Key takeaways
The Australian government has confirmed that the new Register of Foreign Ownership of Australian Assets ("Register") will take effect on 1 July 2023.
Expanding on the previous registers for water interests and agricultural or residential land, the new Register records foreign interests in a broader range of Australian land, entities, businesses and assets, with significant potential penalties for non-compliance.
Regulations clarifying the scope of the Register have been finalised and are broadly similar to the draft proposed by the government, except that the previously narrow range of interests in land requiring registration has been expanded (see below). Otherwise, the details outlined in our previous alert have not changed.
In particular, the new registration obligations are not retrospective, but will only apply to new events from 1 July 2023, with two exceptions:
- Interests in Australian water, agricultural or residential land, media assets and critical infrastructure were already registrable before the commencement of the new Register and continue to be registrable.
- After commencement of the Register, if a person becomes a "foreign person" while holding relevant Australian interests or carrying on a "national security business", those circumstances will be registrable regardless of when the interests were acquired or the business started.
Further detail
See our previous alert for details of the new registration requirements. However, the draft regulations only required the following interests in land to be registered:
- A legal interest in Australian land which is:
- A freehold interest
- A long-term lease of commercial or residential land
- An interest in a mining or production tenement
- A legal or equitable interest in a long-term lease of agricultural land.
The final regulations also require registration of the following legal interests in Australian land:
- An interest in a security in an entity that owns Australian land, which entitles the holder to occupy a dwelling on the land ("company title")
- An interest in a security in an Australian land entity (i.e., a corporation or trust which has a majority of its value in Australian land) or a share in a corporate trustee of such a trust.
Acquisitions and other events that require registration generally need to be registered within 30 days. There is no fee for registration, which must be done through the Australian Taxation Office's new Online services for foreign investors portal. This requires the use of the government's myGovID app for identity verification (see these instructions on setting this up).
Failing to register a relevant event on time in the correct form may incur a penalty of 250 penalty units per day (currently equal to AUD 68,750, but this will increase on 1 July 2023).
Foreign persons who acquire relevant Australian interests, as well as some Australian entities that could become "foreign" due to ownership changes, may need to implement additional compliance processes to ensure they satisfy the new requirements, particularly in light of the potential penalties for non compliance.
Australia's foreign investment laws, including these new registration requirements, are technical and complex. Legal advice should always be sought on the requirements that apply in your circumstances – we would be happy to assist.
