United Kingdom investors subject to higher foreign investment monetary threshold from 31 May 2023 for certain investments

As part of the negotiation of the Australia-UK Free Trade Agreement (FTA), Australia committed to encouraging UK investment by raising the monetary threshold for UK investments that require screening by the Foreign Investment Review Board. The FTA entered into force on 31 May 2023.

For certain "actions" under the Foreign Acquisitions and Takeovers Act 1975 (Cth), a foreign investor will only need to notify the Treasurer of their investment if the investment meets the applicable monetary threshold. The threshold depends on the type of investor and the action proposed to be taken by that investor.

Under the Foreign Acquisitions and Takeovers Regulation 2015 (Cth), private investors from certain FTA partners (referred to as "agreement country or region investors") are subject to a higher monetary threshold for certain investments. The higher threshold applies to investments in entities or businesses, and investments in developed commercial land, where the investor is an enterprise, national or resident of a country that is an "agreement country or region". The higher threshold does not apply to investments made by "foreign government investors" or investments by any foreign investor in a "sensitive business" or an agribusiness.

The Regulations have been amended to include the United Kingdom as an "agreement country or region" to which the higher monetary threshold applies. This amendment applies in relation to actions taken on or after 31 May 2023. To be eligible for the higher monetary threshold, the immediate acquirer must be an entity formed in the United Kingdom. An investor acquiring through a subsidiary incorporated in another jurisdiction will be subject to the relevant thresholds of the subsidiary’s jurisdiction.

The higher monetary threshold for private investors from FTA partner countries (now including the UK), in relation to the relevant types of investments outlined above, is currently AUD$1,339 million. The monetary thresholds are published on the FIRB website and are indexed annually on 1 January