The Australian Government has made new regulations that will have the effect of doubling the filing fees for applications for foreign investment approval through the Foreign Investment Review Board (FIRB), with the new application fees effective on and from Friday 29 July 2022.
The Foreign Acquisitions and Takeovers Fees Imposition Amendment (Fee Doubling) Regulations 2022 (Cth) (Fees Regulations) were made on 21 July 2022 and will double the fees payable for applications for foreign investment approval (FIRB Approval). The Fees Regulations will commence on 29 July 2022 meaning that filing fees for applications for FIRB Approval lodged on and after this date will be assessed based on the new fee scale.
What has changed?
The Australian Government committed to increasing foreign investment fees (and penalties) prior to the 2022 federal election as part of its election budget strategy. On 21 July 2022, the Government acted on its promised fee increase by introducing the Fees Regulations. The Fees Regulations will apply to double the fees payable for applications for FIRB Approval lodged under the Foreign Acquisitions and Takeovers Act 1975 (Cth) on or after 29 July 2022. The Fees Regulations also implement a $1 million fee cap (indexed annually) and make amendments to the indexation provisions of the rules regarding foreign investment fees.
The table below demonstrates how the changes to foreign investment fees will apply:
| Fee value prior to 29 July 2022 (A$) |
Fee value from 29 July 2022 (A$) |
| $2,000 |
$4,000 |
| $6,600 |
$13,200 |
| $13,200 |
$26,400 |
| $28,300 |
$56,600 |
| $522,500 |
$1,045,000* |
*The Fees Regulations implement a fee cap of $1 million (as indexed on an annual basis) meaning that in practice the maximum possible fee on commencement of the new fee scale will be $1,045,000 which will be indexed annually. The minimum fee payable will increase from $2,000 to $4,000.
To illustrate the impact of the fee increase, the current fee for a single action by a foreign person to acquire an interest in Australian residential land for $3 million is $26,400. The fee payable for the same transaction under the new fee scale on and from 29 July 2022 will be $52,800.
What does the fee increase mean?
The doubling of foreign investment screening fees may have significant cost implications for foreign investment into Australia. The rules for calculating fees can be complex and it is important for investors to identify the correct fee at the time of lodgement of foreign investment approval applications to ensure the correct fee is paid and avoid delays in processing of the application.
The impending fee increase also means foreign investors should consider their positions in regard to any contemplated transactions that may require FIRB Approval in light of the impending increase in the cost of seeking FIRB Approval.
Each transaction is unique. Contact us for advice on how to navigate Australia's detailed foreign investment screening rules.
