Overview
The Investee Due Diligence Guidance (the guidance) helps organisations assess potential investors for commercial and national security risks. Some investors may seek ownership, control or influence in ways that could harm your organisation and Australia’s national interests.
This guidance supports organisations, particularly those working with critical technologies, to recognise and manage these risks when engaging with investors. Trusted domestic and foreign investment remains vital to Australia’s growth; this guidance helps organisations distinguish and manage risk.
Using the Investee Due Diligence Guidance
This guidance provides a consistent approach to identifying and managing risks with potential investors. Organisations can use it to support due diligence processes and risk management frameworks, or adopt parts relevant to the organisation. The guidance is optional. It does not create any regulatory or reporting requirements.
You can use it if you are considering:
- a new investment
- a follow-on round
- assessing existing capital investments
- forming strategic partnerships.
Who should use this guidance:
We have designed the guidance primarily for:
- small and medium enterprises (SMEs)
- startup businesses
- universities and research organisations
- larger enterprises operating in or around critical technologies.
When to use it:
You can apply the guidance when assessing new investment approaches, or when talking to and reviewing existing investors. You can also use it when reviewing universities and research organisations, and larger enterprises working with or around critical technologies.
The guidance outlines four components to help organisations assess and manage risk with potential investors:
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Pre-investment considerations – organisations need to understand their security posture, determine their risk appetite, and define their risk management processes before seeking investment.
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Investee due diligence – supports assessing the investor, their networks, behaviour, and any conditions around the investment.
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Risk management – provides guidance on identifying appropriate actions to reduce potential security, commercial, and governance risks.
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Post-investment considerations – encourages ongoing monitoring and review across the investment lifecycle. This includes identifying trigger events that may change your risk exposure.
Note: Time required to conduct due diligence will vary by deal complexity, investor transparency, sector risk, and available internal capability.
Bad-faith investors
Malicious control or influence can arise from any size of investment. This includes minority holdings and may originate from both Australian and foreign investors.
Sectors at higher risk include:
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Critical technologies in the national interest – high strategic value and close collaboration with allies make these targets for technology transfer.
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Dual-use and military technologies – civilian technologies that can enhance military or intelligence capabilities. If uncertain, refer to the
Defence and Strategic Goods List.
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SMEs and startups – may lack resourcing to conduct thorough due diligence
and are more susceptible to time pressure and obfuscation by investors.
Note: The definition of bad-faith investors is specific to this guidance. For more information see Information Sheet for Critical Technology Sectors – Bad-faith Investors.
Working together
The Department of Home Affairs’ Technology Foreign Interference Taskforce (TechFIT) works with Australia’s technology sector to safeguard Australia’s technology, intellectual property, and innovation ecosystem. TechFIT provides support and resources to help organisations recognise foreign interference risks. You can contact the team at TechFIT@homeaffairs.gov.au.
Documents
Feedback
We welcome feedback to help strengthen and refine this guidance. You can send feedback in writing or by using the feedback button at the bottom of this webpage
