Australia, like other nations, has been impacted significantly by the COVID-19 pandemic. The country has put in place strong public health measures to slow the spread of the virus, and introduced economic stimulus packages to support Australian businesses and consumers.
Despite these challenging circumstances, Australia remains open for business and continues to welcome international investors and business partners. Our country’s resilience, open business settings and record of strong economic performance over the past 28 years mean Australia is likely to recover well, providing a safe and stable environment for investment.
Changes to Australia’s foreign investment framework
Australia welcomes foreign investment consistent with our national interest.
On 5 June 2020, the Australian Government announced major reforms to the Foreign Acquisitions and Takeovers Act 1975.
These reforms ensure Australia’s foreign investment framework keeps pace with emerging risks and global developments, including similar changes to foreign investment regimes in comparable countries.
The changes also strengthen compliance measures, streamline approval processes and enhance administrative procedures.
The key reforms include:
- A new national security test for foreign investors, who will be required to seek approval to start or acquire a direct interest in a ‘sensitive national security business’ – regardless of the value of the investment
- A time-bound ‘call in’ power enabling the Treasurer to review acquisitions that raise national security risks
- A ‘last resort’ review that provides the ability to impose or vary conditions and in extraordinary circumstances order disposal on national security grounds
- Stronger and more flexible enforcement options, including expanding infringement notices and higher civil and criminal penalties
- Streamlining approval for passive investors and investments into non-sensitive businesses.
These reforms will come into effect on 1 January 2021 after legislation is introduced into the Australian Parliament later this year.
Further detail on the reforms is available in the summary booklet and on the Treasury website.
Read the media release from the Australian Treasurer, the Hon. Josh Frydenberg.
A high-resilience economy
During this uncertain time, Australia continues to offer a safe, stable and welcoming environment for international investors.
Australia’s stable economic growth, strong institutions and open markets attract high levels of investment. In 2018, Australia was the eighth largest recipient of FDI inflows worldwide, ahead of India, Canada, France and Germany. The European Union and North America contribute almost half of all FDI in Australia, with solid capital inflows from China, Japan, Hong Kong and ASEAN member nations.
The country’s economic resilience is testimony to sound management, longstanding trade and investment ties with major markets and a global reputation as a reliable exporter of natural resources and agricultural commodities. A mature financial services sector with assets of around A$8.5 trillion provides a significant source of local capital.
Support for Australian businesses
The Australian Government has acted swiftly to cushion the economic impact of the coronavirus. A total of A$320 billion is being injected into the economy to support Australian businesses and workers during the outbreak, and help ensure economic activities resume quickly once the pandemic recedes.
For detailed information on Australian Government support to businesses, visit www.business.gov.au.
For detailed information on the Australian Government’s economic response to the coronavirus, visit www.treasury.gov.au.
Thanks to high rates of technology adoption, many Australian businesses are operating as well as conditions allow.
Austrade encourages buyers that have an existing commercial relationship with an Australian supplier to contact suppliers directly to confirm supply and renew orders.
The Australian Government has launched the International Freight Assistance Mechanism to assist Australian agricultural and fisheries businesses to export their produce to key markets in Asia and the Middle East. This will help ensure high-value, in-demand Australian exports flow back to key destinations as markets recover and reopen. Return flights will bring back medical supplies, medicines and equipment.
Where Australia is temporarily unable to offer a good or service, Austrade is supporting exporters and customers to maintain links so that business can bounce back as the COVID-19 pandemic recedes.
Austrade supports investors and customers worldwide. Our global network of more than 80 offices can provide the latest information and advice on investing in and doing business with Australia.
Please contact the Austrade representative in your region for assistance.