Insights on FIRB Foreign Investment final quarter statistics for FY23

This article shares our insight on some of the latest statistics coming out of FIRB, following the release of Treasury’s final quarterly report on Commercial Foreign Investment for FY23.

Global commercial foreign investment spread

Japan had the highest value of approved investment proposals for the last quarter of FY23 at $11.7 billion, leading it to rank fourth overall for the year with $14 billion of approved proposals.  This is indicative of the strengthening ties between Japan and Australia (and the indo-pacific generally) over recent years, with Japan now Australia’s second-largest trading partner (according to the Australian Government).  Several geopolitical factors influenced this shift, including the trade restrictions which China imposed on Australia over the past few years, and the fall in Japan’s crude oil and coal imports from Russia.

Singapore and the US had the second and third highest values for the last quarter of FY23, at $3.6 billion and $3 billion respectively, and the US overwhelmingly had the highest value of approved investment proposals for FY23 at $34.5 billion (being more than double the $14.4 billion from each of Singapore and Canada).  Although this increase reflects the continued strength of these economies, US investment has dropped off compared to FY22 levels, where it was $118.9 billion.  This is likely impacted by the slowing M&A activity in FY23 off the back of a COVID induced boom in activity during FY21 and 22.

Similarly, the total value of commercial proposals for FY23 reached $171.5 billion, sourced from a total of 1,310 proposals. This is lower than FY21 and FY22 (where the total investment value was $227.2 billion and $330.5 billion respectively), however those periods were unusually affected by the temporary zero-dollar thresholds imposed during the COVID pandemic.

The value of China’s commercial investment picked up in FY23 at $9.5 billion (compared with $4.6 billion in FY22) and it will be interesting to see if Chinese investment returns to pre-2020 levels in FY24, now that the country’s relationship with Australia is by all accounts in the process of being repaired.


Although only 42% of the total number of investment proposals approved in the last quarter of FY23 had conditions attached, this comprised 83% of the total value of investment proposals approved, indicating that FIRB are more likely to attach conditions to higher value proposals.

Residential foreign investment

China has continued to dominate the residential real estate sector, being the largest source of investment approved by FIRB for the last quarter of FY23 at $1.1 billion and the last 3 financial years, in terms of both the number of proposals and the aggregate value.  Hong Kong were the second largest source for the last quarter of FY23 at $0.2 billion.  Interestingly, overall approved foreign investment in residential real estate was higher in FY23 (totalling $6 billion) than the two previous years (totalling $4.4 billion and $4 billion respectively), contributing to the demand for residential property in Australia and suggesting this market remains attractive to Asia-pacific investors.

Hottest sectors

In FY23 the hottest industry sectors by proposal value remained Commercial Real Estate, Services, and Finance & Insurance, which is consistent with the last few years.

Services was the largest target sector for approved investment proposals in the last quarter of FY23, while foreign investment approvals in the finance and insurance sector have fallen from the highest sector in the previous quarter to become the lowest sector this quarter.  This swing is consistent with what we are seeing in the market, as stubborn inflation and rising interest rates provide ongoing uncertainty, particularly for the finance and insurance sectors.

FIRB commercial investment processing times

FIRB reports that the median processing time for applications is now 36 days (which has reduced from 52 days in FY21 and FY22). Whilst this is promising, it’s worth noting that 21% of cases in the last quarter took more than 60 days to process, and 14% of those exceeded 91 days.  Therefore, we would still caution clients to expect an approval time of between 2 to 3 months for M&A transactions, particularly those involving national security targets and/or ‘foreign government investor’ acquirers.

FIRB has also confirmed that the Treasury Department (which is responsible for handing down foreign investment decisions) will be closed from the afternoon of Friday 22 December 2023 and will re-open on Tuesday 2 January 2024.  During this shut down period, foreign investment proposals will not be processed. As a result applications submitted during the remainder of 2023 are unlikely to be processed until well into the new year.

National security

Australia’s foreign investment framework was expanded in 2021 to make more types of transactions subject to mandatory notification and to introduce a scheme for voluntary notification, in each case on national security grounds.  As a result, there has been an increase in the volume of national security proposals which have been approved since FY21.  Interestingly however, national security investment proposals only comprised 7.4% (by number) of the total number of approvals for the last quarter of FY23, with most of these proposals being mandatory notifications.

The full report is available to read here.