Australia Country Commercial Guide
Learn about the market conditions, opportunities, regulations, and business conditions in australia, prepared by at U.S. Embassies worldwide by Commerce Department, State Department and other U.S. agencies’ professionals
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Investment Climate Statement (ICS)
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The U.S. Department of State’s Investment Climate Statements help U.S. companies make informed business decisions by providing up-to-date information on the investment climates of more than 170 countries and economies. They are prepared by our embassies and consulates around the world and analyze each economy’s openness to foreign investment. Topics include:

•    Openness to, and Restrictions upon, Foreign Investment, 
•    Investment and Taxation Treaties,
•    Legal Regime,
•    Industrial Policies,
•    Protection of Property Rights,
•    Financial Sector,
•    State-owned Enterprises,
•    Corruption,
•    Labor Policies and Practices,
•    Political and Security Environment, and
•    U.S. International Development Finance Corporation (DFC) and Other Investment Insurance or Development Finance Programs

Each statement provides a starting point for U.S. firms and offers a point of contact at the relevant U.S. embassy or consulate abroad.

These reports are also a resource for foreign governments to create business environments that ensure fair treatment for the United States and our companies and investors. 

To access the full Investment Climate Statement, visit the U.S. Department of State Investment Climate Statements website.

Executive Summary - Australia

Australia is generally welcoming to foreign investment, which is widely considered to be an essential contributor to Australia’s economic growth and productivity. The United States is by far the largest source of foreign direct investment (FDI) for Australia. According to the U.S. Bureau of Economic Analysis (BEA), the stock of U.S. FDI totaled $193 billion in 2023. The Australia-United States Free Trade Agreement (AUSFTA), which entered into force in 2005, establishes higher thresholds for screening U.S. investment for most classes of direct investment. While welcoming toward FDI, Australia does apply a “national interest” test to qualifying investment through its Foreign Investment Review Board screening process.

Various changes to Australia’s foreign investment rules, primarily aimed at strengthening national security, have been made in recent years. All foreign investments in sensitive industries now require screening, regardless of their value or national origin. Despite the increased focus on foreign investment screening, the rejection rate for proposed investments has remained low and there have been no cases of investment from the United States being rejected in recent years, although some U.S. companies have reported greater scrutiny of their investments in Australia. In May 2024, the Australian Treasurer released reforms aimed at streamlining and enhancing Australia’s foreign investment framework.

These reforms are designed to make the investment process more efficient and less costly for investors. 
Australia has increased funding for clean technology projects and both local and international companies can apply for grants to implement emission-saving equipment in their operations. Australia legislated both a national net-zero emissions target and an interim 2030 target in June 2022. Australia’s eight states and territories have similarly adopted net-zero targets and a range of interim emission reduction targets, accompanied by various incentive schemes available to U.S. investors.

The Australian government is strongly focused on economic recovery from the COVID-driven recession Australia experienced in 2020, the country’s first in three decades. The pandemic and the ongoing conflict in Ukraine have also prompted the Australian government to implement measures to secure critical supply chains. These have included grants and other funding support such as the National Reconstruction Fund, passed into law in March 2023, to encourage new investments in these supply chains. U.S. involvement and investment in these fields are welcomed.

The Australian Parliament approved the government’s new economic plan, Future Made in Australia (FMIA) . Through this plan, $15 billion (AUD 22.7 billion) will be invested primarily in natural resources and critical minerals processing, renewable energy, and industrial innovation and technology. The legislation includes production tax incentives for renewable hydrogen and critical minerals for up to 10 years, until 2040. The government has indicated that it welcomes foreign investment into these industries and that foreign businesses will be eligible for these investment incentives.

Australia’s inflation rate has fallen from around four percent in early 2024 to 2.4 percent in December 2024. Although Australia’s labor market remains tight, with the unemployment rate rising 0.5 percent to end the year at 4.0 percent. This has contributed to a skills shortage, with businesses across the economy complaining of a lack of access to suitable employees. Despite these challenges, Australia’s economy grew by 1.3 percent in 2024, according to the Australian Bureau of Statistics. 

To access the ICS, visit the U.S. Department of State Investment Climate Statements website.

Political and Economic Environment

Please find information on the political environment in Australia at the State Department’s Countries & Areas website.
 

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