In February 2015, the Australian Government (Government) released the 'Strengthening Australia's Foreign Investment Framework' Options Paper (Options Paper) outlining a proposed new foreign investment compliance and fee regime (Regime).

On 2 May 2015, the Government announced that legislation will be introduced in the Spring Sitting of Parliament that implements the Regime effective as of 1 December 2015.

The 2015-2016 Commonwealth Budget (Budget) has included the anticipated revenue that will be raised and expenditure that will be outlaid in implementing the Regime, including the following:

  • from 1 December 2015, an application fee on all real estate, business and agricultural foreign investment proposals will raise an estimated $735 million in revenue over four years;
  • the Government will provide $19.7 million to the Department of Treasury and $47.5 million to the Australian Tax Office over four years to improve compliance and strengthen the enforcement of the Regime;
  • the Government will provide $0.6 million to the Department of Agriculture to advise on specific agricultural foreign investment proposals; and
  • the Government will provide $15.8 million over four years to establish a Treasury office in Sydney to enable the Treasury to engage with the private sector more effectively, including on foreign investment issues.

In addition, the Government has indicated it will introduce a register of foreign ownership of agricultural land and residential land, however no revenue was specifically allocated in the Budget in this regard.

The Regime will also strengthen the criminal penalties under the Foreign Acquisitions and Takeovers Act 1975 (Cth) and introduce a new civil penalties regime. Projected revenue raised from the new civil penalties regime was not included in the Budget.

Not all issues raised in the Options Paper have as yet been addressed by the Government. More information on these issues should become available once the Government presents its draft legislation to Parliament.

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.