Foreign Ownership Register in Australia - Introduction
On 1st July 2023, Australia ushered in a comprehensive reform with the activation of the Foreign Ownership Register, under Part 7A of the Foreign Acquisitions and Takeovers Act 1975 (Cth) (FATA). This new register has absorbed and expanded upon the functionalities of previous registers maintained by the Australian Taxation Office (ATO), marking a significant shift in how foreign ownership of Australian assets is documented and regulated.The Consolidated Register
The Foreign Ownership Register amalgamates several previously separate registers into a unified system. Notably, it encompasses the Agricultural Land Register and the Water Register, both previously under the 2015 Register of Foreign Ownership of Water or Agricultural Land Act (Cth) (Old Register Act), along with the register for foreign ownership of residential land. However, registers pertaining to critical infrastructure assets and foreign media ownership remain independently managed by the Cyber and Infrastructure Security Centre and the Australian Communications and Media Authority, respectively.Expanding the Scope of Notification
The broadened scope under Part 7A significantly enhances the transparency around foreign investments in Australia, imposing new reporting and compliance obligations on foreign investors. Among the critical updates are the requirements for notifying certain acquisitions of interests in Australian entities, businesses, and all types of Australian land.Notification Requirements
Acquisitions of Registrable Interests
From 1st July 2023, foreign persons must notify acquisitions of specific interests in Australian assets, including interests in entities, businesses, and land. Notices for these acquisitions should be submitted within 30 days, except for registrable water interests, which have a 30-day window post-financial year-end.Change in Foreign Status
If a holder of a Registrable Interest becomes a foreign person post-acquisition, notification is required.Changes in Registered Circumstances
Various changes, such as disposal of interests or significant modifications in the nature of the interest, necessitate notification within 30 days, with specific provisions for registrable water interests.Other Key Takeaways
- The reporting obligations introduced by the Foreign Ownership Register are primarily prospective, affecting events from 1st July 2023 onwards. However, specific conditions apply to interests acquired before this date, particularly concerning changes in registered circumstances and transitions to foreign person status post-1st July 2023.
- Notices must be submitted via the ATO’s online platform, as detailed in the Foreign Acquisitions and Takeovers (Register Notices) Data Standard 2023 (Cth).
- No fees are associated with the submission of notices to the Foreign Ownership Register.
- Failure to comply with the notification timeline could result in significant civil penalties.
- Special provisions exist for the estates of deceased foreign persons or corporations under liquidation, mandating that executors, administrators, or liquidators fulfill the notification requirements.
- Certain exemptions apply to the notification requirement, aligning with acquisitions wholly exempt from FATA.