On 29 March 2020, Australia introduce a new rule that requires any foreign person to first obtain permission from Australia’s Foreign Investment Review Board (FIRB) before they acquire an interest in an Australian business. Any acquisition must pass the ‘national interest’ test regardless of value.
The new legislation applies to both large and small businesses.
Approval must be obtained from Australia’s Foreign Investment Review Board (FIRB).
The impact of this new legislation is that all temporary visa holders including 188 visa holders will need to apply for approval from FIRB before they:
- – Buy business assets – Section 41(2)(b) of Foreign Acquisitions and Takeover Act 1975 (FATA)
- – Buy shares in a company – Section 40(2)(b) and Section 47(2)(b) of FATA
- – Issue shares in a company – Section 40(2)(c) of FATA
- – Buy an interest in land used for a business, including 5-year leases – Section 43 and Section 47(2)(c) of FATA
NOTE: Penalties (including civil and criminal penalties) may apply for breaches of Australia’s foreign investment rules. This is particularly relevant for 888 visa applicants who are required to comply with all laws in Australia to pass the 888 visa requirements.
There are many documents that FIRB will want to review before they provide approval for your business acquisition or new shareholding in a business.
FIRB’s assessment team ask many questions to ensure they understand all the information about every shareholder and associated person involved in buying an Australian business.
JADE’s Management Consultants can apply for FIRB approval for your business purchase or share acquisition in a private company. Speak to one of our team today. Our contact: +61 (0) 421 522 273.