The Federal government announced on 5 June 2020 that the current temporary Foreign Investment Review Board (FIRB) rules put in place in response to the COVID-19 pandemic are expected to come to an end on 1 January 2021.
As part of significant proposed changes to the FIRB regime, the Treasurer also announced that the government will release draft legislation next month that introduces a new national security test for foreign investors seeking to invest in an Australian ‘sensitive national security business’. The government proposes to legislate the changes before the end of the year, with the intention that they will take effect from 1 January 2021 when it is expected that the temporary emergency rules currently in place will expire. Significantly, the Treasurer has called these proposed reforms the most significant since the establishment of the foreign investment regime in 1975. We discuss the key aspects of these proposed changes below.