Under the Foreign Acquisitions and Takeovers Fee Imposition Act 2015 (Cth), royalties were collected for all acquisition authorization applications from the Treasurer. As with the thresholds for large and non-de-forming measures, registration fees vary depending on the type of interest acquired. The current fee is available at firb.gov.au/applications/fees/. Fees are also due if: although the monetary thresholds are lowered to USD 0, statutory exceptions and other provisions continue to apply.8 rentals/licences/sub-rentals (including renewals) or leases of less than 5 years are excluded from the FIRB application procedure. In addition, these temporary changes only affect transactions involving the acquisition of a « core interest » (i.e., acquisitions in Australian companies under 20% are generally excluded from the law – but knowledge of lower percentage thresholds may apply to certain sectors and foreign investors).9 As a result, foreign investors who have previously opted for monetary thresholds should consider structuring options to build on these exemptions from the law. While the actual lease for a solar or wind project is usually concluded on a project financial basis, it is customary that the rights to the underlying land be guaranteed very early in the development of the project by an option agreement. It is important that entry into this lease option with landowners may, in its first way, trigger the requirement to obtain prior authorization from FIRB during this preliminary development phase. This requirement cannot be applied if the exercise of the option is conditional on obtaining FIRB`s authorization. Dibden Pty Ltd is an Australian subsidiary of a Dutch company. Dibden Pty Ltd proposes to create a sale and call option for the purchase of all shares in another Australian company that manages an Australian company for $260 million. As Dibden Pty Ltd is a wholly-related subsidiary of a foreign company, a foreign investment authorization is required before the terms of the Put and Call option become mandatory.
When Dibden Pty Ltd proposes to execute the Put and Call option before applying for foreign investment authorization, it should ensure that any sale and appeal options seized are subject to the granting of firB authorization in order to avoid action being taken before obtaining foreign investment authorization. As a result, a large number of routine leases are now subject to FIRB approval. As noted above, FIRB has confirmed that the Ministry of Finance and the ATO will work on sorting and implementing their risk-based approach to ensure that non-sensitive leasing contracts can be effectively renegotiated to allow businesses to remain open. An example may be a heads of Agreement concluded. The parties should carefully review these contract managers before concluding that this is an existing agreement, in order to avoid the need to inform the FIRB. If you have any doubts and want to be sure, if you enter into a more formal commercial lease after March 29, you should inform THE FIRB. If you are a foreign investor and are considering a lease or lease for a reasonable period of more than 5 years, you must take into account the time and cost of the FIRB application, as the compliance burden is on the tenant. Alternatively, it can be beneficial to show how your business protects and supports Australian businesses and jobs to obtain FIRB accreditation on a priority basis. FirB has now indicated that it believes that an agreement was reached prior to the announcement date, when negotiations on the agreement were concluded and that the parties reached a mutual understanding of all the essential elements of their agreement.