On 29 March 2020 the Treasurer announced two significant changes to Australia's foreign investment rules.
The changes are effectively immediately (but will not apply to transactions entered into before 10.30pm on 29 March 2020).
Reduced monetary threshold
The first change is that all proposed foreign investment into Australia subject to the Foreign Acquisitions and Takeovers Act 1975 will require the approval of the Foreign Investment Review Board (FIRB) regardless of value.
Previously, only transactions involving foreign government investors and certain other specific types of transactions required approval regardless of their value.
From an M&A perspective this means that any acquisition by a foreign person of an interest of 20% or more in an Australian entity, or a foreign entity that holds Australian assets, will require FIRB approval regardless of value.
Approval will also be required for acquisitions of (among other things) interests in land, agribusinesses and certain other assets.
The review period
The second change is that FIRB will be asking applicants to extend the period in which FIRB has to consider applications from 30 days to 6 months.
Despite this, FIRB "will prioritise urgent applications for investments that directly protect and support Australian businesses and Australian jobs".
Conditions and fees
It is unclear if FIRB will impose additional conditions on new applications in light of the current economic circumstances.
However, in a Q&A session following the announcement FIRB stated that the Government "would be particularly mindful of the potential impact on the community and employment in screening applications".
The announcement did not address application fees, however we expect fees to apply to all new applications.
It has been announced that the measures will remain in place for the duration of the crisis.