Australian review of foreign investment approval conditions underway

Under Australia’s foreign investment laws, certain types of foreign investment are subject to assessment by the Treasury’s Foreign Investment Review Board (FIRB). The government will block foreign investment where the investment is contrary to Australia’s national interest or national security. However, the majority of foreign investments are approved, often with conditions attached to the approval.

The Australian Treasury has now opened a review of the conditions it can impose on investment approvals, with a view to identifying those conditions that are ineffective, duplicative, or could be modernised to better reflect current business practices and technologies. It has invited businesses to share their views on the matter. Its consultation (7-page / 260KB PDF) is open until Tuesday 15 September.

The Treasury said: “Under the foreign investment framework, there is a presumption that foreign investment proposals should proceed unless they are found to be contrary to the national interest or to national security. Conditions are the mechanism through which the government can allow foreign investment to proceed while managing identified risks.”

“A range of conditions may be applied to mitigate risks, including those relating to taxation, national security, economic and community impacts and other matters relevant to the national interest. These include tax conditions, board and governance arrangements, land development requirements, obligations relating to sensitive land or facilities, the management of sensitive data and infrastructure, and reporting requirements. Conditions play an important role in protecting Australia’s national interest. However, it is important to ensure they remain necessary, effective and fit for purpose over time. Some historical conditions may no longer align with contemporary circumstances, creating ineffective or duplicative compliance obligations,” it said.

“This review will help ensure the foreign investment framework remains efficient while maintaining appropriate safeguards,” it added.

The review is expected to conclude in the middle of 2027. It forms part of a broader package of measures focused on reforming Australia’s foreign investment framework, which was announced at the 2026-27 Budget.

“For foreign investors, the consultation provides an opportunity to highlight approval conditions that may be outdated, overly burdensome, or unnecessary because they duplicate compliance obligations under general Australian laws,” said Sydney-based Joni Henry of Pinsent Masons.

Andrew Fisken, of Pinsent Masons in Melbourne, added: “Feedback will help the Australian government’s goal of improving the current conditions process so that potential risks can be mitigated in a more targeted and proportionate manner,”