Foreign investment framework – 2017 Legislative Package

Tweaking Australia’s foreign investment framework.

On 1 December 2015, the most significant changes to Australia’s foreign investment framework in over 40 years were introduced. The reforms provided for stronger enforcement of the rules, a better resourced system and clearer rules for foreign investors.

12 months later the Government has recognised that there were unintended consequences and there are opportunities for reducing the regulatory burden. The Treasury has issued a consultation paper and is seeking submissions on 5 issues. They are:

  1. Residential land: Some of the settings may incentivise non‑compliance and may have distortionary affects.
  2. Non‑vacant commercial land: Some lower sensitivity investments are still subject to the framework. This is inconsistent with the intent of the 2015 reforms to remove low sensitivity cases from the system.
  3. Low sensitivity business investment: The framework still casts a broad net in relation to some of the investments that must be notified to the Treasurer. This results in some relatively low value and low sensitivity investments being captured. The introduction of fees in 2015 has further reinforced the concern about the level of regulatory burden for such investments.
  4. Fees: The fees framework can be difficult for stakeholders to apply and burdensome to administer. There are also situations where the size of the fee varies with the form of the investment.
  5. Miscellaneous technical issues and ideas for further reform: There is an opportunity to address technical issues in the legislation that are mostly minor or machinery in nature as well as for stakeholders to provide further reform ideas not covered in the paper.

The closing date for submissions is 29 March 2017. Submissions can be emailed to ForeignInvestmentConsultation@treasury.gov.au.

The consultation paper is available here.

Post by John Kell

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