Summary of Foreign Acquisition and Takeovers Reforms


On 9 December 2020, the Australian Federal Parliament passed legislation about that the most significant reforms to the Foreign Acquisitions and Takeovers Act 1975 in nearly 50 years. The new laws commenced on 1 January 2021.

A summary of the major changes are as follows:

  • doing business in Australia is now easier because the temporary $0 monetary screening thresholds that were introduced in response to the coronavirus have been removed, while the mandatory screening of investments in sensitive national security businesses will continue at the current $0 monetary threshold;
  • a mandatory notification is required in respect of ‘notifiable national security actions’ which are to take a direct investment in a sensitive ‘national security business’, or starting such a business, or an investment in ‘national security land’;
  • the Treasurer has been given a new ‘last resort power’ to make divestment orders and unilaterally impose a new condition or vary existing conditions after a FIRB approval has been granted;
  • the Treasurer has been given a new power to ‘call-in’ any investment for screening on national security grounds that would not ordinarily require notification;
  • tracing rules will now apply where a higher entity is an unincorporated limited partnership, but will still not apply to unincorporated general partnerships;
  • the asset threshold in respect of offshore transactions (such as where the foreign target has an Australian subsidiary) will be increased to $60m (and subject to annual indexation), and there will be an additional requirement that assets not be part of a national security business;
  • passive increases (such as increases in a foreign person’s percentage interest in an entity where that does not result from the person acquiring an interest in securities) in certain circumstances can constitute the acquisition of an interest in securities of an entity and therefore can trigger notifications if the other conditions are met, with a few exceptions;
  • the moneylending exemption will not apply to acquisitions or enforcements of security interests in ‘national security land’ or ‘national security businesses’ by foreign moneylenders under a moneylending agreement;
  • the definition of ‘Australian media business’ has been updated to capture the operation of electronic services (including via internet) which provide content similar to a newspaper or radio or television broadcast;
  • there will be two additional types of exemption certificates: one to cover notifiable national security actions and another to cover reviewable national security actions;
  • the Treasurer will have the power to unilaterally extend a decision period by up to 90 calendar days. This will be in addition to the existing power to make a public interim order which prohibits the applicant from undertaking the relevant transaction for up to 90 calendar days;
  • in respect of the ‘change in control’ test to determine significant actions, a person will no longer be taken to control an entity if the person is one of two or more persons holding an aggregate substantial interest in the entity;
  • there will be significantly increased criminal and civil penalties for non-compliance, and the giving of false or misleading information relating to a FIRB application can result in a civil penalty while there is no penalty under the current regime;
  • the Government will have greater ability to share information obtained under the FATA, both within government and also with foreign governments.

Contact Us

MistryFallahi Lawyers & Business Advisors has extensive experience to assist foreign investors and Australian investees to determine whether FIRB approval is required before a proposed transaction is implemented as well as to apply for FIRB approvals.


Joyce Wang

Joyce Wang is a dual-qualified lawyer admitted in Australia and China. Joyce advises Australian and international clients on mergers and acquisitions, foreign investment, capital raisings and other regulatory and corporate governance matters. Joyce leads the China Desk at MistryFallahi.

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