New Single Register of Foreign Ownership of Australian Assets to Go Live
The last day to lodge residential FIRB applications and to make the existing registrations for agricultural land, water entitlements and residential land under the current Australian Tax Office system is 16 June 2023. There will be a 10 day disruption to the Australian Tax Office current system services, and the new online system is scheduled to go live on 26 June 2023.
On 1 January 2021 the Foreign Acquisitions and Takeovers Act 1975 (Cth) (Act) was amended to include Part 7A – 'The Register of Foreign Ownership of Australian Assets' (Register).
The Register is to record certain actions relating to interests in land, water, entities, businesses and other assets in Australia and is to be administered by the Australian Tax Office (ATO).
Since the introduction of Part 7A, the following separate registers have been established and administered by the ATO:
- Register of Foreign Ownership of Agricultural Land;
- Register of Foreign Ownership of Water Entitlements; and
- Register of Ownership of Residential Land.
The Treasury Laws Amendment (Measures for Future Instruments) Instrument 2023 (Instrument) (due to take effect from 1 July 2023) inserts a new Part 5B into the Foreign Acquisitions and Takeovers Regulation 2015 (Cth). The proclamation of the Instrument is expected to take place in June 2023.
What interests need to be registered
The 3 existing registers above will be replaced by a single combined Register. The notifications required by foreign persons under the Register will include the following:
- acquisitions of interest in land
- residential land;
- commercial land;
- agricultural land; and
- national security land;
(even if Foreign Investment Review Board (FIRB) approval was not needed for the acquisition);
- acquisitions of interest in mining, production and exploration tenements;
- acquisitions of registrable water interests;
- acquisitions of interest in entities or businesses (including national security) or starting an Australian business, where a foreign person (including a foreign government investor) takes an action that requires FIRB approval.
The registration process is separate from the application for any approval under the Act that may be needed.
When is registration to be done?
The interest must be registered in the Register in most cases within 30 days after foreign person takes the action, or the person becomes a foreign person.
Unlike an application for FIRB approval, there is no fee charged for the registration.
Registrations will be done online and will be accessed with MyGovID as the foreign person’s digital identity. The registration can be done by representatives, including law firms.
Change or cessation of interest
If the interest held by a foreign person is in relation to land, then any change in the interest must also be notified within 30 days of such change.
Other changes that need to be registered include:
- any change in the volume of water or share of the registrable water interest;
- after an entity or business has been registered on the Register, any change in the registrable interest by 5% or more.
A foreign person must also provide a notification within 30 days after the person ceases to hold the interest that has been registered, or ceases to be a foreign person.
The new online system is scheduled to go live on 26 June 2023. The last day to lodge residential FIRB applications and to make the existing registrations for agricultural land, water entitlements and residential land under the current ATO system is 16 June 2023. Following this, there will be a 10 day disruption to the ATO current system services, and the new online system is scheduled to go live on 26 June 2023.
Civil penalties under the Act will apply if there is a breach of the registration requirement.
The current civil penalty is 250 units, which equates to AUD$68,750.
A Guidance Note on the Register is expected to be issued in the near future, which should provide further details.
We will provide an update when the Guidance Note becomes available.
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