What Is FIRB Approval?
FIRB approval is the formal clearance granted by Australia’s Foreign Investment Review Board that permits a foreign person to complete an acquisition of an Australian business or entity. The Foreign Acquisitions and Takeovers Act 1975 (as amended) requires foreign persons to notify FIRB and obtain no-objection notification before completing acquisitions that meet specified monetary or category thresholds.
The FIRB regime is administered by the Treasury and enforced by the Australian Taxation Office (ATO). In practice, the ATO conducts reviews on behalf of Treasury and advises the Treasurer, who holds the formal decision-making power to approve, prohibit, or impose conditions on foreign investments.
FIRB approval is a condition to closing in the vast majority of Australian M&A transactions involving a foreign buyer. Failure to obtain required approval before completing a transaction is a federal offence.
Who Needs FIRB Approval?
A “foreign person” under the Act includes:
- Individuals not ordinarily resident in Australia
- Corporations in which a foreign person (or group of associated foreign persons) holds 20% or more of the voting power or issued shares
- Corporations in which foreign persons collectively hold 40% or more
- Foreign governments and their related entities (sovereign wealth funds, state-owned enterprises), which face lower thresholds across all investment types
Australian citizens and permanent residents are not “foreign persons” and do not require FIRB approval regardless of where they reside.
FIRB Approval Thresholds
Thresholds determine whether a foreign person must notify FIRB before completing an acquisition. As at 2026:
Monetary Thresholds (FTA vs Non-FTA Countries)
| Investor type | Business acquisition threshold |
|---|---|
| FTA country investor (US, UK, EU, Japan, South Korea, etc.) | A$1.35 billion (2026 indexed threshold) |
| Non-FTA country investor | A$310 million |
| Foreign government entity (all countries) | A$0 (zero threshold — all acquisitions notifiable) |
| Sensitive sector acquisition (all investors) | A$0 or sector-specific reduced threshold |
Australia has Free Trade Agreements (FTAs) with the United States (AUSFTA), United Kingdom, EU, Japan (JAEPA), South Korea (KAFTA), China (ChAFTA), Singapore (SAFTA), ASEAN-Australia-New Zealand (AANZFTA), and others. Investors from FTA countries benefit from significantly higher general thresholds.
Zero or Reduced Thresholds: Sensitive Sectors
Certain sectors attract zero or significantly reduced thresholds regardless of investor nationality:
- Agricultural land and agribusiness: A$15 million cumulative threshold for agricultural land
- Media: Zero threshold (any foreign acquisition requires notification)
- Telecommunications: Zero threshold for companies with national security implications
- Critical infrastructure: Zero threshold (electricity, gas, water, ports, airports, banking, finance, data)
- Critical technology: Zero threshold where the target has capabilities in certain dual-use or national security-relevant technologies
- Defence and national security: Zero threshold
- Land: Residential land (zero threshold); commercial land (standard thresholds apply)
Healthcare note: Most mid-market Australian healthcare businesses do not trigger a sensitive sector zero threshold under current regulations, but healthcare businesses that hold significant patient data, supply healthcare services to the Commonwealth, or are classified as critical infrastructure face heightened scrutiny. The Department of Home Affairs’ national security review powers can apply to any transaction regardless of threshold.
The FIRB Review Process
Step 1: Submit Notification
The foreign buyer (or their legal advisors) submits a FIRB notification to the ATO’s foreign investment portal before completing the transaction. The notification includes:
- Transaction description and structure
- Target business details (ABN, sector, employee count, revenue, asset value)
- Buyer details (corporate structure, beneficial ownership, country of origin)
- National security information (critical infrastructure, sensitive data, government contracts)
- Transaction documents (SPA or heads of agreement)
A notification fee applies, scaled by transaction value from a minimum of A$2,000 to a maximum of A$1,045,000 for transactions above A$2 billion (2026 fee schedule).
Step 2: Statutory Review Period
The Treasurer has a 30-day statutory review period from the date of notification to issue a decision. This period begins when a complete notification is accepted.
In practice, the ATO can extend the review period by:
- 30-day extension: Issuing an “interim order” extending the review to 90 days from notification
- Further extension: Seeking a Ministerial extension for complex transactions (national security reviews, large transactions, sensitive sectors)
For standard mid-market commercial transactions from investors in low-risk jurisdictions, the effective review period is typically 30–60 days. For transactions involving:
- Investors from non-FTA countries (particularly China, Russia, and other countries of concern)
- Critical infrastructure or sensitive sector targets
- Government-linked buyers
- Transactions with potential national security implications
…the review period commonly extends to 90–120 days or longer.
Step 3: Outcome
The Treasurer can:
- Issue no-objection notification — Approval to proceed; the foreign buyer may complete the transaction
- Impose conditions — Approve subject to undertakings (e.g., maintain Australian headquarters, report on compliance, prohibit data transfer offshore, appoint an Australian director)
- Prohibit the acquisition — Where the investment is assessed as contrary to the national interest
Conditions are common for transactions in sensitive sectors. Prohibitions are rare but have been applied to acquisitions in critical infrastructure, agricultural land, and transactions involving investors with foreign government connections.
National Security Review: FIRB’s Expanded Powers
Since the 2021 amendments to the FIRB regime, the Treasurer has retroactive national security review powers to call in any transaction — even one that did not require FIRB notification, or one already completed — if it poses national security concerns. There is no time limit on this power for completed transactions (though a 10-year lookback applies in practice for most cases).
This expanded regime means that transactions in digital health, data infrastructure, critical technologies, or defence-adjacent services warrant legal advice on national security implications even when they fall below standard FIRB thresholds.
FIRB in the M&A Process
FIRB approval is typically addressed as a condition to closing in the share purchase agreement. The SPA will include:
- A condition that FIRB approval (no-objection notification) be obtained before closing
- Long-stop date provision: if FIRB approval is not obtained by the long-stop date, either party may terminate
- Obligations on the buyer to file the FIRB notification promptly (typically within 10 business days of SPA signing)
- Obligations on both parties to cooperate with FIRB requests for information
In competitive auction processes, FIRB risk is a material factor in bid evaluation. Sellers’ advisors assess each bidder’s FIRB risk profile — investor nationality, corporate structure, government linkages — as part of the evaluation process. A foreign buyer from a sensitive-origin country may be at a disadvantage relative to an FTA-country buyer offering equivalent price and terms.
FIRB vs Other APAC Foreign Investment Regimes
Australia’s FIRB regime is one of several foreign investment review frameworks across Asia Pacific. Dealmakers working across APAC cross-border M&A should be familiar with each jurisdiction’s equivalent:
| Jurisdiction | Regime | Regulator | Notes |
|---|---|---|---|
| Australia | FIRB / FATA 1975 | ATO / Treasury | Broad scope; national security call-in powers |
| Japan | FEFTA | MoF / sectoral ministries | Prior notification for investment in designated sectors |
| China | MOFCOM / SAMR | MOFCOM, NDRC | Approval required; significant for inbound investment |
| India | FDI Policy | RBI / MCI | Sector-specific automatic vs government route |
| New Zealand | OIO | Overseas Investment Office | Land and significant business acquisitions |
| Singapore | No FIRB equivalent | MAS / sectoral | MOH approval for healthcare; MAS for financial services |
| South Korea | MOFE | Ministry of Finance | Notification regime; sector restrictions |
Practical Implications for M&A Advisors
When advising on Australian M&A transactions with potential foreign buyers, consider FIRB implications early:
- Buyer universe assessment: Identify which potential bidders require FIRB notification and which are higher risk (government-linked, non-FTA, sensitive sector overlap)
- Timeline planning: Build FIRB review period into the transaction timeline; do not plan closing before FIRB clearance is likely in hand
- SPA drafting: Ensure condition precedent, long-stop date, and information obligations are clearly documented
- Regulatory due diligence: Identify any national security, critical infrastructure, or sensitive data factors that may elevate FIRB risk
- Conditions management: If conditions are likely (large transaction, sensitive sector, complex buyer), engage experienced FIRB counsel early to shape undertakings that are commercially workable
For healthcare M&A in Australia involving foreign buyers, see our detailed overview: Healthcare M&A in Asia Pacific.
For a broader overview of cross-border M&A regulatory complexity in APAC, see Cross-Border M&A in Asia.