How Australia’s FIRB Reforms Are Speeding Foreign Investment & Tightening National Security

Australia’s FIRB (Foreign Investment Review Board), overseen by Treasury, has shown measurable improvements in processing foreign investment applications. The December 2024 quarter’s median processing time of 29 days represents both a reduction from 34 days in the September quarter and passage of a performance target: over 50% of approvals in 30 days or less. This suggests that operational refinements and process streamlining are producing results—though this benchmark appears to exclude more complex or national-security sensitive cases, where delays remain longer.

A heightened enforcement environment is also evident. The significant jump in audits (from three to nine in progress) and the presence of 13 investigations indicate that the government is placing growing weight on compliance, beyond mere application speed. Voluntary notifications—especially concerning national security—have also increased, suggesting that investors are becoming more attuned to regulatory risk and are proactively disclosing sensitive transactions.

Shifts in the nature of foreign investment inflows are notable. The finance and insurance sector saw investment explosion—from ~A$3.2 billion to ~A$25.5 billion—even though the number of proposals remained roughly constant. Commercial real estate, formerly dominant, saw investment fall dramatically (from ~A$24.1 billion to ~A$10.0 billion). On nationality, while the U.S. remains the largest source, its quarter-on-quarter investment dropped nearly 50%, with Saudi Arabia rising from ~A$100 million to ~A$8.9 billion. Canada similarly gained share. These trends could reflect both sector-based regulatory changes and shifting geopolitical patterns.

Institutionally, Treasury is bolstering regulatory infrastructure. The new Foreign Investment Portal is active; it’s being enhanced; from 1 January 2026 it will also serve the ACCC’s mandatory notification regime. The portal now demands competition analysis even in cases not strictly requiring ACCC intervention. This signals a tightening of scrutiny across broader sets of transactions, likely increasing due diligence burdens for foreign investors, especially in sectors where competition concerns were previously under-emphasised.

Strategic implications for corporates & investors include:

• Investors in sensitive sectors or with complex structures should anticipate longer timelines and greater compliance demands—the improved averages may not capture these “long tail” cases.
• Given sectoral shifts, investment strategies may favour finance and insurance over real estate in Australia; real estate targets now face either regulatory headwinds or lower investor preference.
• Source country risk and reputation, especially related to national security, are increasingly material; voluntary disclosure and strong governance records may mitigate review delays or rejection risks.
• Preparing ahead for the ACCC notification requirements and integrating competition analysis into deal planning—even when not strictly required—is now essential to avoid regulatory surprises in early 2026.

Open questions that remain:

• How do processing times vary for national security cases versus non-sensitive commercial ones? Detailed sectoral and sensitivity breakdowns are not publicly disclosed.
• To what extent are withdrawn applications influencing average processing time statistics—are they masking bottlenecks or enforcement friction?
• How will investor behaviour change in response to the stricter competition analysis requirement through the portal and the ACCC regime starting 2026? Will that deter certain investments or lead to structural changes in deal design?
• What long-term trends are emerging in source country risk perceptions, especially as geopolitical concerns increase around foreign investment?