant to investment, finance, business, government and policy. The official FIRB page lists Bruce Miller AO as Chair and identifies members including Carolyn Kay, Sarah Pearson, Linda Apelt, Kellie Benda and Chris Tinning.^[1]

Bruce Miller AO was appointed Chair in April 2022, according to the official FIRB page.^[1] The Board also includes an executive member from Treasury. Chris Tinning is listed as the First Assistant Secretary of Treasury’s Foreign Investment Division and the Executive Member of the Foreign Investment Review Board.^[1]

Conflict management is part of the Board’s governance arrangements. Official guidance states that members are required to take steps to avoid conflicts of interest, and that the Board has policies and procedures to identify and manage conflicts appropriately. Members do not participate in discussions or decision-making related to applications where they hold board roles in parties involved in the transaction, and they do not have access to case-specific information where a potential conflict has been identified.^[1]

Because FIRB is non-statutory, its governance differs from regulators established by legislation. Its authority comes from its advisory function within the executive government’s foreign investment framework rather than from an independent statutory mandate. This distinguishes it from entities such as Australian Securities and Investments Commission and Australian Prudential Regulation Authority, which have specific statutory regulatory powers.

Reporting and data

Australia publishes periodic information about foreign investment screening. Treasury’s quarterly report for 1 October to 31 December 2023 stated that it was the second quarterly report for the 2023–24 financial year and set out key performance data for the operation of the framework during that period.^[5]

In that quarter, 332 commercial investment proposals were approved with a total value of A$37.2 billion.^[5] The United States was the largest source of approved commercial investment proposals by value at A$7.6 billion, followed by Singapore at A$3.8 billion, Japan at A$3.4 billion, Canada at A$1.6 billion and France at A$1.5 billion.^[5]

The same report stated that mineral exploration and development was the largest target sector for proposed investment, with a total value of A$12.9 billion, followed by services at A$9.9 billion.^[5] Residential real estate approvals numbered 1,580 with a total value of A$1.9 billion for the quarter, and China was the largest source for approved residential real estate investment proposals by both number and value.^[5]

Processing times are also reported. For the October–December 2023 quarter, Treasury’s median processing time for approved commercial investment proposals was 42 days.^[5] Processing times can vary depending on the quality of information submitted, transaction complexity, consultation requirements, national security issues and whether conditions are being negotiated.

Relationship with other Australian financial institutions

FIRB operates within Australia’s broader financial and economic policy architecture. The Australian Treasury is the central policy department responsible for the foreign investment framework, and the Treasurer is the key decision maker. The Australian Taxation Office is involved particularly in residential real estate proposals and tax-related aspects of foreign investment compliance.

Other regulators may be relevant depending on the nature of the investment. The Australian Securities and Investments Commission may be relevant for corporate transactions, market conduct and disclosure issues. The Australian Prudential Regulation Authority may be relevant where foreign investment concerns banks, insurers or superannuation entities. The Australian Securities Exchange may be relevant for listed-company transactions and market announcements.

FIRB review does not replace these other regimes. A transaction involving an Australian listed company, for example, may require foreign investment clearance, corporate-law compliance, stock-exchange disclosure, competition review and sector-specific approvals. FIRB’s role is therefore best understood as one part of a multi-agency system for reviewing foreign ownership and control of Australian assets.

Significance

FIRB is significant because foreign capital has historically played an important role in Australia’s development, while foreign ownership of land, infrastructure, resources and strategic businesses can raise public-policy concerns. The framework is intended to preserve Australia’s openness to investment while giving the government tools to manage risks.

For investors, FIRB is important because approval requirements can affect transaction timing, deal certainty, due diligence, financing and contractual conditions precedent. For Australian companies, FIRB considerations can influence takeover bids, asset sales, joint ventures, capital raisings and infrastructure transactions involving foreign parties.

For policymakers, FIRB provides a mechanism for scrutinising foreign investment without imposing a general prohibition on foreign ownership. The case-by-case model allows proposals to be considered on their facts, though it also means that outcomes can depend on policy settings, transaction details and government risk assessments at the time of review.

See also

- Australian Treasury - Australian Taxation Office - Australian Securities and Investments Commission - Australian Prudential Regulation Authority - Australian Securities Exchange - Reserve Bank of Australia