Foreign Investment Rules

If a foreign company wishes to carry on business in Australia it must be registered under Part 5B.2 of the Corporations Act 2001 (Cwlth) administered by the Australian Securities and Investment Commission. Information on registering a company under the Corporations Act may be accessed from the Commission’s website (external site)

The following information is extracted from the Department of Resources, Energy and Tourism publication, Mineral and petroleum exploration and development in Australia: a guide for investors.

The Australian Government’s foreign investment guidelines recognise the substantial contribution that foreign investment has made, and continues to make, to the development of Australia. Foreign investment provides scope for higher rates of economic activity and employment, especially in developing Australia’s resource industries, than could be achieved on the basis of domestic savings alone. Foreign direct investment also provides access to new technology, management skills and overseas markets.

Australian Government policy is to encourage foreign direct investment consistent with the needs of the Australian community including the expansion of private investment, the development of internationally competitive and export-oriented industries, and the creation of employment opportunities.

The administration of foreign investment policy is based on guidelines rather than inflexible rules. It is both practical and non-discriminatory.


Foreign investors are not obliged to seek Australian participation in their mineral or petroleum exploration activities. Foreign companies granted a new mineral or petroleum exploration right are not required to seek approval under foreign investment policy to take up the exploration right. Moreover, proposals to acquire an interest in an existing exploration right (through ‘farm-in’ or ‘farm-out’ arrangements or rearrangement of interests in an exploration joint venture agreement) are exempt from examination under the Foreign Acquisitions and Takeovers Act 1975.


Proposals by foreign companies to establish new businesses involving a total investment of A$10 million or more require prior approval and government notification under the Australian Government’s foreign investment policy. Investments in new businesses are approved unless considered contrary to the national interest.


Investments in existing Australian companies need to be notified where a ‘substantial interest’ (greater than 15%) is being acquired in a business with total assets of A$100 million or more, or where the consideration for the shares values the company at A$100 million or more.

Such proposals are examined throroughly but usually raise no objections unless they are contrary to the national interest. Notification should also be made for offshore takeovers (that is, where an offshore company that holds Australian assets or conducts a business in Australia is acquired by another foreign person, and the Australian assets or business of the target company are valued at less than 50 per cent of it global assets), where Australian assets or businesses of the target company are worth over A$200 million.
The policy also provides that all direct investments by foreign governments, or their agencies, require prior approval, regardless of size.

Different thresholds apply to US investors under the Australia United States Free Trade Agreement.

Further information on the Australian Government's foreign investment policy may be obtained from:
The Executive Member
Foreign Investment Review Board
c/- The Treasury
Langton Crescent
Parkes ACT 2600
Phone +61 2 6263 3795
Fax +61 2 6263 2940 (external site)