Australia

Investing

FDI in figures

Australia is ranked 13th in the world but 3rd in the Asia-Oceania zone, behind Hong-Kong and China (since 2005) in foreign direct investment (FDI). It consolidated AUD 315.397 billion at the end of 2006 (EUR 190 billion). Australia is a traditional place to invest. Its economic liberalism, its stability and the transparency of its legal system, added to strong economic growth for more than 15 years, make up for the narrowness of its market and its geographical isolation, and make it a desirable destination.

Foreign Direct Investment	2004	2005	2006
FDI of inward flow (millions USD)	36,007	-35,160	24,022
FDI inward stock (millions USD)	n.c.	n.c.	246,173.0
Performance Index*, world ranking	50	129	115
Potential Index**, world ranking	18	18	n.c.
Number of Greenfield investments	139	110	126
FDI inwards (in % of GFCF)	21.6	-19.2	11.9
FDI stock (in % of GDP)	n.c.	n.c.	32.6

Source: UNCTAD, World Investment Report

Note: * The UNCTAD Inward FDI Performance index is based on a ratio of the country's share in global FDI inflows and its share in global GDP. ** The UNCTAD Inward FDI Potential index is based on 12 economic and structural variables such as GDP, foreign trade, FDI, infrastructures, energy use, R&D, education, country risk.

Why you should choose Australia

Strong points: Strong growth, legally reassuring and stable business environment, a practical access platform for certain markets (New Zealand and islands of the Pacific). Australia is also home to the second money market in Asia.
Weak points: Reduced competition in some sectors can limit returns on scale. Lack of investment in infrastructures sometimes slows down growth in some sectors.
Government measures to motivate or restrict FDI: Foreign companies benefit from aid for productive investment, R&D, professional training, job creation, etc. The number of formalities for setting up foreign companies has been reduced.
Bilateral investment conventions signed by Australia: Yes

Administrative procedures relative to foreign investment

Freedom of establishment: Yes
Acquisition of holdings: There is a mixed regime which has been made more flexible since it was set up in 1975. However, the purchase of a local firm by a foreign company can always be refused by the controlling authority, on the grounds that it would be contrary to national interests.
Consult the FIRB (Foreign Investment Review Board) website.
Obligation to declare: The agency for the promotion of foreign investment in the country gives information about the authorizations necessary for setting up. Some investments must be declared to the FIRB.
Acquisitions, substantiel acquisitions of holdings, and taking control of Australian companies whose assets are valued at more than 50 million AUD; the creation or setting up of a new business when it goes over 10 million AUD (over 100 million AUD of investment the FIRB will make a detailed study); direct investments carried out by foreign governments must be declared.
Competent organization for the declaration: FIRB
Requests for specific authorizations: The media, the banking sector, air transport and mining concessions are subject to restrictions; the FIRB can provide details.