FIRB Alert: Annual indexation of Monetary Thresholds

DATE PUBLISHED: January 29, 2025

key takeaways

Foreign investors must determine if their proposed investment exceeds the relevant monetary threshold set under the Foreign Acquisitions and Takeovers Act 1975 (Cth). Exceeding the relevant threshold may mean that Foreign Investment Review Board approval is required for the proposed investment.
The monetary thresholds for most investments are indexed annually, with a modest increase of 2.6% being applied on 1 January 2025. However, some monetary thresholds are not subject to annual indexation, such as the $15 million threshold for agricultural land.
Foreign government investors remain subject to a $0 threshold for all investments in Australia, and do not receive any relief under the monetary thresholds.

Significance Of monetary thresholds

The Foreign Acquisitions and Takeovers Act 1975 (Cth) (FATA) governs all foreign investment in Australia, requiring foreign persons to obtain the approval of the Foreign Investment Review Board (FIRB) for all proposed investments unless an exception applies, or the proposed acquisition falls below the relevant monetary threshold.

It is important that foreign investors are aware of the monetary thresholds which apply to each class of investment, so that they can determine whether FIRB approval is required.

If a proposed investment falls below the relevant monetary threshold, then a foreign investor may not be required to obtain FIRB approval. However, if the dollar value of a proposed investment exceeds the relevant monetary threshold, then FIRB approval may be required in order to proceed with that transaction (and to avoid the significant penalties that are imposed under the FATA).

Annual indexation of monetary thresholds

The FIRB monetary thresholds are subject to annual indexation on 1 January each year. On 1 January 2025, a moderate increase of approximately 2.6% was applied across most types of investments.

The table below confirms the increased thresholds following the 1 January 2025 indexation:

Type of Land/Entity	2024 Threshold	2025 Threshold
Land Investments
Developed Commercial Land – (Free Trade Agreement (FTA) Partners)	$330 million	$339 million
Developed Commercial Land (non- FTA Partners)	$1,427 million	$1,464 million
Sensitive Developed Commercial Land (non-FTA Partners)	$71 million	$73 million
Agricultural Land (FTA Partners)	$15 million	$15 million (no change)
Agricultural Land (non-FTA Partners)	$1,427 million	$1,464 million
Residential Land	$0	$0 (no change)
Vacant Commercial Land	$0	$0 (no change)
National Security Land	$0	$0 (no change)
Mining Tenements	$0	$0 (no change)
Non-Land / Business Investments
Sensitive Businesses (FTA Partners)	$330 million	$339 million
Non-Sensitive Business (FTA Partners)	$1,427 million	$1,464 million
Sensitive and Non-Sensitive Businesses (non-FTA Partners)	$330 million	$339 million
Agribusinesses	$71 million	$73 million
National Security Business	$0	$0 (no change)
Australian Media Business	$0	$0 (no change)

Exemptions for certain asset classes and investors

Whilst most of the monetary thresholds are indexed annually, there are a select few that do not receive the same indexation treatment - an example of this is the $15 million threshold applicable to agricultural land investments by non-FTA partner investors.

It should also be noted that the monetary thresholds (and the annual indexation) do not apply to foreign government investors who remain subject to a $0 threshold for any proposed investment in Australia.

how can mcw help?

There are many reasons for foreign investors to be excited about investing in Australia. However, doing so requires careful consideration of the foreign investment rules and potentially procuring the approval of FIRB.

Our team of foreign investment specialists are here to assist investors navigate the foreign investment regime, and to help them more easily transact in Australia. For more information, please contact Nick Camphin or Oskar Waddington.