Investing in Australia in 2026: A Legal Roadmap for Foreign Investors

Australia remains an attractive destination for international capital, but investing successfully requires more than identifying the right asset or business.

Foreign investment may engage Australia's foreign investment screening regime, mandatory merger control, tax, corporate structuring, sector-specific regulation, and post-completion reporting. Those workstreams can operate simultaneously, and each can affect transaction timing, documentation, and execution.

The central lesson for foreign investors is straightforward: regulatory strategy should begin when the transaction is being structured, not after the principal commercial terms have been agreed.

What Foreign Investors Should Assess First

Before committing to an Australian investment, investors should consider six questions:

• Investor status: Is the investor a foreign person or foreign government investor, and what entities form part of the investment structure?
• Asset and sector: Is the target a business, company, land asset, fund interest, or national security business?
• Foreign investment approval: Does the transaction require notification before completion, and what national interest or national security issues may arise?
• Merger control: Does Australia's mandatory ACCC merger regime apply independently of foreign investment approval?
• Structure and tax: Will the investment use an Australian subsidiary, registered foreign company, joint venture, or other vehicle, and what tax consequences follow?
• Post-completion obligations: Will approval conditions, foreign ownership register notices, or continuing compliance obligations apply?

1. Start With the Investor, the Asset and the Structure

Australia's foreign investment rules do not apply uniformly to every investor or transaction. The first step is to identify who is investing, what is being acquired, and how the investment will be held.

Foreign investors may need approval before acquiring interests in Australian companies, businesses, assets, or land. The applicable rules vary according to matters including the investor's status, the percentage interest acquired, the value and nature of the target, the sector involved, and, in some cases, the investor's country.

Foreign government investors are subject to additional rules. They generally require approval before acquiring a direct interest in an Australian entity and before starting an Australian business, regardless of value.

National security investments require particular care. Acquiring a direct interest in a national security business, starting such a business, or acquiring national security land can require mandatory notification irrespective of transaction value.

The structure should therefore be settled only after the regulatory consequences of the proposed ownership and control arrangements are understood.

2. Determine Whether Foreign Investment Approval Is Required

Australia's foreign investment framework operates under the Foreign Acquisitions and Takeovers Act 1975.

For most notifiable investments, the Treasurer considers whether the proposal would be contrary to Australia's national interest. Relevant factors can include national security, competition, Australian Government policies including tax, effects on the economy and community, and the character of the investor. National security actions are assessed under a separate national security test.

The monetary screening thresholds were updated on 1 January 2026 and vary significantly between transaction types and investors. Some investments have a zero-dollar threshold, while others are subject to substantial monetary thresholds or treaty-based concessions.

This is why a simple question such as "Does the deal exceed the FIRB threshold?" can be misleading. There may be multiple thresholds, exemptions, and special rules applying to the same transaction.

Where approval is required, transaction documents should generally make completion conditional on obtaining the necessary approval on acceptable terms.

3. Build Regulatory Timing Into the Deal

Timing should be considered before signing.

Generally, once the correct foreign investment application fee has been paid, the Treasurer has a statutory 30-day decision period, although that period can be extended. Treasury reported a median processing time of 35 days for approved commercial investment proposals in the March 2026 quarter.

In May 2026, the Australian Government announced further reforms aimed at making the framework faster for low-risk investments while strengthening scrutiny of higher-risk proposals. From 1 January 2027, the Government intends to apply a new target of deciding qualifying all low-risk applications within 30 days.

For transactions completing in 2026, investors should nevertheless allow sufficient time for information requests, extensions, conditions, and interaction with other approvals.

Transaction documents should address who prepares the application, cooperation obligations, responsibility for information and fees, acceptable approval conditions, long-stop dates, and termination rights if approval is delayed or refused.

4. Treat ACCC Merger Control as a Separate Workstream

Foreign investment approval and competition clearance are different regimes.

Since 1 January 2026, Australia's merger control regime has been mandatory. Acquisitions meeting the applicable thresholds must be notified to the ACCC unless an exemption applies or a notification waiver is obtained.

The regime includes thresholds based on Australian revenue, transaction value, and, in some circumstances, previous acquisitions involving the same or substitutable goods or services.

A foreign investor can therefore have a transaction that requires both foreign investment approval and ACCC clearance. Those processes should be mapped together at the beginning of the transaction. Conditions precedent, regulatory cooperation provisions, and the overall timetable should reflect the critical path across both regimes rather than treating each approval in isolation.

5. Choose the Australian Operating Structure Carefully

A foreign investor entering Australia must also decide how the business will operate locally. Options may include incorporating an Australian subsidiary, registering a foreign company to carry on business in Australia, establishing a joint venture, or acquiring an existing Australian entity.

ASIC requires a foreign company that itself carries on business in Australia to register as a foreign company. A foreign investor may instead establish an Australian subsidiary through which the Australian business is conducted. The choice can affect governance, liability, reporting, financing, and tax.

Foreign residents doing business in Australia may also have Australian tax registration and payment obligations. Relevant issues can include income tax, capital gains tax, GST, withholding taxes, transfer pricing, thin capitalisation, employment taxes, and the operation of Australia's tax treaties.

Tax and legal structuring should therefore be undertaken together rather than treating tax as a post-signing issue.

6. Consider Land and Sector-Specific Regulation Early

The nature of the Australian asset can materially alter the regulatory pathway.

National security land has a $0 threshold for all foreign investors. Residential land generally requires notification regardless of value, and current government policy generally prohibits foreign investors from purchasing established dwellings until 30 June 2029, subject to limited exceptions. Commercial and agricultural land are subject to their own rules and thresholds. Mining and production tenements, critical infrastructure, energy, communications, data, defence, and other sensitive sectors may also engage additional foreign investment or sector-specific regulation.

Investors should therefore identify sector sensitivities before settling the acquisition structure or timetable. This is particularly important where an apparently ordinary corporate acquisition indirectly gives the investor interests in Australian land, critical infrastructure, or a national security business.

7. Approval is Not the End of the Compliance Process

Completion does not necessarily end the regulatory obligations.

Foreign investment approvals may contain conditions that operate for years after completion. Investors must understand who is responsible for complying with those conditions, how compliance will be monitored, and what reporting is required.

Foreign persons must also notify the Register of Foreign Ownership of Australian Assets of certain actions involving Australian land, water, entities, businesses, and other assets.

Treasury is presently reviewing conditions attached to existing approvals as part of its 2026 reform program, but existing conditions remain binding unless and until they are varied or removed.

Post-completion integration should therefore include a regulatory compliance workstream, not simply corporate and operational integration.

A Practical Transaction Roadmap

For most significant inbound investments, the process can be approached in seven stages:

• Identify the investor and ownership structure.
• Map the target assets, land interests, and sensitive activities.
• Determine foreign investment notification and national security requirements.
• Assess ACCC merger control and other sector-specific approvals.
• Set the Australian corporate and tax structure.
• Build approvals, conditions, and timing into the transaction documents.
• Plan post-completion reporting and ongoing compliance.

The sequence is not always linear. The important point is that these issues should be considered together.

Investing in Australia Requires an Integrated Regulatory Strategy

Australia remains open to foreign capital. In the first three months of 2026 alone, approved commercial foreign investment proposals totalled $79.7 billion across 311 proposals.

At the same time, the regulatory framework is increasingly designed to distinguish between lower-risk investment that can move efficiently and transactions involving national interest, competition, or national security sensitivities that require closer scrutiny. The Government's May 2026 reforms expressly pursue both objectives.

For investors, regulatory preparation is therefore part of transaction execution. Investors are better placed when foreign investment screening, competition, tax, corporate structure, transaction documentation, and post-completion compliance are mapped before capital is committed and before the deal timetable becomes difficult to change.

How We Can Help

We advise international investors, private capital, corporations, and boards on acquisitions, foreign investment, corporate structuring, merger control, and regulatory approvals in Australia.

We assist clients from transaction structuring and due diligence through to foreign investment applications, regulatory engagement, transaction documentation, and post-completion compliance.

This publication is current as at 24 September 2026, which we believe may be of interest to our clients and friends of the firm, and is for general information only. Property, planning, construction and taxation requirements vary between Australian jurisdictions and individual transactions. It does not constitute legal, financial, investment or tax advice.