Change is Inevitable: Foreign Investment in Australia

Understanding Important Changes

Change is inevitable and the Australian government is no stranger to change. This evolving economy believes in creating a community fuelled, caring society – but in order to achieve these aspirations you need to abide by several simple yet strict guidelines.

Foreign investment in Australia falls under these guidelines. This facet needs constant tweaking to adjust accordingly with the changing economic environment, investor’s individual needs and to ensure all parties both foreign and domestic are treated equally.

Why should foreign investors be treated equally?

It’s simple; foreign investment plays an important and beneficial role in the Australian economy. It helps improve productivity by introducing new technology, and often involves investment in new infrastructure. It also promotes access to global supply chains and markets, exposing local employees to international business trends and practices, enabling them to improve their skill set.

Additional benefits

Additional capital for economic growth, new employment opportunities and improved consumer choice. It also promotes healthy competition and increases Australia’s competitiveness in the global markets.

Now that we have a better understanding as to why foreign investment is important, let’s explore why changes have been made.

Australia wants to ensure that all foreign investment is considered in a timely and consistent manner. If a vital investment breaks down due to an avoidable error, the entire country may feel the consequences. The new changes have made provisions to ensure this is less likely to occur, while still maintaining flexibility to consider investment proposals on a case-by-case basis.

This is where the Foreign Investment Review Board (FIRB) comes into play. The FIRB is responsible for reviewing all investment cases and ultimately has the final say when it comes to investment approval.

Understanding Important Changes

FIRB approval may seem daunting when it comes to foreign investment, but in essence, the new changes are simple and straight forward.

The previous law has remained largely unchanged since it came into effect, but occasional amendments have been needed in order to take into account any major changes in other corporate frameworks.

Key changes:

  • Changes have been made to modernise the framework, meaning a reduction in complexity and compliance costs for investors.
  • Transparency and certainty has been improved by incorporating policy-only requirements.
  • Increased interest threshold from 15% to 20%.
  • Removal of routine cases.
  • The introduction of civil and stronger criminal penalties for serious offences, as well as providing for the issue of infringement notices for less serious offences.
  • The introduction of civil penalties for third parties who assist in breaches of the rules

With these changes in mind, a simple understanding of FIRB approval requirements is all you need to know to ensure you abide by the new legal requirements.


FIRB approval is required for the following:

  • New dwellings & vacant land:
    No specific criteria to meet.
  • Established dwellings:
    A temporary resident may purchase an established dwelling, assuming it is to be used as the main residence while living in Australia. Selling of the property is usually required if leaving the country.
  • Redeveloping an established dwelling with multiple dwellings:
    A redevelopment proposal could normally be approved if the established dwelling(s) are demolished; but replaced with more dwellings than the initial demolished.
    This is subject to the following:
    1) The existing dwelling(s) must remain vacant prior to demolition and redevelopment.
    2) The existing dwelling(s) is demolished and construction of new dwelling(s) is completed within four years of the date of approval.
    3) Evidence of completion of the dwelling(s) is submitted within 30 days of it being received by the applicant.

    Note: This could include a final occupancy or builder’s completion certificate.


FIRB approval is not required for the following:

  • An Australian citizen. (Regardless of whether they are resident in Australia or not)
  • A New Zealand citizen.
  • The holder of an Australian permanent visa.
  • Foreign persons purchasing property as joint tenants with their Australian citizen spouse, New Zealand citizen spouse or Australian permanent resident spouse.
    Note: This exemption does not include purchasing property as tenants in common.
  • Foreign persons (regardless of citizenship or residency) do not require foreign investment approval to acquire an interest in residential real estate that is:
    1) A new dwelling purchased from a developer that holds a new dwelling exemption certificate that allows the developer to sell dwellings in the specified development to foreign persons.


Some of these requirements may seem confusing, and possibly unnecessary; but these changes should not be viewed as new vs. old. Neither should they be seen as extra paper work.

Foreign investment is pivotal to much more than just improving the Australian economy. Individuals from all corners of the globe, living together in harmony is the single greatest purpose for any country; and a government that adapts in order to aid this goal is a great place to call home.

If you are still feeling a little sheepish about investing Down Under, take a moment to read more about the many professional offerings out there.