On 19 May 2026, Treasury released a framework to reform Australia’s foreign investment regime. In broad terms, the framework is designed to deliver long‑overdue efficiencies for repeat, compliant investors. At the same time, the Government is materially expanding its ability to intervene, revisit approvals and pursue structures it considers to be avoiding the foreign investment rules. Following consultation, this framework is expected to be implemented in a number of stages, including changes to FIRB processes and policy starting from 1 July 2026, as well as legislative change which is likely to occur over a number of years.
New low risk pathway
- A new low risk category will apply where both the investor and the transaction meet prescribed criteria. Under this pathway, low-risk transactions will be streamlined to make compliance more proportionate to investment risk. The target decision period for these applications will be 30 days.
- To be ‘low-risk’, the investor must have:
- received a foreign investment approval within the previous 24 months;
- not been subject to any extrajudicial directions; and
- no compliance history or character concerns.
- The transaction must also:
- not involve a sensitive sector or business;
- not raise national interest concerns; and
- have a straightforward and transparent structure.
Review of existing conditions
From 1 July 2026, Treasury will commence a review of existing FIRB approvals to update or remove unnecessary or duplicated conditions. This will initially focus on tax conditions but over time is expected to apply more broadly in an effort to reduce the compliance burden imposed by these conditions. While no process has yet been announced, it is expected that affected investors will be able to apply to have their conditions reviewed.
Streamlining of reporting on the Register of Foreign Ownership of Australian Assets
Much needed changes have been announced to the registration requirements, with the aim of simplifying the process and reducing duplication and complexity. Certain interests in commercial land, businesses and entities will no longer need to be registered. This will come as a relief to anyone who has had the misfortune of having to register anything but the most basic foreign ownership structure.
Expanded compliance powers
The framework also significantly expands the Government’s enforcement and intervention toolkit.
- The Treasurer’s last resort power will be amended to make it easier to respond where new national security risks emerge after an approval has been granted.
- Treasury will be able to add conditions, prohibit part of a transaction or partially unwind an investment, however will retain the current higher threshold for full forced divestment.
- Treasury will be able to impose conditions applying before, during and after an investment, and to accept statutory undertakings from investors or third parties.
- Call‑in powers will be extended to capture some transactions that currently fall below existing notification thresholds.
- Anti‑avoidance rules will move away from the ‘sole or dominant purpose’ test, though we do not yet know what this will look like.
Information sharing will increase across government agencies, and Treasury anticipates increased information sharing with financial institutions and legal advisers, broadly aligned with existing KYC frameworks.
Expansions to definitions of ‘control’ and ‘associates’
The definition of associate will be expanded to capture a broader range of influence, including lenders whose debt terms give them real control over a business or asset.
Tracing rules will be refined to focus on upstream entities with material interests or real control, while preserving Treasury’s ability to review later changes in influence.
Greater attention will be given to non‑ownership control arrangements, including offtake and financing structures, where these give effective control over sensitive assets.
Transaction approvals
The default validity period for no objection notifications will increase from 12 months to 24 months, reducing the need for extensions on larger or staged transactions.
Exemption certificates will be refocused on repeat, low risk investors and may provide broader relief from foreign person status, tracing and reporting requirements, subject to conditions.
Statutory timeframes for exemption certificate decisions will be removed, and Treasury has flagged changes to the fee structure, likely increasing costs for broader certificates.
What does this mean?
The Treasury is trying to move faster for compliant, trusted and low-risk investors. For investors with no concerns, the compliance burden of the foreign investment regime should be reduced.
For investors into sensitive businesses or industries, expect more intensive and more tailored compliance requirements, and expect more post-deal risk with the expansion of the Treasurer’s compliance powers.
For further information on what these changes could mean for you or your organisation, reach out to our Foreign Investment team.