Amendments to the Singapore-Australia Free Trade Agreement (SAFTA) have resulted in changes to the monetary thresholds that apply to determine whether Singaporean investors are required to seek Foreign Investment Review Board (FIRB) approval prior to making certain investments.
These changes, for the most part, will be welcomed by Singaporean investors. The increased monetary thresholds will likely reduce the number of FIRB applications and will enable many investors to avoid paying the sizeable application fees to FIRB
What are the changes arising from the amendment to the SAFTA?
The threshold for investments by Singaporean investors (other than foreign government investors) in most businesses and entities (except sensitive businesses) and non-vacant commercial land has increased from $252 million to $1,094 million.
However, foreign government investors from Singapore remain subject to a $0 threshold for investments of any kind.
The changes have also reduced the threshold for investments in agricultural land from $50 million to $15 million, applied on a cumulative basis. This means that Singapore is now subject to the standard threshold which applies to all other investors (other than foreign government investors and investors from Thailand). The new threshold means that investors from Singapore will need to seek a no objection notification from the Treasurer where the consideration for the proposed acquisition combined with the value of the person’s existing agricultural land holdings in Australia will exceed $15 million.
The $55 million threshold for investments in agribusiness remains unaltered.
Impact of the changes for Singaporean investors
These amendments will apply to significant actions and notifiable actions taken on or after the day that the amendments to the SAFTA come into force, which is scheduled to take place on 1 December 2017.
Australia welcomes foreign investment and these changes will enable it to continue to be viewed as an attractive destination for Singaporean investment.