Australia proposes to impose additional registration requirements under the Foreign Investment Review Board Regulations

On 2 March 2023, the Australian Treasury released exposure draft legislation, Treasury Laws Amendment (Measures for Future Investments) Instrument 2023: Register of Foreign Ownership of Australian Assets which, if passed, will require foreign persons to register certain actions under Australia’s foreign investment regime on a Register of Foreign Ownership of Australia Assets (Register).

Under the current Register, foreign investors are required to register interests in:

• Agricultural Land (since 2015) including the stocktake

• Water Entitlements (since 2017) including the stocktake

• Residential Land (since 2017)

The amendments to the Foreign Acquisitions and Takeovers Regulation 2015 (FIRB Regulations) will:

• Prescribe new requirements for the registration of foreign interests
   

• Require registration for certain interests which are covered by an exemption under the FIRB regime

Under the new changes that take effect on 1 July 2023, foreign persons will be required to notify the Registrar of interests acquired, held, or disposed of including:

• Current interests included on the Register
   

• A foreign person acquiring a direct interest in an entity or business carrying on an Australian media business
   

• A foreign government investor acquiring a direct interest in an Australian entity or Australian business
   

• A foreign government investor starting an Australian business
   

• A foreign government investor acquiring an interest in a tenement
   

• A foreign government investor acquiring an interest of at least 10% in securities in mining, production or exploration
   

• A foreign investors' actions that would otherwise be considered a significant action, notifiable action, notifiable national security action or a reviewable national security action in relation to:

  • Interests in land, if not covered by an exemption certificate
     

  • Mining and production tenements
     

  • Entities or businesses

Generally, a notice to the Registrar will be required to be made within 30 days of the foreign person taking the action. The Register will be maintained by the Australian Taxation Office. Foreign persons will be required to notify online through Online services for foreign investors.

The exposure draft of the amendments is available for review here. Consultation will close on 31 March 2023.

For additional information with respect to this Alert, please contact the following:

Ernst & Young (Australia), Corporate Law, Sydney

• Alex Worner 
   

• Amber Cerny 
   

• Adam Coonan
   

• Steve Johns 

Ernst & Young LLP (United States), Australia Tax Desk, New York

• Naomi Ross 

For a full listing of contacts and email addresses, please click on the Tax News Update: Global Edition (GTNU) version of this Alert.