Can a Foreigner Buy Business in Australia?
Are you an international or foreign citizen looking to buy a business in Australia?
The Australian government welcomes international investment as it helps build the Australian economy and supports economic growth and prosperity. This article provides relevant links to the Australian Government websites that provide the guidelines for purchasing a business or making an investment in Australia.
Please visit these government sites and the Foreign Investment Review Board before purchasing a business if you are not an Australian citizen or resident. It's important that all regulations are abided by to save yourself ending up in a troublesome financial or business situation.
Foreign Investment Review Board
This is the section of the Australian Government that examines the proposal of a foreign person to invest in Australia and makes reccomendations to the Treasurer. They abide by the 'Foreign Acquisitions and Takeover Act 1975'. The Australian government welcomes foreign investment and has documents and ACTs that dictate what is allowed, please read this information on the below links and contact the Foreign Investment Review with any questions you may have:
Australian Foreign Investment Policy
Foreign Acquisitions and Takeovers Act 1975
Foreign Investment Review Board
Under the Foreign Acquisitions and Takeovers Act 1975, a foreign person is:
- a natural person not ordinarily resident in Australia;
- a corporation in which a natural person not ordinarily resident in Australia or a foreign corporation holds a controlling interest (that is, a holding of 15 percent or more);
- a corporation in which 2 or more persons, each of whom is either a natural person not ordinarily resident in Australia or a foreign corporation, hold an aggregate controlling interest (that is, a total holding of 40 percent or more);
- the trustee of a trust estate in which a natural person not ordinarily resident in Australia or a foreign corporation holds a substantial interest; or
- the trustee of a trust estate in which 2 or more persons, each of whom is either a natural person not ordinarily resident in Australia or a foreign corporation, hold an aggregate substantial interest.
- A substantial foreign interest occurs when a single foreigner (and any associates) has 15 per cent or more of the ownership or several foreigners (and any associates) have 40 per cent or more in aggregate of the ownership of any corporation, business or trust.
- A US investor is a national or permanent resident of the United States of America; a US enterprise; or a branch of an entity located in the United States of America and carrying on business activities there.
Source: http://www.firb.gov.au/content/other_investment/other_investment.asp
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Some information from the Australian Foreign Investment Policy (June 2010) about buying a business in Australia:
Who Needs to Apply to the FIRB for approval? (this is just a summary of the information, not advice, please read full document):
- "All foreign government investors must notify the Government and get prior approval before making a direct investment in Australia, regardless of the value of the investment."
- "Foreign persons should notify the Government and get prior approval before acquiring a substantial interest in a corporation or control of an Australian business that is valued above $248 million. They also need to notify for prior approval if they wish to acquire a substantial interest in an offshore company whose Australian subsidiaries or gross assets are valued above $248 million"
- "The exception is for New Zealand investors and United States investors, where the $248 million threshold applies only for investments in prescribed sensitive sectors. A $1,078 million threshold applies to New Zealand and United States investment in other sectors."
- "All foreign persons, including New Zealand investors and United States investors, need to notify the Government and get prior approval to make investments of 5 per cent or more in the media sector, regardless of the value of the investment."
- "Foreign persons should also notify for review, if they have any doubt as to whether an investment is notifiable."
What is the Government Looking For?
"The Government is making sure investments are not contrary to the national interest. If an investment is contrary to the national interest, the Government will intervene. This occurs infrequently. What is contrary to the national interest cannot be answered with hard and fast rules. Attempting to do so can prohibit beneficial investments and that is not the intention of our regime. Australia’s case-by-case approach maximises investment flows while protecting Australia’s national interest"
More Enquiries or Information:
General enquiries: Fax: 02 6263 2940 +61 2 6263 2940 From overseas: Phone: 02 6263 3795 +61 2 6263 3795 Email: firbenquiries@treasury.gov.au firbenquiries@treasury.gov.au Compliance hotline: Email: FIRBCompliance@treasury.gov.au FIRBCompliance@treasury.gov.au
We find a number of international buyers contact us to find information on whether they can purchase a business in Australia. We always send them to the FIRB for more information so they can check on government regulations before making a decision. By posting this information I hope it helps foreign investors find the information they need.
Are you an international/foreign citizen that has purchased a business in Australia? How did you find the process? Did you need to apply for approval?
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