FIRB and ACCC: Two Regulatory Gates for Australian Startup Deals

By Daniel Okafor

Australian startup deals now run through two separate regulatory gates before money moves. Law firm Corrs Chambers Westgarth has laid out what founders and investors need to know about the Foreign Investment Review Board (FIRB) and the Australian Competition and Consumer Commission (ACCC).

The two bodies ask different questions. FIRB screens foreign money entering Australian companies. The ACCC reviews deals that could lessen competition in a market. A single investment round can trigger both reviews at once.

What does FIRB actually screen?

FIRB sits within the Treasury's foreign investment framework. Its job is to test whether a foreign acquirer of an Australian asset poses a national security or national interest risk.

For startups, the trigger point is ownership. A foreign investor buying a stake in an Australian company may need FIRB approval before the transaction proceeds. The applicable monetary thresholds and screening obligations depend on the identity of the investor and the nature of the target's business, Corrs explains.

Startups working in sensitive sectors face the tightest scrutiny. Companies with data, technology or assets touching national security can fall into a mandatory notification category, where approval is required regardless of deal size.

Where does the ACCC come in?

The ACCC polices a different risk. It administers the merger review provisions of the Competition and Consumer Act, which prohibit acquisitions that would have the effect of substantially lessening competition in any Australian market.

Not every startup investment raises competition concerns. But strategic investments often do. A corporate venture arm taking a board seat in a rival's supplier, or an acquirer buying a nascent competitor, is exactly the fact pattern the ACCC examines.

Corrs flags that investors should assess competition risk at the term-sheet stage, not after signing. Deal timing, closing conditions and confidentiality obligations all shift once an ACCC review enters the picture.

Why do the two regimes overlap?

Foreign capital dominates large portions of Australian venture funding. That means many startup rounds involve a foreign investor, which pulls the deal toward FIRB, while the same investor may hold competing assets in Australia, which pulls it toward the ACCC.

The two reviews run on separate tracks, with separate tests and separate timelines. Approval from one body does not guarantee clearance from the other.

Founders have their own exposure. A founder who signs a deal without building regulatory conditions into the contract carries the risk if a review blocks or delays settlement.

What should deal parties do before signing?

Corrs points founders and investors toward early structuring. The practical checklist from the firm's guidance includes:

• Identify whether the investor is foreign for FIRB purposes before the round is priced.
• Check whether the target operates in a national security business, which can trigger mandatory notification.
• Assess the investor's existing Australian holdings for competition overlap.
• Draft closing conditions that reflect the actual approval path, not a standard template.
• Budget time for both reviews in the deal timetable.

What is the practical takeaway?

Regulatory review is now a deal variable, priced alongside valuation and dilution. Founders who treat FIRB and ACCC clearance as an afterthought discover the cost late, when a signed deal stalls at settlement.

Corrs' guidance signals that the cleanest mitigation is sequence: run the foreign investment and competition analysis before the term sheet is executed, so the approval path is visible to both sides from day one.