Today the Morrison Government announced the biggest reform in 50 years to the way Australia handles foreign investment. 

These reforms will preserve the underlying principles of our system: that Australia welcomes foreign investment for the significant benefits it provides but also ensures that investments are not contrary to the national interest. 

Key elements of the reform package include:

• A new national security test for foreign investors who will be required to seek approval to start or acquire a direct interest in a ‘sensitive national security business’ – regardless of the value of the investment.
• A time-bound ‘call in’ power enabling the Treasurer to review acquisitions that raise national security risks outside of proposed acquisitions relating to a ‘sensitive national security business’.
• A national security last resort power that provides the ability to impose or vary conditions and in extraordinary circumstances order disposal on national security grounds.
• Stronger and more flexible enforcement options including the expansion of infringement notices and higher civil and criminal penalties.
• Measures to streamline approval for passive investors and investments into non-sensitive businesses.

The Government will release exposure draft legislation for consultation in July, with the reforms scheduled to commence on 1 January 2021.

For more information visit https://joshfrydenberg.com.au/latest-news/major-reforms-to-australias-foreign-investment-framework/.