Australia relaxes approval process for foreign LPs

Funds that have foreign investors will no longer have to notify the government of each acquisition.

Private equity funds with foreign investors are no longer required to notify the Australian government of each individual acquisition they make, according to a client note from Australian law firm Clayton Utz.

Instead funds with foreign investors can apply for an exemption certificate in which the Treasurer can grant pre-approval for multiple purchases in one application.

Funds will be subject to series of legal tests laid out in the Foreign Acquisitions and Takeovers Regulation. These include a national interest test on the investor, the target business and relevant industry.

The Treasurer will then carry out a risk assessment before an exemption is granted.

The changes came into force on July 1.