Effective from the 29 March 2020, new measures have been
introduced by the Federal Government to reduce the monetary
threshold for foreign investments requiring Foreign Investment
Review Board (FIRB) approval to $0.
It is not well-known that the class of assets subject to FIRB
approval include leases of commercial property.
What you need to know
To summarise, any foreign entity that is proposing to:
- enter into a new lease of commercial land (whether vacant or
developed) or
- extend an existing lease term,
where the term of the lease is greater than five years will now
need to apply for and obtain FIRB approval.
Commercial Leases and FIRB
Prior to the changes, entry into a lease of developed commercial
land by a foreign entity required FIRB approval if the term of the
lease was likely to exceed five years and the total rent payments
over the term were $275 million or more, or $60 million in certain
circumstances.
