Various changes to Australia’s foreign investment framework are scheduled to come into effect from 1 December 2015. The impact of these changes are broad and include new fees and stricter enforcement and penalties.
To date there has not been any fees payable on foreign investments applications. However, any applications lodged after 1 December 2015 will be subject to a new ‘user pays’ system with the following fee levels:
A$5,000 – Residential and rural land acquisitions with a value less than A$1 million
A$10,000 – Acquisitions of vacant commercial land, internal reorganisations and new business proposals
A$10,000 – Residential land and rural land acquisitions (with a A$10,000 incremental fee increase for each additional A$1 million in property value in excess of A$1 million and a cap of A$100,000 for rural land acquisitions)
A$25,000 – Annual programs, advanced off the plan certificates, developed commercial real estate acquisitions and heritage land acquisitions.
A$25,000 – Business and corporate acquisitions, including agribusiness acquisitions less than A$1 billion.
A$100,000 – Business and corporate acquisitions, including agribusiness acquisitions exceeding A$1 billion.
We recommend lodging applications as early as possible to avoid these fees, but if this is not possible you will need to factor them in to your transaction budget.
The changes also introduce tougher penalties to better facilitate the pursuit of foreign investors who break the law.
For criminal penalties, the maximum penalties for most offences will be:
Individuals – 750 penalty units ($127,500) or three years imprisonment; and
Company – 3750 penalty units ($637,500).
Civil penalties will also be introduced, with maximum penalties of:
Individuals – 250 penalty units ($42,500); and
Company – 1250 penalty units ($212,500) for business and agricultural investments.
The Government will also introduce increased criminal penalties and new civil penalties for third parties who knowingly assist foreign investors to breach the rules.
The regulations have been updated as of 1 July 2017. Click here to view the amendments.