Australia has long been one of the world's most attractive destinations for foreign investment. For the quarter ending 31 March 2026, FIRB approved 311 commercial investment proposals with an aggregate value of AUD $79.7 billion — up from AUD $68.2 billion in the previous quarter, with a median assessment period of 35 days and 46% of commercial proposals decided within 30 days.
But the framework governing how foreign investors access the Australian market has just undergone its most significant overhaul in years. On 19 May 2026, the Australian Treasurer announced extensive reforms to the Foreign Investment Review Board (FIRB) framework, building on changes first introduced in May 2024. The reforms are now being implemented in stages — and understanding them is essential for any foreign company planning to expand into Australia in 2026 or 2027.
As Treasurer Dr Jim Chalmers described it, the framework is becoming simultaneously "stronger where risks are high and much faster where risks are low."
This guide explains what changed, what it means in practice, and what French and European companies expanding into Australia should do differently as a result.
Definition — FIRB (Foreign Investment Review Board) FIRB is the Australian government body that reviews and advises the Treasurer on proposals by foreign persons to invest in Australia. Most foreign investments above certain monetary thresholds require FIRB approval — a "no objection" notification from the Treasurer — before the transaction can be completed. The legal framework is the Foreign Acquisitions and Takeovers Act 1975 (FATA).
FIRB applies to foreign persons or entities acquiring interests in Australian businesses, land, or entities above applicable monetary thresholds. A foreign person or entity making an acquisition that requires approval under the FATA must apply to FIRB for a notification that the Treasurer has "no objection" to the acquisition before completion.
For most foreign companies establishing a wholly owned Australian subsidiary from scratch — rather than acquiring an existing business — FIRB is generally not required. However, any acquisition of shares in an existing Australian company, purchase of commercial land, or investment in a sensitive sector triggers FIRB review regardless of size in some cases.
Current monetary threshold for non-sensitive business acquisitions: AUD $347 million — and the 2026 reforms propose to raise this threshold provided the transaction does not involve a free trade agreement investor, government investors, or a sensitive sector.
Substantial reforms to Australia's foreign investment framework were announced as part of the 2026–27 Australian federal budget, building on reforms first announced in 2024 which sought to streamline approvals for lower-risk investments while increasing scrutiny of transactions involving sensitive sectors.
The 2026 package has two clear and distinct objectives that pull in opposite directions:
For lower-risk investors: reduce friction, eliminate unnecessary conditions, speed up approvals, broaden exemptions and cut reporting burdens.
For higher-risk investors: expand the government's powers to scrutinise, condition, block and reverse approvals — with stronger enforcement, broader anti-avoidance rules, and new tools to capture non-ownership forms of control.
The reforms effectively split investments involving foreign investors into two camps: low-risk and high-risk. Which camp your investment falls into will determine your experience with the Australian foreign investment process going forward.
The clearest way to understand the 2026 reforms is as a deliberate calibration of regulatory effort. A central theme of the reforms is reducing friction for capital assessed as lower risk — familiar, transparent and predictable capital is to be processed more quickly and with greater certainty. At the other end of the spectrum, the reforms introduce more focused scrutiny where genuine risks to national security or the national interest exist.
|
Dimension |
Low-risk track |
High-risk / sensitive track |
|---|---|---|
|
Decision timeline |
30 days (target from Jan 2027) |
Extended — no fixed target |
|
Mandatory notification |
Reduced or removed for some transactions |
Expanded to new sectors |
|
Conditions |
Streamlined, unnecessary conditions removed |
Tailored, potentially more onerous |
|
Exemption Certificates |
Broader availability, more flexible terms |
N/A |
|
Approval validity |
Extended from 12 to 24 months |
Case by case |
|
Enforcement |
Standard |
Enhanced powers, higher penalties |
Eligibility for the fast-track pathway is subject to a range of criteria, including that the investor has received foreign investment approval within the previous 24 months, has no record of non-compliance or character concerns, and is undertaking a straightforward investment in a non-sensitive sector with no national interest sensitivities.
More specifically, to be considered low-risk, the applicant must have received a foreign investment approval within the last two years, cannot be subject to extrajudicial direction, and must have a clean compliance record.
Transactions that will no longer require mandatory notification under the proposed legislative changes include:
Exemption Certificates (ECs) — now broader and more flexible:
Exemption certificates will be refocused on repeat, low-risk investors and may provide broader relief from foreign person status, tracing and reporting requirements, subject to conditions. The Exemption Certificates regime will be expanded so that certain low-risk investors may be exempt from aspects of the FIRB framework altogether, including potentially not being treated as a foreign person and being exempt from certain reporting obligations.
Investors will be able to ask for ECs that switch off or adjust the operation of concepts such as foreign government investor (FGI) status, foreign personhood, tracing, associate rules, and reporting obligations. However, one important caveat: the fee structure for the expanded EC powers will be developed to reflect the significant benefit to investors — meaning broader ECs may come at materially higher cost.
Approval validity extended:
The default validity period for approved transactions will increase from 12 to 24 months, with flexibility to vary periods on a case-by-case basis. This is particularly welcome for larger or staged transactions that often needed extensions under the old 12-month window.
Pro tip for companies making their first Australian investment:: if this is your first FIRB approval in Australia, you will not yet qualify for the low-risk fast-track. The pathway requires a prior approval within the last 24 months. Plan your first application with sufficient lead time and seek specialist advice — getting a clean approval the first time is what sets you up for faster processing on future transactions.
The Australian Government continues to apply heightened scrutiny to investments in sensitive sectors, particularly critical minerals and critical infrastructure, to safeguard the national interest.
The 2026 reforms significantly expand the government's ability to designate sectors as sensitive and act swiftly when risks emerge. New rules will allow the Treasurer to expand mandatory notification requirements rapidly — investors in or adjacent to critical infrastructure, critical minerals, critical technology and data centres should expect dynamic, changing FIRB requirements going forward.
Currently identified high-scrutiny areas:
No specific sectors have been named yet in the legislative framework, and the Government says it will consult government and industry on the details. However, legal experts widely expect investments in critical minerals entities and businesses, and possibly data centre businesses and land, to become subject to mandatory notification and approval requirements.
What higher scrutiny means in practice:
Investments in sensitive sectors now face heightened scrutiny, with additional government resources directed to assessing proposals and managing national security risk. Where risks are identified, tailored conditions may be imposed to mitigate specific concerns.
Applications for transactions in sensitive sectors or with high-risk characteristics will be likely to take longer to process, although greater resources are to be made available to FIRB.
Some elements of the FIRB reforms took immediate effect from 1 July 2026 — without waiting for legislation.
Review of existing approval conditions:
From 1 July 2026, Treasury commenced a review of existing FIRB approvals to update or remove unnecessary or duplicated conditions. This initially focuses on tax conditions but over time is expected to apply more broadly.
These conditions — which sometimes require investors to report annually on tax law compliance for the life of the investment — can be burdensome, and the possible deletion of such conditions is welcomed. Outside tax, conditions that duplicate other regulatory regimes or whose reporting burden is disproportionate to their value may also be removed or modified.
Streamlining the Register of Foreign Ownership:
The Government will streamline the Register of Foreign Ownership of Australian Assets by simplifying reporting requirements and reducing duplication in data collection. The headline change is that investors will no longer be required to report acquisitions of interests in commercial land, businesses or entities to the Register separately — realised acquisitions approved through Treasury's system will instead be registered through that same system, eliminating duplicative data entry.
Enhanced Exemption Certificate powers:
The Treasurer's powers to issue Exemption Certificates have been broadened with effect from 1 July 2026, allowing more flexible terms that can switch off or adjust concepts like FGI status, tracing rules and reporting obligations for qualifying investors.
The most significant operational change — the 30-day decision target — takes effect from 1 January 2027.
From 1 January 2027, the Government will have a target of 30 days for reaching a decision on all low-risk applications — meaning an applicant will either receive a decision clearing the transaction or be informed as to why a further assessment is required, within 30 days of submitting a completed application.
Important caveats to the 30-day target:
Legislative changes:
No exposure draft legislation has been released and no timeframe specified. Given the breadth and complexity of the proposed changes, exposure draft legislation is unlikely before late 2026 at the earliest. Investors should monitor the consultation process and engage with draft legislation when it becomes available.
For the vast majority of foreign SMEs establishing an Australian subsidiary from scratch, the 2026 FIRB reforms have limited direct impact. Creating a new Pty Ltd company does not generally trigger FIRB requirements because a new entity is being established rather than an existing Australian business being acquired.
FIRB becomes relevant for foreign companies in the following scenarios:
Scenario 1: Acquiring shares in an existing Australian company Any acquisition of a substantial interest in an existing Australian business above the monetary threshold requires FIRB approval. Under the 2026 reforms, if this is your first Australian investment, budget for standard processing time — the 30-day fast track is only available to investors with an existing clean approval history.
Scenario 2: Purchasing commercial land or property Commercial land acquisitions by foreign persons are subject to FIRB review regardless of value in some cases, particularly in sensitive locations. The 2026 reforms maintain scrutiny here.
Scenario 3: Investing in or partnering with a business in a sensitive sector If your Australian expansion involves critical minerals, technology, defence-adjacent activities, data infrastructure, or other emerging sensitive sectors, expect deeper review, potential conditions, and longer timelines regardless of your risk profile.
Scenario 4: Repeat investors with a clean FIRB history If your company or group has received FIRB approval within the last 24 months with no compliance issues, the 2026 reforms work in your favour. You may qualify for the 30-day fast track from January 2027 and may be eligible for broader Exemption Certificates that reduce your future compliance burden.
Practical steps for European companies planning Australian expansion in 2026–2027:
For companies entering Australia for the first time, the FIRB framework, even in its streamlined form, adds a layer of regulatory complexity that is easy to underestimate. The difference between a smooth approval and a lengthy review often comes down to how the application is prepared, how the investor structure is presented, and whether the right questions are asked before signing.
Expandys has been supporting international companies expanding into Australia for more than 17 years. Our Sydney-based team works alongside specialist Australian legal and tax advisors to help clients:
Most of our clients who go through the Australian subsidiary creation process — from initial assessment through ASIC registration, FIRB guidance where applicable, and tax compliance setup — are fully operational within 4 to 8 weeks.
Speak to our Australia team about your expansion project →
Download our free Australian Company Setup Checklist → A step-by-step PDF covering every registration, compliance deadline and cost for 2026 — including a FIRB applicability section.
In most cases, no. Creating a new Proprietary Limited (Pty Ltd) company in Australia from scratch does not require FIRB approval — you are establishing a new entity, not acquiring an existing Australian business or land. FIRB applies primarily to acquisitions of existing businesses, shares in Australian companies above applicable thresholds, purchases of commercial or agricultural land, and investments in sensitive sectors. However, if your planned Australian operations involve any of these elements alongside a new entity, specialist advice is recommended to confirm your position under the 2026 reforms.
From 1 January 2027, the Australian Government has a target of deciding all low-risk foreign investment applications within 30 days. This means FIRB will either issue a decision clearing the transaction or inform the applicant why further assessment is required within that period. To qualify, the investor must have a prior FIRB approval within the last 24 months, a clean compliance record, no record of non-compliance or character concerns, and must be investing in a non-sensitive sector with no national interest sensitivities. The 30-day target does not apply to Exemption Certificate applications or transactions requiring ACCC clearance.
Critical minerals, critical infrastructure (ports, airports, energy, telecommunications, water), data centres, defence-adjacent businesses, and emerging technology sectors currently face the highest level of scrutiny under the 2026 FIRB reforms. The 2026 reforms also give the Treasurer new powers to expand mandatory notification requirements to additional sensitive sectors rapidly — without needing to amend legislation — meaning the list can change quickly. European companies investing in or adjacent to any of these sectors should engage specialist FIRB advisors early in the planning process, well before signing any commercial agreements.
Not automatically. However, qualifying investors may benefit from the expanded Exemption Certificate (EC) regime, which can provide broader exemptions from aspects of the FIRB framework, including, in some cases, exemptions from being treated as a "foreign person" for certain transaction types. Eligibility depends on factors such as the investor's governance, compliance history, and the nature of the proposed investment.
Investment thresholds and eligibility may differ depending on Australia's free trade agreements with certain countries. For example, investors from countries such as the United States, Chile, and New Zealand may benefit from higher monetary thresholds for some non-sensitive business acquisitions, while investors from countries without applicable agreements are generally subject to the standard thresholds. Companies should confirm the rules applicable to their jurisdiction before proceeding with an investment.
The consequences are serious and getting more severe. Earlier in 2026, the Federal Court imposed AUD $14 million in penalties against two foreign investors who failed to comply with disposal orders — the first enforcement action of its kind. Under the 2026 reforms, the government is expanding its enforcement toolkit: new infringement notices for a wider range of contraventions, stronger disposal and prohibition order powers that can take effect more rapidly, and a proposed public register of non-compliance. Anti-avoidance provisions are also being tightened to capture structures that attempt to circumvent FIRB requirements through non-ownership arrangements such as offtake agreements and lending structures.
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