How will the changes to the Foreign Acquisitions and Takeovers Act (FATA) effective from July 1, 2023 affect you?

The Australian Taxation Office has announced that effective 1 July 2023, a new Register of Foreign Ownership of Australian Assets will be implemented.

The legislative regime creating the new Register introduces additional reporting obligations for foreign investors and Australian entities that become “foreign persons” in relation to their interests in Australian land, entities, and businesses. These obligations supplement the existing approval processes and reporting requirements under the Foreign Acquisitions and Takeovers Act (FATA).

Under the new regime, foreign investors will be required to provide notice to the Commissioner of Taxation (the Registrar) regarding specific events related to their interests in Australian land, entities, and businesses. 

The following summary outlines the events that are proposed to trigger obligations to report to the Registrar, which events are not currently required to be notified under the existing foreign investment regime:

Notification to the Registrar must be provided within 30 days of the “registrable event day.” The Australian Taxation Office will launch an online platform to facilitate reporting for the new Register, allowing foreign investors to authorize third parties to give notice on their behalf. Failure to provide notice within the specified 30-day period may incur civil penalties.

The Register itself will not be publicly accessible, and information recorded on the Register will be subject to rules similar to those governing other foreign investment information under the FATA. Disclosure of information on the Register will be limited to other government bodies performing their functions or exercising their powers under the FATA.

01

Acquisitions by “foreign persons”:

- Australian entities becoming “foreign persons” due to an interest acquisition of at least 20% by a foreign investor. The Australian entity must report its holdings of freehold interests and leases of Australian land.
- Reporting of “substantial interests” and “direct interests” held by Australian entities in other Australian entities, Australian agribusinesses, and national security businesses that require FATA approval if acquired immediately after the Australian entity becomes a “foreign person.”

02

Increases in interests in an Australian entity or business of 5% or more:

Reporting of subsequent increases of 5% or more in the interest held by a “foreign person” in an Australian entity or business.

03

Acquisition of certain interests in Australian land (regardless of value):

Reporting of the acquisition of freehold interests or leases of Australian land with a term likely to exceed 5 years.

04

Disposals by “foreign persons” or ceasing business activities:

- Reporting of the disposal or sell-down of 5% or more of existing interests in an Australian entity or business or ceasing certain businesses.
- Reporting if the Australian entity ceases to be an Australian entity or is wound up.
- Reporting the cessation of business activities previously notified to the Register.

05

An Australian entity ceasing to be a “foreign person” or “foreign government investor”:

Reporting when an Australian entity that previously notified interests in Australian land, entities, or businesses to the Register ceases to be a “foreign person” or “foreign government investor.”

06

Disposals of certain interests in Australian land (regardless of value):

Reporting of the disposal of freehold interests or leases of Australian land that were previously notified to the Register.

07

Change in interests in Australian land previously notified to the Register:

Reporting of changes in the nature of Australian land previously notified to the Register.

Disclaimer

The posts in this blog are published as general information only. They are not intended to nor do they constitute legal advice. HTW Legal Group strives at all times to provide users with accurate information but we do not guarantee that the information contained in this blog reflects accurately current law or procedure.

You should not act or refrain from acting in any matter based upon the information contained in this blog without first seeking the advice of a lawyer who practices in the area of law related to your matter. Do not hesitate to contact HTW Legal Group to make an appointment with one of our team of experienced lawyers to obtain advice tailored to your personal situation.