Rules and Regulations - Foreign Investment in Australia

June 11, 2008 by Mira

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I have made quite a lot of foreign investments in Australia. The thought of making foreign investment in Australia came to my mind last year when I saw news, blogs all talking about Australia playing a leading role in international property investment. One of the reasons for this being, Australia is taking second lead role of being populated with migrants from other countries. When I was about to start my foreign investments in Australia, I had no knowledge in that. But the process I went through got me highly interested in this subject.

First of all, for making foreign investments in Australia, a foreign investment approval is vital. But foreign investment approval depends on what a person wishes to invest in. I went for residential real estate investments and some investments in commercial real estate also. For making these investments, I went through the process of foreign investment approval. In certain cases, even acquisitions of shares or other assets of businesses would require foreign investment approval.

All these depend on the size and type of investment a foreign person is willing to make in Australia. The approval for getting a brand new residential property is much simpler provided all rules and regulations are followed. Thus, the primary rule a foreign national must clearly have in mind while making foreign investments in Australia is that unless they have permanent resident status or meet another exemption, it is vital to get prior FIRB approval before making any investments in Australia.

While undergoing this process, I had a doubt whether it is essential to get FIRB approval for transfer of property even if a property is being left by a citizen in Australia to his close relative who is a foreigner to Australia. When I had this query I immediately mailed officers at FIRB about this and the reply I got was that the property in this case would get transferred easily without even notifying the board. This rule holds even if a foreign national is married to a citizen of Australia and makes a joint investment in Australia. After submitting the papers for approval to the board, I got the approval within 20 days as the board is required to make a decision within 30 days of receiving an application though in certain situation it might take another ten days more. Thus it is sure that one would get the reply from FIRB within forty days of submitting their application to FIRB.

The commercial property foreign investment I made in Australia was less than AUD50 million and so I didn’t need to go through the process of FIRB approval. The FIRB approval for foreign investors on commercial properties is essential only if the amount exceeds the above value or if the amount exceeds the approved amount by FIRB. Once I decided to make foreign investments in Australia, I gathered sound knowledge on rules and regulations related to this from various sources. Then I selected the property for foreign investment in Australia. After this step, I sought legal advice before entering a contract to buy Australian property. This step is important to avoid hurdles and to get us clear about the laws and about the property.