Tougher national security tests for foreign investors could slow the pace of some deals, lawyers say.

Under proposed rules that will take effect in January, foreign investors seeking to acquire a "sensitive national security business" will have to pass a new national security test, regardless of the value of the investment.

Previously, investors only faced scrutiny if an acquisition was above A$275 million or above A$1.2 billion for investors from countries with which Australia has a free trade agreement.