Foreign investment shake-up could be fatal to startups
+ Proposed changes to Australia’s foreign investment rules could prove fatal for some Australian startups, with quantum computing and cybersecurity outfits particularly worried about the measures choking off their access to funding.
Mr Biercuk said he understood that critical infrastructure and assets related to existing defence supply chains must be protected but added that new companies working on exploratory technology shouldn’t be captured under the regime. “It’s just an absolutely backwards policy that has unintended consequences for our sector,” he said. “It disincentivizes foreign investment because what investor wants to wait six or nine months with no security on whether they’re going to get a deal? They’ll take the other deal and take our competitor who doesn’t face this.”
+ Federal Treasurer Josh Frydenberg announced in June plans to impose a national security test on foreign investors in the new year. The proposed measure will require mandatory notification of any proposed direct investment in a ‘national security business’ and will require startups operating in the energy, telecommunications, ports, water and data sectors to seek Foreign Investment Review Board (FIRB) approval for any funding.
+ Professor Michael Biercuk, founder of startup Q-Ctrl, said quantum computing startups would be caught by this definition.
+ Submissions from parties including the Law Council of Australia and Australian Investment Council argued that the definition of a ‘national security business’ was very broad and open to interpretation making compliance difficult and costly.
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