On 2 May 2015, the Government announced a package of reforms to strengthen the foreign investment framework, including:
- stronger enforcement of the foreign investment rules by transferring the residential real estate functions to the Australian Taxation Office;
- stricter penalties that will make it easier to pursue court action and ensure that foreign investors are not able to profit from breaking the rules;
- application fees to improve service delivery and ensure that Australian taxpayers no longer have to fund the cost of administering the system;
- increased scrutiny around foreign investment in agriculture;
- increased transparency on the levels of foreign ownership in Australia through a land register; and
- a more modern and simpler foreign investment framework.
These reforms will be given effect by the Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015, the Register of Foreign Ownership of Agricultural Land Bill 2015 and the Foreign Acquisitions and Takeovers Fees Imposition Bill 2015, which are before Parliament, and through associated regulations and rules.
The Government is now seeking input from stakeholders on the substantive regulations and their explanatory materials. These are:
- The exposure draft of the Foreign Acquisitions and Takeovers Regulation 2015: replaces the existing regulations to the Foreign Acquisitions and Takeovers Act 1975, upon enactment of the Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015. The exposure draft contains key provisions, such as the definition of agribusiness, definitions and rules around foreign government investors and would also implement aspects of the Government’s announced modernisation package.
- The exposure draft of the Foreign Acquisitions and Takeovers Fees Imposition Regulation 2015: provides for fees for notifiable actions and the exemption certificate included in the exposure draft of Foreign Acquisitions and Takeovers Regulation 2015, as well as draft sections prescribing a lower fee amount or a method of working out the lower fee amount.
We invite all interested parties to lodge a submission. Comments should focus on the Exposure Drafts and their explanatory materials.
While the Government is also proposing to make rules to the Register of Foreign Ownership of Agricultural Land Bill 2015 (if enacted), these rules will focus on the meaning of agricultural land and given the purpose of the Agricultural Land Register, are unlikely to provide exemptions. The intent is that the meaning of agricultural land for the Register will be aligned with that at draft section 40 of the exposure draft of the Foreign Acquisitions and Takeovers Regulation 2015. Parties interested in this definition may refer to this when considering comments that they may have.