FIRB & Foreign Investment Approval: What ANZ-Bound Founders Must Know

The Foreign Investment Review Board (FIRB) is an advisory body that examines proposed foreign investments in Australia on behalf of the Treasurer. Established under the Foreign Acquisitions and Takeovers Act 1975, FIRB assesses whether a proposed investment is contrary to Australia's national interest — taking into account national security, competition, government revenue, and community impact. The Board makes recommendations to the Treasurer, who retains ultimate decision-making authority.

For foreign founders and investors targeting Australia, FIRB compliance is not optional. An acquisition that proceeds without required approval, or that is blocked after review, can expose the parties to civil and criminal penalties and — under the new 2026 merger regime — render the transaction void. Understanding the framework before you commit capital or structure a deal is therefore one of the most important steps in your ANZ market-entry process.

This guide summarises the key rules, thresholds, and procedures as at January 2026. It is general information only and does not constitute legal advice. Given the complexity and the consequences of non-compliance, always engage a qualified Australian lawyer before proceeding with any transaction that may trigger FIRB review. Monetary thresholds are indexed annually and the figures used here reflect the FIRB monetary thresholds updated 1 January 2026.

No. FIRB is an Australian federal regime. New Zealand has its own overseas investment regime administered by the Overseas Investment Office (OIO) under the Overseas Investment Act 2005. The two regimes are entirely separate, and approval under one does not confer any status under the other. This guide focuses on the Australian FIRB framework. If your expansion targets New Zealand through an acquisition of a New Zealand business or sensitive land, you will need to assess NZ OIO requirements independently.

For most software and SaaS founders entering New Zealand by incorporating a new subsidiary (greenfield), OIO approval is unlikely to be required — but the same logic applies: check with local counsel early.

The Foreign Acquisitions and Takeovers Act 1975 defines a "foreign person" broadly. The definition captures:

• Individuals who are not Australian citizens and are not ordinarily resident in Australia (i.e., not holding a permanent visa and residing in Australia).
• Foreign corporations — companies incorporated outside Australia.
• Australian corporations in which a foreign person (or a group of associated foreign persons) holds a substantial interest (20% or more) or in which a group of foreign persons together holds 40% or more.
• Foreign governments and their agencies, including sovereign wealth funds and state-owned enterprises — which are subject to additional scrutiny and lower thresholds.
• Trustees of a trust in which foreign persons hold a substantial interest.

The practical implication is that even a company that is incorporated in Australia can be treated as a "foreign person" for FIRB purposes if its ownership or control is foreign. Founders should map their cap table carefully: if more than 20% of your investing entity is held by persons who are not Australian citizens or permanent residents, the entity is likely to be treated as foreign.

These definitions are set out in detail in Guidance Note 7 — Business Investments (FIRB, January 2026), which is the primary reference for business investment rules.

These two terms determine the trigger level for notification and approval obligations:

• Substantial interest: a foreign person holds 20% or more of the voting power, potential voting power, issued shares, or rights to distributions in an entity. This is the standard threshold used for most business acquisitions.
• Direct interest: a foreign person acquires 10% or more in an entity, OR acquires any interest that gives them influence or control over the business regardless of percentage. The direct interest test primarily applies to sensitive businesses (media, telecommunications, transport, defence, uranium/nuclear) and to investments by foreign government investors, who face lower thresholds across the board.

For a private foreign investor (e.g., a European venture capital fund or an Irish-founded startup with offshore investors) entering Australia via a standard business acquisition, the 20% substantial interest threshold is the most commonly relevant trigger — provided the business does not fall into a sensitive or national security category. The distinction matters enormously when structuring term sheets or convertible notes, as instruments that could convert to 20%+ equity may themselves constitute a notifiable acquisition depending on the circumstances.

See Guidance Note 7 — Business Investments for the full treatment of both thresholds and worked examples.

FIRB monetary thresholds are indexed to the Consumer Price Index and updated on 1 January each year. For the 2026 calendar year, the key thresholds for business investments are as follows, per the FIRB monetary thresholds page:

• Standard threshold (non-FTA investors): A$347 million — applies to foreign private investors from countries that do not have a qualifying Free Trade Agreement (FTA) with Australia. If the value of a business acquisition exceeds this figure, FIRB approval is required (subject to other conditions).
• Higher threshold (FTA-partner private investors): A$1,498 million — applies to private investors from countries with a qualifying FTA with Australia (e.g., the United States, Japan, South Korea, Chile, Singapore, Peru, Malaysia, Thailand). Investors from these countries benefit from a much higher monetary threshold before approval is triggered.
• Sensitive businesses: A$347 million — this lower threshold applies regardless of whether the investor is from an FTA partner country. Sensitive sectors include media, telecommunications, transport infrastructure, defence, and uranium/nuclear. Even FTA-partner investors do not benefit from the higher A$1,498M threshold when acquiring a sensitive business.

Important note for Irish and EU-based founders and investors: Ireland, and the European Union generally, does not have a qualifying bilateral FTA with Australia for these purposes. Irish and EU investors therefore use the A$347 million standard threshold, not the higher FTA threshold. Australia–EU FTA negotiations have been ongoing, but as of January 2026 no qualifying agreement is in force.

These thresholds apply when a foreign person acquires a substantial interest (20%+) in an Australian business valued above the threshold. Below-threshold investments may still require notification in certain circumstances — see the national security rules in the next section.

Yes — and the rules are significantly stricter. Foreign government investors (which includes sovereign wealth funds, state-owned enterprises, and entities in which foreign governments hold a controlling interest) face much lower thresholds than private investors:

• Any acquisition of a direct interest (10%+ or any controlling interest) in an Australian business requires FIRB approval, regardless of the business's value.
• Any acquisition of an interest in Australian agricultural land worth A$15 million or more requires approval.
• Acquisitions of interests in national security businesses or national security land require approval at any value (A$0 threshold) — see below.

Most venture-backed startups expanding into Australia will be treated as private investors rather than foreign government investors, but fund managers and corporate strategy teams should audit their own fund structures carefully. If a sovereign wealth fund or government-linked entity holds a significant stake in your parent company or investing vehicle, the foreign government investor rules may apply to your transaction. The White & Case 2026 FDI Review for Australia provides a useful overview of how Australia's regime compares internationally.

For a specific and growing category of investment, there is no monetary threshold at all: approval from the Treasurer is required regardless of the size or value of the transaction. This applies to:

• National security businesses — defined by reference to activities directly related to: defence or intelligence; critical infrastructure (electricity, gas, water, ports, airports, hospitals, banking, data infrastructure, broadcasting); and telecommunications.
• National security land — land used or occupied by defence or intelligence agencies, or land that is on or adjacent to such land.

Critically, the A$0 threshold does not only apply to acquisitions of existing national security businesses — it also applies to starting a national security business. A foreign person who intends to establish (greenfield) a business that will fall within the national security definition must obtain FIRB approval before commencing that business. This is a significant departure from the general rule that greenfield entry does not trigger FIRB, and it is particularly relevant for founders building in sectors like critical infrastructure SaaS, cybersecurity, defence tech, and health data infrastructure.

The consequence of proceeding without approval is severe: the Treasurer can make a disposal order requiring the foreign person to divest, and civil and criminal penalties apply. As confirmed by the FIRB monetary thresholds guidance, this A$0 threshold applies to both private foreign investors and foreign government investors alike.

The definition of a national security business turns on the activities of the entity, not merely its sector label. Under the Foreign Acquisitions and Takeovers Act 1975 (as amended by the 2020 national security reforms), a business is a national security business if it carries on one or more of the following activities:

• Providing a service or carrying on a function that is critical infrastructure under the Security of Critical Infrastructure Act 2018 — this statute covers 22 asset classes including communications, data storage and processing, banking and finance, hospitals, and water.
• Handling or storing data that is of interest to Australia's national security or defence.
• Producing, supplying, or maintaining goods or technologies related to defence, intelligence, or law enforcement.

For a typical B2B SaaS business selling productivity software, CRM tools, or marketing analytics to Australian SMEs, it is unlikely you will meet the national security business definition. However, if your product handles sensitive government data, connects to critical infrastructure systems, processes health or financial data at scale for regulated entities, or has any defence or intelligence application, you should obtain a legal opinion before establishing your Australian presence. The risk of misclassifying is too high given the consequences.

Guidance Note 7 — Business Investments sets out the relevant activity tests and worked examples to assist with this assessment.

One of the most significant changes to Australia's investment landscape in recent years is the introduction of a mandatory and suspensory merger clearance regime, which commenced on 1 January 2026. This new regime, administered by the Australian Competition and Consumer Commission (ACCC), replaced the previous voluntary notification system under which parties could (but were not legally required to) seek ACCC review of a merger before completing it.

Under the new regime:

• Acquisitions that meet the prescribed thresholds must be notified to and cleared by the ACCC before completion ("suspensory" means the transaction is suspended pending clearance).
• A merger that meets the thresholds and is completed without clearance is void — it has no legal effect. This is a dramatic escalation from the prior system, where a completed merger could be unwound by the ACCC but was not automatically void.
• The regime applies to acquisitions of shares or assets that meet monetary and market-share thresholds set by regulation.

This reform was driven by years of criticism that Australia's voluntary system allowed anti-competitive mergers to proceed unchallenged. As documented in the White & Case 2026 Foreign Direct Investment Review for Australia, Australia now joins most major OECD economies in requiring mandatory pre-merger notification for qualifying transactions.

The mandatory merger clearance regime and the FIRB regime are separate but overlapping processes. A transaction may need both ACCC merger clearance (on competition grounds) and FIRB approval (on national interest grounds). The two processes can run concurrently, but completion is blocked until both are resolved.

In practice, this means that for an acquisition of an Australian business above the relevant thresholds:

• You must file for ACCC merger clearance if the deal meets the merger regime thresholds (typically based on combined turnover or market share).
• You must also apply for FIRB approval if you are a foreign person acquiring a substantial interest (20%+) in an Australian business above the applicable FIRB monetary threshold.
• Neither approval can be skipped. Completing without ACCC clearance voids the deal; completing without FIRB approval exposes you to penalties and potential forced divestiture.

For early-stage acquisitions and bolt-on deals below the merger thresholds, ACCC clearance will not be mandatory — but FIRB review may still apply if the foreign investment thresholds are met. Always model the deal against both regimes simultaneously. The FIRB Guidance Note 7 addresses how FIRB approval interacts with other regulatory requirements.

The consequences of non-compliance with the new mandatory regime are severe and were deliberately designed to deter parties from taking a calculated risk on completing without clearance:

• The transaction is void. A merger completed in breach of the suspensory obligation has no legal effect. This means share transfers do not pass title, and asset acquisitions can be treated as if they never occurred — creating enormous practical and legal complications for both buyer and seller.
• FIRB penalties. Separately, proceeding with a notifiable foreign investment without FIRB approval carries civil penalties of up to A$825,000 for individuals and up to A$16.5 million for corporations (or three times the value of the transaction if higher), plus potential criminal liability for intentional breaches.
• Unwinding orders. Even where a transaction has been completed and cannot easily be unwound commercially, the Treasurer and the ACCC have power to impose conditions, order divestiture, or require other remedial action.

The prudent approach is to build regulatory approval timelines into every deal timeline from the outset — not as an afterthought once commercial terms are agreed. As the White & Case 2026 FDI Review notes, Australia's regime is now one of the more procedurally rigorous among comparable economies.

For the vast majority of foreign software and SaaS founders, a greenfield market entry — incorporating a new Australian Pty Ltd subsidiary, hiring staff, signing office leases, and selling software to Australian customers — will not trigger FIRB approval requirements. The FIRB regime is primarily concerned with acquisitions of existing Australian businesses and assets, not with new business formation by foreign investors.

Specifically, if you are:

• Incorporating a brand-new Australian entity (not purchasing an existing one),
• Not acquiring a substantial interest (20%+) in any existing Australian company,
• Not acquiring Australian real property,
• Not establishing a business that meets the definition of a national security business, and
• Not a foreign government investor,

then no FIRB notification or approval is required. This is the situation that applies to the great majority of ANZ-bound SaaS founders: you set up a subsidiary, open a bank account, run payroll, and begin trading. FIRB simply does not enter the picture.

This is confirmed by the FIRB monetary thresholds guidance and by Guidance Note 7, which makes clear that the regime targets acquisitions of existing businesses, not new business formation.

The picture changes as soon as you move from organic (greenfield) expansion to acquiring an existing Australian business, even a small one. FIRB approval is required when a foreign person acquires a substantial interest (20% or more) in an Australian business and the acquisition exceeds the relevant monetary threshold. The thresholds as at January 2026 are:

• A$347 million for non-FTA investors (including Irish and EU investors).
• A$1,498 million for private investors from qualifying FTA-partner countries.
• A$347 million for sensitive businesses, regardless of the investor's country.
• A$0 for national security businesses and national security land.

For early-stage acquisitions — such as buying a small Australian SaaS company for A$5–15 million — the headline monetary thresholds appear not to apply. However, founders should be cautious about several common edge cases:

• Sensitive sector overlap: if the target handles health data, financial records, or connects to regulated infrastructure, it may qualify as a sensitive or national security business, triggering FIRB at any value.
• Aggregation rules: multiple acquisitions of interests in the same Australian business or related businesses can be aggregated for threshold purposes.
• Convertible instruments: a convertible note or SAFE that could convert to 20%+ equity may itself constitute an acquisition of a substantial interest, depending on the terms and applicable rules.
• Real property: acquiring commercial or residential real property as part of the deal may trigger separate FIRB rules for land acquisitions.

All figures are drawn from the FIRB 2026 monetary thresholds page. The White & Case 2026 FDI Review provides additional commentary on deal structures and threshold interaction.

FIRB applications are made through the Australian Treasury's online FIRB portal. The process broadly involves the following steps:

1. Determine whether approval is required. Map your transaction against the thresholds and categories described in this guide. Obtain legal advice if there is any doubt.
2. Prepare the application. Applications must include details of: the applicant's identity and ownership structure; the target business or asset; the proposed transaction structure and consideration; the rationale for the investment; and information about how the investor intends to manage and operate the business. For complex transactions, supporting financial, legal, and corporate documents are required.
3. Pay the application fee. FIRB charges a fee based on the value of the transaction. Fees are tiered and can range from a few thousand dollars for small transactions to hundreds of thousands of dollars for very large ones. The fee schedule is published on the FIRB website.
4. Wait for the statutory review period. The Treasurer has 30 days from receipt of a complete application to make a decision (or to impose a condition or issue a no-objection notification). This period can be extended by mutual agreement or by a formal extension notice (typically to 90 days for complex cases). During the review period, the parties must not complete the transaction.
5. Receive the decision. The Treasurer may: (a) issue a no-objection notification (approval, possibly with conditions); (b) make an order prohibiting the acquisition; or (c) allow the statutory period to expire without acting, which is deemed to be no objection.

The practical lesson is to begin the FIRB process as early as possible — ideally before or immediately upon signing a term sheet, not at exchange of contracts. As noted in Guidance Note 7, the Treasury encourages early and informal engagement for complex or novel transactions.

FIRB approval is not always unconditional. The Treasurer has broad powers to impose conditions on a no-objection notification. Common conditions imposed on foreign investment approvals include:

• Ownership caps: the investor must not increase its shareholding above a specified percentage without further approval.
• Board composition requirements: the Australian entity must maintain a minimum number of independent Australian directors.
• Operational conditions: restrictions on relocating key functions or personnel offshore, obligations to maintain Australian employment levels, or requirements to store certain data onshore.
• Reporting obligations: ongoing annual compliance reports to Treasury confirming that conditions are being met.
• Disposal conditions: an obligation to divest the investment within a set period if the investor fails to meet specific milestones.

Where the Treasurer has national security concerns, the transaction can be prohibited outright or subjected to stringent structural conditions. In practice, outright prohibitions are rare for commercial business investments below the national security threshold, but they do occur — particularly for sensitive sector deals or transactions involving foreign government investors in strategic assets. The White & Case 2026 FDI Review analyses recent approval trends and the types of conditions that have been imposed across different sectors.

FIRB application fees are set by regulation and are value-based and tiered. For commercial business investments, the fee scales with the value of the transaction — starting at a few thousand dollars for small deals and rising to several hundred thousand dollars for very large acquisitions. The current fee schedule is published on the FIRB portal and is updated periodically. It is important to factor these fees into deal economics early, particularly for transactions in the A$50M–A$500M range where fees can be material relative to deal costs.

One of the most useful but under-utilised features of the Australian FIRB regime is the option to engage Treasury informally before lodging a formal application. For novel, complex, or potentially sensitive transactions, Treasury officers can provide guidance on whether approval is required and flag any particular concerns the Treasurer may have. This informal engagement is not binding, but it can significantly reduce the risk of a formal application being refused or subjected to onerous conditions. Guidance Note 7 specifically encourages this pre-application dialogue for complex transactions. For deals with a genuine national interest dimension — such as those involving sensitive technology, strategic infrastructure, or large employment impacts — informal pre-engagement is strongly recommended.

Use this checklist before committing to any investment structure or transaction in Australia. It is a practical prompt list — not a substitute for legal advice.

• ☐ Confirm foreign person status: determine whether you, your investing entity, or any controlling party qualifies as a "foreign person" under the Act. Review your cap table and fund structure with Australian counsel.
• ☐ Identify the type of transaction: are you acquiring an existing Australian business (shares or assets), starting a new entity (greenfield), or acquiring land? Only acquisitions typically trigger FIRB.
• ☐ Check whether the target is a national security business: if yes, approval is required regardless of deal value (A$0 threshold). Assess against the Security of Critical Infrastructure Act 2018 activity list.
• ☐ Check whether the target is a sensitive business: media, telco, transport, defence, uranium/nuclear — the A$347M threshold applies even for FTA-partner investors.
• ☐ Apply the correct monetary threshold: A$347M for non-FTA investors (including Irish/EU); A$1,498M for qualifying FTA-partner private investors; A$0 for national security. Confirm current thresholds at the FIRB thresholds page.
• ☐ Assess substantial vs direct interest: are you acquiring 20%+ (substantial) or 10%+ in a sensitive/national security business (direct)? Check convertible instruments that could cross these thresholds.
• ☐ Confirm mandatory merger clearance obligations: if the transaction meets the ACCC merger regime thresholds (post-1 Jan 2026), file for ACCC clearance. Do not complete until both ACCC and FIRB processes are resolved.
• ☐ Engage Australian legal counsel early: before signing any binding terms, obtain a written FIRB assessment from a qualified Australian lawyer. Engage Treasury informally for complex transactions.
• ☐ Budget for FIRB fees and timeline: allow at minimum 30 days (potentially 90+ days for complex cases) and budget for tiered application fees.
• ☐ Condition the deal on FIRB approval: ensure any SPA or term sheet contains a FIRB approval condition precedent — do not allow unconditional exchange before approval is received.
• ☐ Post-approval: track conditions: if approval is granted with conditions, put in place an internal compliance programme to monitor and report on those conditions on an ongoing basis.

Q: I am incorporating a new Australian Pty Ltd as a foreign founder. Do I need FIRB approval?
A: No, not for a straightforward greenfield incorporation. The FIRB regime applies to acquisitions of existing Australian businesses and assets. Incorporating a new entity does not require FIRB approval — provided the new business will not operate as a national security business (see the A$0 threshold section above). You will, however, need to comply with ASIC's director residency requirements and the usual incorporation steps.

Q: My Irish VC fund is investing in an Australian SaaS startup at a A$50M valuation. Is FIRB triggered?
A: Unlikely for a minority investment below 20%. If the VC is acquiring less than a 20% substantial interest, and the company is not a national security or sensitive business, no FIRB approval is required. If the investment takes the VC's stake to 20% or above, a FIRB assessment is needed — but at A$50M the deal falls well below the A$347M standard threshold that applies to Irish/EU investors, so approval would likely not be required even for a majority stake. Always confirm with legal counsel, as deal structuring and aggregation rules matter.

Q: Does the new mandatory ACCC merger regime replace FIRB?
A: No. The two regimes are completely separate. The mandatory merger clearance regime (commenced 1 January 2026) is about competition law — it replaced the voluntary ACCC system and is administered by the ACCC. FIRB approval is about national interest and is administered by Treasury/the Treasurer. A transaction may need both. See the White & Case 2026 FDI Review for a comparative analysis.

Q: We are acquiring a small Australian cybersecurity company for A$8M. The deal is below the A$347M threshold — are we safe?
A: Not necessarily. Cybersecurity companies may handle data relating to critical infrastructure or defence systems, placing them within the national security business definition. If so, the A$0 threshold applies — FIRB approval is required regardless of deal value. This is precisely the kind of situation where the headline monetary threshold can be misleading. Obtain a legal opinion on the national security classification before proceeding. Refer to Guidance Note 7 for the activity tests.

Q: How long should I allow for FIRB approval in my deal timeline?
A: Build in a minimum of 30 days from the date of a complete application, but plan for up to 90 days for transactions that involve sensitive sectors, national security considerations, or foreign government investors. For complex cross-border transactions, some approvals have taken longer. Treasury encourages informal pre-application engagement, which can reduce delays. The FIRB guidance confirms the statutory 30-day period with optional extension mechanisms.

Q: Is there any exemption for small businesses?
A: There is no blanket small-business exemption, but the monetary thresholds effectively exempt most small transactions involving non-sensitive businesses. An acquisition of a standard (non-sensitive, non-national-security) Australian business valued below A$347M by a non-FTA investor does not require FIRB approval. The thresholds are set out in full at the FIRB monetary thresholds page. Note, however, that foreign government investors face much lower (or zero) thresholds even for small businesses.

This guide is general information only and does not constitute legal advice. Australia's foreign investment framework is complex and fact-specific. Always consult a qualified Australian lawyer before proceeding with any transaction that may engage the FIRB regime.