Yesterday, the Australian Treasurer announced that the Commonwealth Government will amend its foreign investment rules (the Foreign Acquisitions and Takeovers Regulations 1989 (Cth)) as part of its reform of Australia's foreign investment screening framework. The reforms are intended to remove from the foreign investment review process lower value transactions that do not give rise to national interest concerns, reduce compliance costs and generally promote foreign investment in Australia.

The changes should come into effect during or after September 2009 and will, most relevantly, amend the thresholds for mandatory review of acquisitions of more than 15% of a business as follows:

To view table click here.

The changes also remove the notification requirement for private investors starting a new business in Australia worth more than A$10 million.

The Government has noted that the special screening requirements for government sector and media investments will continue. Acquisition of interests in "urban land corporations" are not addressed in the proposed amendments.

For completeness, it is worth noting that the Government's announcement does not signal any change to the requirements for any acquisition by a foreign state owned enterprise in Australia to be subject to FIRB approval regardless of its size.