1Short title
This Act may be cited as the Foreign Acquisitions and Takeovers Act 1975.
Parliamentary material from APH and the Federal Register of Legislation. Links open the official source in a new tab.
This Act may be cited as the Foreign Acquisitions and Takeovers Act 1975.
This Act shall come into operation on a date to be fixed by Proclamation.
This Act deals with certain actions to acquire interests in securities, assets or Australian land, and actions taken in relation to entities (being corporations and unit trusts) and businesses, that have a connection to Australia. These actions are called significant actions. For an action to be a significant action, the action must in most cases result in a change in control involving a foreign person or be taken by a foreign person.
This Act also deals with actions taken by persons that have, or may have, implications for Australia’s national security. These actions may or may not be significant actions. Actions relating to a national security business or national security land are notifiable national security actions. If an action is a reviewable national security action, or a significant action that is not a notifiable action or a notifiable national security action, the Treasurer may review the action if the Treasurer considers that the action may pose a national security concern.
If a person proposes to take or has taken an action, the Treasurer has power to do one or more of the following:
decide that the Commonwealth has no objection to the action;
impose conditions on the action;
prohibit the action;
require the action to be undone (for example, by requiring the disposal of an interest that has been acquired).
Offences and civil penalties apply for failing to comply with:
an order made prohibiting an action, or requiring an action to be undone; or
a condition imposed on an action.
Significant actions that are notifiable actions, and notifiable national security actions, must generally be notified to the Treasurer before the actions can be taken. Offences and civil penalties may apply if a notifiable action is taken without a notice having been given. Broadly, if a notice has been given stating that a significant action is proposed to be taken, the action must not be taken before the end of a specified period (generally of 40 days, or an additional period of up to 90 days from the registration of an interim order).
Fees are payable in relation to applications and orders made, and notices and notifications given, under this Act.
A person must make and keep records for the purposes of this Act, including in relation to significant actions and notifiable actions. Information that is obtained for the purposes of this Act (called protected information) may be disclosed only for certain purposes. A person who obtains, uses or discloses protected information other than as authorised by this Act may commit an offence.
The Register of Foreign Ownership of Australian Assets is kept under Part 7A.
The Register records certain actions relating to interests acquired, held or disposed of by foreign persons. A foreign person who takes such an action (which may or may not be a significant action or a notifiable action, or otherwise covered by this Act) must give a register notice to the Registrar. In some circumstances, other people must also give notices to the Register. A civil penalty applies to a failure to give a notice under Part 7A.
An individual who is not an Australian citizen is ordinarily resident in Australia at a particular time if and only if:
the individual has actually been in Australia during 200 or more days in the period of 12 months immediately preceding that time; and
at that time:
the individual is in Australia and the individual’s continued presence in Australia is not subject to any limitation as to time imposed by law; or
the individual is not in Australia but, immediately before the individual’s most recent departure from Australia, the individual’s continued presence in Australia was not subject to any limitation as to time imposed by law.
Without limiting paragraph (1)(b), an individual’s continued presence in Australia is subject to a limitation as to time imposed by law if the individual is an unlawful non‑citizen within the meaning of the Migration Act 1958.
Each of the following persons is an associate of a person:
any relative of the person;
any person with whom the person is acting, or proposes to act, in concert in relation to an action to which this Act may apply;
any person with whom the person carries on a business in partnership;
any entity of which the person is a senior officer;
if the person is an entity:
any holding entity of the entity; or
any senior officer of the entity;
any entity whose senior officers are accustomed or under an obligation (whether formal or informal) to act in accordance with the directions, instructions or wishes of:
the person; or
if the person is an entity—the senior officers of the person;
an entity if the person is accustomed or under an obligation (whether formal or informal) to act in accordance with the directions, instructions or wishes of:
the entity; or
the senior officers of the entity;
any corporation in which the person holds a substantial interest;
if the person is a corporation—a person who holds a substantial interest in the corporation;
the trustee of a trust in which the person holds a substantial interest;
if the person is the trustee of a trust—a person who holds a substantial interest in the trust;
if the person is a foreign government, a separate government entity or a foreign government investor in relation to a foreign country (or a part of a foreign country):
any other person that is a foreign government in relation to that country (or any part of that country); or
any other person that is a separate government entity in relation to that country (or any part of that country); or
any other foreign government investor in relation to that country (or any part of that country).
A person may be taken to be an associate under section 79.
Additional associates in relation to interests in residential land
For an action taken relating to an interest in residential land (within the meaning of any of the paragraphs of subsection 12(1)), each of the following persons is also an associate of a person:
an entity that is not listed for quotation in the official list of a stock exchange if a relative of the person:
holds a substantial interest in the entity; or
is a senior officer of the entity;
if the person is an entity (the first entity)—another entity (the second entity) if:
an individual holds a substantial interest in the first entity or is a senior officer of the first entity; and
a relative of the individual holds a substantial interest in the second entity or is a senior officer of the second entity; and
the first entity and the second entity are not, and are not a subsidiary or trustee of an entity, listed for quotation in the official list of a stock exchange.
Persons who are not associates
Despite subsections (1) and (2), a person is not an associate of another person merely because:
one gives advice to the other, or acts on the other’s behalf, in the proper performance of the functions attaching to a professional capacity or a business relationship; or
one, a client, gives specific instructions to the other, whose ordinary business includes dealing in financial products (within the meaning of Division 3 of Part 7.1 of the Corporations Act 2001), to acquire financial products on the client’s behalf in the ordinary course of that business; or
one had sent, or proposes to send, to the other an offer under a takeover bid (within the meaning of that Act) for securities held by the other; or
one has appointed the other, otherwise than for valuable consideration (within the ordinary meaning of the term) given by the other or by an associate of the other, to vote as a proxy or representative; or
both of the following apply:
one provides independent services as a trustee of a trust to the other who is a beneficiary of the trust;
the trustee is licensed to provide those services under a law of the Commonwealth, a State, a Territory, a foreign country or a part of a foreign country; or
one holds a substantial interest in a registered scheme (within the meaning of the Corporations Act 2001) and the other is the responsible entity of the scheme (within the meaning of that Act); or
one holds a substantial interest in a notified foreign passport fund (within the meaning of the Corporations Act 2001) and the other is the operator of the fund (within the meaning of that Act); or
both are partners of one of the following kinds of partnerships:
a partnership of actuaries or accountants;
a partnership of medical practitioners;
a partnership of patent attorneys;
a partnership of sharebrokers or stockbrokers;
a partnership of trade mark attorneys;
a partnership that has as its primary purpose collaborative scientific research, and includes at least one university and one private sector participant (whether or not it also includes government agencies or publicly funded research bodies);
a partnership of architects;
a partnership of pharmaceutical chemists or veterinary surgeons;
a partnership of legal practitioners; or
both of the following apply:
both are partners of a limited partnership;
at least one of them is a limited partner that is not in a position (whether alone or together with one or more persons who are, or would apart from this paragraph be, that partner’s associates) to participate in the management and control of the partnership, or of any of the general partners of the partnership, in relation to any matter.
Listed entities
A person is an independent director of an entity if:
the person is:
a director of the entity; or
for a unit trust—a director of a trustee of the entity; and
the entity is listed for quotation in the official list of a stock exchange (whether or not in Australia); and
the director meets the criteria of that stock exchange for a director to be independent (whether or not the criteria are binding).
If the stock exchange does not have criteria for a director to be independent, a director of an entity listed for quotation in the official list of the stock exchange is not an independent director.
Entities whose securities are stapled
A person is an independent director of an entity (the first entity) if:
the person is a director of the first entity and another entity; and
the securities in the first entity can only be transferred together with securities in the other entity; and
the first entity is not listed for quotation in the official list of a stock exchange, but the other entity is (whether or not in Australia); and
the director meets the criteria of that stock exchange for a director to be independent (whether or not the criteria are binding).
An Australian business is a business that is carried on wholly or partly in Australia in anticipation of profit or gain.
For the purposes of this Act, a person who has an interest in a mining or production tenement is, as a result of having that interest, taken to carry on a business in Australia of exploiting that tenement in anticipation of profit or gain. The tenement is taken to be an asset of that business.
Without limiting subsection (1), a business is taken to be an Australian business for the purposes of this Act if:
the business is carried on wholly or partly in Australia, whether or not in anticipation of profit or gain, by:
the Commonwealth, a State, a Territory or a local governing body; or
a body corporate established for a public purpose by or under a law of the Commonwealth, a State or a Territory; or
an entity wholly owned by the Commonwealth, a State, a Territory, a local governing body or a body corporate covered by subparagraph (ii); and
the business would, or could, be carried on in anticipation of profit or gain if it were carried on by someone other than:
a body referred to in subparagraph (a)(i) or (ii); or
an entity referred to in subparagraph (a)(iii); or
a foreign government; or
a separate government entity.
A foreign person starts a national security business if the foreign person starts to carry on a national security business.
Despite subsection (1), if a foreign person carries on a national security business, the person does not start a national security business merely because the foreign person, alone or together with one or more persons, establishes a new entity:
that carries on the same national security business; or
for the purposes of acquiring interests in assets of the same national security business.
A foreign person starts an Australian business if:
the foreign person starts to carry on an Australian business; or
for a foreign person who already carries on an Australian business—the business starts a new activity that:
is not incidental to an existing activity of the Australian business; and
is within a different Division under the Australian and New Zealand Standard Industrial Classification Codes from the current activities of the Australian business.
Despite subsection (1), if a foreign person carries on an Australian business, the person does not start an Australian business merely because the foreign person, alone or together with one or more persons, establishes a new entity:
that carries on the same Australian business; or
for the purposes of acquiring interests in assets of the same Australian business.
A person holds or acquires an interest in a security if he or she has any legal or equitable interest in that security.
For other rules relating to interests in securities, see sections 13 to 15.
See also section 19 (tracing of substantial interests in corporations, trusts and unincorporated limited partnerships).
Without limiting subsection (1), a person holds or acquires an interest in a security in an entity if:
the person is not the registered holder of the security; and
the person is entitled to exercise or control the exercise of a right attached to the security (other than because he or she was appointed as a proxy or representative).
In determining whether a person holds or acquires an interest in a security, it is immaterial that the interest cannot be related to a particular security.
Issued shares in a corporation
A person holds or acquires an interest in the issued shares in a corporation if:
all or part of the share capital of the corporation consists of stock; and
the person holds an interest in that stock.
For the purposes of this Act, the issued shares are taken to have:
the same nominal amount as the amount of that stock; and
the same rights attached to them as are attached to that stock.
Buying‑back securities
The buying‑back of a security in an entity by the entity does not constitute an acquisition by the entity of an interest in a security in the entity.
A person holds or acquires an interest in an asset if he or she has any legal or equitable interest in that asset.
For other rules relating to interests in assets, see sections 13 to 15.
See also section 19 (tracing of substantial interests in corporations, trusts and unincorporated limited partnerships).
A person holds or acquires an interest in a trust if:
the person holds or acquires a beneficial interest in the income or property of the trust; or
the person holds or acquires an interest in a unit in a unit trust.
For other rules relating to interests in trusts, see sections 13 to 15.
See also section 19 (tracing of substantial interests in corporations, trusts and unincorporated limited partnerships).
Showing the first 12 of 259 provisions. See all provisions