The Foreign Acquisitions and Takeovers Act 1975 (Cth) (FATA) regulates all foreign investment into Australia, requiring all investment to obtain approval unless an exemption applies or the investment is below the relevant monetary threshold. Some of these thresholds are indexed annually on 1 January, seeing an increase in the relevant threshold and thereby providing a bit more flexibility for inbound investment.
Monetary thresholds and FIRB approval
It is important for foreign investors to be aware of the increase in monetary thresholds. If an investment is below the relevant threshold, an investor may not be required to obtain Foreign Investment Review Board (FIRB) approval. Alternatively, if an investment is subject to foreign investment approval, it may have a range of compulsory prior notification requirements. Where compulsory notification is required, a failure to obtain FIRB approval will be a breach of the FATA and can potentially expose the foreign investor to the risk of significant penalties. These penalties, depending on the circumstances, could include a fine, unwinding or divestment orders, or criminal prosecution.
Exemptions for foreign government investors
Importantly, indexation and thresholds do not apply to foreign government investors. This definition captures a number of private equity funds, and investors involved in such funds should examine their obligations closely.
The following sets out, at a glance, the increased thresholds following the 1 January 2025 indexation:
Types of land
Developed commercial land
2024 threshold – $330 million.
2025 threshold – $339 million.
Developed commercial land where the land is sensitive in accordance with section 52(6) of the Foreign Acquisitions and Takeovers Regulation 2015
2024 threshold – $71 million.
2025 threshold – $73 million.
Residential Land, National Security Land, Mining and Production Tenements (i.e. mining leases) and Vacant Commercial Land
2024 threshold – $0.
2025 threshold – $0 (no change).
Private investors from certain free trade agreement partners for Developed Commercial Land, Agricultural Land and Mining Production Tenements (i.e. mining leases). Noting this higher threshold has very strict requirements and is not always available.
2024 threshold – $1,427 million.
2025 threshold – $1,464 million.
Type of entity of business
National Security Business and Australian Media Business
2024 threshold – $0.
2025 threshold – $0 (no change).
Businesses or entity (non-land rich)
2024 threshold – $330 million.
2025 threshold – $339 million.
Agribusinesses
2024 threshold – $71 million (cumulative).
2025 threshold – $73 million (cumulative).
Private investors from certain free trade agreement partners for non-sensitive business and entities. Noting this higher threshold has very strict requirements and is not always available.
2024 threshold – $1,427 million.
2025 threshold – $1,464 million.
For a complete list of the 2025 indexed figures, please refer to the Monetary Thresholds Update published on the Australian Government Foreign Investment website.
Non-indexed thresholds
The thresholds which are not indexed annually include the $15 million (cumulative) threshold applicable to investments in agricultural land.
For further information regarding this alert or how McCullough Robertson can assist, please contact a member of our FIRB team: Andrew Bukowski, Duncan Bedford, Meg Morgan or Natalie Kurdian.
