When Does a Chinese Investor Need FIRB Approval to Acquire an Australian Business?

1. Define the investor, the target and the rights being acquired

This guide addresses Chinese corporates, funds and individuals, including acquisitions through offshore holding vehicles, buying an Australian company, business or assets. FIRB advises the Australian Treasurer; the statutory decision is made by the Treasurer or a delegate. Competition clearance, sector licences, tax, state land rules and Chinese outbound-investment procedures remain separate workstreams.

The analysis must look through the structure: jurisdiction of the immediate acquirer, ultimate beneficial owners, government holdings or influence, associates' existing interests, voting and governance rights, the target's Australian activities and assets, land, and sensitive or national-security operations. An acquisition through Hong Kong, Singapore or another platform does not remove the regime, and treaty thresholds depend in part on where the immediate acquirer is formed.

2. Test foreign government investor status first

The concept reaches beyond conventional state-owned enterprises. It can include a corporation, trustee or general partner in which one foreign government or separate government entity holds at least 20%, alone or with associates, or governments from more than one foreign country hold at least 40% in aggregate. Capital, governance, fund and associate arrangements therefore need a look-through review.

A foreign government investor generally faces a zero-dollar threshold when acquiring a direct interest in an Australian entity or business. A direct interest is usually 10% or more, but a lower stake can qualify where control, board participation or strategic influence is present. Starting an Australian business, or commencing a materially different activity, may also require notification. A 9.9% stake or consortium vehicle is not a safe harbour if rights and associates change the analysis.

• Ownership: every shareholder, fund LP, manager and general partner
• Government connection: equity, appointments, vetoes, finance or other influence
• Associates: common control, acting arrangements and relevant personal or business relationships
• Deal rights: board or observer seats, reserved matters, information rights and step-up arrangements

3. For private capital, use the 2026 thresholds with the correct target category

China is listed among Australia's relevant free trade agreement partners. For 2026, an eligible Chinese private investor acquiring a substantial interest of 20% or more in a non-sensitive Australian entity generally tests the target against A$1.498 billion. The threshold is A$347 million where the entity carries on a sensitive business. Indexed thresholds change on 1 January, so a deal spanning a year-end needs the figures effective when the action is taken.

Sensitive sectors include media, telecommunications, transport, defence and military-related activities, encryption and security technologies, uranium or plutonium extraction and nuclear facilities. A direct interest in an agribusiness has a separate cumulative A$75 million test. Land entities, commercial or agricultural land and mining tenements have distinct rules. A manufacturing target may therefore require additional tests because it owns land, operates near a port or maintains data-storage facilities.

4. National security can produce a zero-dollar filing

A foreign investor must generally notify before acquiring a direct interest in a national security business or an entity carrying one on, acquiring national security land or relevant exploration rights, or starting a national security business. These businesses may involve critical infrastructure, telecommunications, defence or intelligence supply chains, critical technology, or access to security-sensitive data.

A transaction outside mandatory notification is not necessarily beyond future review. A reviewable national security action can be called in while it remains under foreign ownership; voluntary notification may provide greater transaction certainty. Target diligence should examine customers, supply chains, datasets, facilities and government contracts, rather than relying only on the company's registered industry description.

5. A contract may be signed, but implementation must remain conditional

Treasury guidance permits an agreement before a decision if it is conditional on receiving a no-objection notification or exemption certificate. The agreement should allocate responsibility for filing and fees, seller information, responses to Treasury, acceptable conditions, extensions to the long-stop date, termination rights and deposit treatment if approval is refused or conditions are unacceptable.

The parties should also avoid passing control early. Pre-closing conduct should not allow the buyer to direct ordinary operations, pricing or customer contracts, integrate teams, or obtain sensitive information beyond what diligence requires. FIRB risk, competition-law gun jumping, privacy and confidentiality should be managed together through clean teams, information barriers and carefully limited interim covenants.

6. The submission must address national interest, not merely introduce the buyer

Business-investment filings are made through the Foreign Investment Portal. Treasury asks who is investing, what will be acquired, transaction details, why the proposal is not contrary to the national interest and whether it creates national-security concerns. A coherent submission connects the ownership chart, funding, transaction documents, target assets and operations, customers and government links, data and technology, governance, tax structure and completion timetable.

Common deficiencies include an ownership chart that stops too early, a generic target description, omitted land or data, funding that does not reconcile with the price, and a bare statement that national security is not applicable. Information requests affect timing. Material or sensitive deals benefit from identifying likely questions and possible conditions before the contractual timetable is fixed.

• Identity: registration records, beneficial ownership, government connections and associates
• Transaction: near-final documents, structure, percentages, rights and valuation
• Target: activities, assets, land, licences, government customers, key suppliers and data
• Funding: source of funds, financing, guarantees and repayment structure
• Risk: national-interest and national-security analysis, mitigations and proposed conditions
• Timing: signing, filing, long-stop date and planned completion

7. Timing: 30 days is the statutory starting point, not a reliable closing date

The statutory 30-day decision period does not begin until the relevant fee is paid. The framework also permits a notification period, formal extensions or applicant-agreed extensions, and complex, incomplete or sensitive proposals can take longer. Treasury reported a 35-day median processing time for approved commercial proposals in the December 2025 quarter; that aggregate is not a commitment for a particular deal.

A transaction timetable should run from a complete submission and correct payment, with contingency for questions, seller materials, condition negotiations and parallel clearances. A long-stop date allowing only 30 days can place the buyer in default or cause the deal to lapse while review continues.

8. Failure routes include non-filing, late filing and post-approval breaches

Implementing a mandatorily notifiable action before approval is not cured simply by filing later. Treasury directs investors who did not notify in advance to make a retrospective submission. Available powers can include prohibition, conditions, variation and divestment, with civil or criminal consequences for contraventions. On discovering a problem, pause further implementation, preserve the signing, payment, board and control timeline, and assess remediation.

Approval is not the end of compliance. A no-objection notification may impose tax, governance, data, personnel, reporting or other conditions, and certain actions require notice to the Register of Foreign Ownership of Australian Assets. The completion checklist should allocate each condition, reporting deadline, evidential record and future stake-increase test to an accountable owner.

9. Use a four-level screen before making a binding offer

Moving the FIRB screen to the front of structuring and diligence reduces the risk of redesigning the deal, extending completion or accepting unexpected conditions after signing.

• Level 1—Investor: foreign-person status, government links, associates and immediate acquirer
• Level 2—Interest: direct or substantial interest plus board, veto, information and step-up rights
• Level 3—Target: entity, sensitive business, national security, land, agriculture and mining tests
• Level 4—Execution: filing category, fee, evidence owners, timetable buffer and condition precedent
• Do not sign on the assumption that price alone decides filing or use a vague buyer-only approval covenant
• Seek transaction-specific advice early for government capital, critical infrastructure/technology/data, land, year-end thresholds, auctions or an already implemented deal