Register of Foreign Ownership of Australian Assets:
The new Register of Foreign Ownership of Australian Assets (Register) came into effect on 1 July 2023.
The Register creates a variety of new reporting obligations for foreign investors, as well as Australian entities that become "foreign persons", in relation to certain interests held in Australian land, entities and businesses. These are in addition to the existing obligations to seek approval from the Treasurer for certain transactions under Australia's Foreign Acquisitions and Takeovers Act (Cth) (FATA).
Reporting obligations under the Register
On 1 July 2023, the proposed revisions to the Foreign Acquisitions and Takeovers Regulation 2015 (Cth) (Regulation) came into effect which amends the FATA to incorporate the new Register.
Summary of the key reporting obligations for the Register:
- Entities and businesses
- Acquisitions and starting a business
Taking an action for which FIRB approval was required or voluntarily obtained relating to an entity or business, including actions taken under an exemption certificate.
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- Changes in interest
Changes of 5% or more to an interest on the Register (continuing obligation).
This could include passive increases (eg. as a result of not participating in a buy-back) or passive decreases (eg. as a result of a dilutionary capital raise).
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- Disposals
Ceasing to hold an interest recorded on the Register, including:
- a disposal of all interests in the Australian entity or business;
- where the Australian entity ceases to be an Australian entity, or is wound up; and
- where the business activities of the Australian entity or business which were required to be notified cease to be carried on.
- Land
- Acquisitions (regardless of whether FIRB approval is required)
Acquisition of an interest in any of the following, regardless of value:
- freehold Australian land;
- lease of Australian land with a term likely to exceed 5 years;
- an Australian land corporation or trust; or
- a mining or production tenement.
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- Changes in interest
If a foreign person has previously notified an interest in Australian land to the Register, it must also report changes in the nature of the land (such as the relevant land changing from residential land to commercial land).
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- Disposals
Ceasing to hold an interest recorded on the Register, including:
- the termination or expiry of a lease reported to the Register; or
- disposal of all interests in the relevant land.
- Registrable water interests
Same reporting obligations as for the previous Register of Foreign Ownership of Water Entitlements apply.
- Other
- Becoming a foreign person
If a "foreign person" acquires an interest in an Australian entity such that the Australian entity becomes a "foreign person" (eg. because the foreign investor acquires an interest of at least 20% in the entity), the Australian entity must report its holdings of:
- any interest in an Australian entity or business that would have been a notifiable action or a notifiable national security action if acquired immediately after becoming a foreign person;
- any registrable water interest; or
- any interest in land that is of a kind that would have been required to be reported to the Register.
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- Ceasing to be a foreign person or FGI
An Australian entity which is a "foreign person" or "foreign government investor" (because of interests held in it by foreign investors) and has previously notified interests in Australian land, entities or businesses to the Register, must report when it ceases to be a "foreign person" or "foreign government investor" (eg. because a foreign investor's percentage interests in the Australian entity decreases).
When and how to provide notice to the Register
Where notice is required to be given to the Register, the notice must be given within thirty (30) days of the "registrable event day" (which varies depending on the type of event but is generally the date on which the notifiable event occurs or when the person is aware, or ought reasonably to have been aware that the relevant event has occurred).
Foreign investors and their authorised advisors can submit notices for the Register via the Australian Taxation Office's (ATO) new "Online Services" portal.
Foreign investors and their representatives need to apply for a myGovID, which is a digital identifier that is unique to an individual, in order to access the online service. Foreign investors need to register themselves to use this service and log in to complete a one-off registration before they can authorise a representative to act on their behalf.
No fee is payable for notifying a registered circumstance. However, civil penalties apply for a failure to give notice within the requisite 30-day period.
On commencement of the new Register, the following registers maintained by the ATO will be repealed and all information will be incorporated into the new Register:
- Register of Foreign Ownership of Agricultural Land;
- Register of Foreign Ownership of Water Entitlements; and
- Register of Residential Land.
All circumstances required to be reported in relation to these registers will instead be reported to the Registrar and recorded on the new Register.
For more information please see Australian Taxation Office:Click here
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
