17 Jun 2020

Changes to rules around overseas investment in NZ

11:15 am on 17 June 2020

Overseas investment rules have been temporarily eased to help with the economic recovery of Covid-19.

New Zealand planes at Auckland International Airport, the largest and busiest airport in New Zealand.

Auckland Airport. Photo: 123RF

A new notification scheme requires investors to tell the Overseas Investment Office (OIO) about investments in more than 25 percent of a business here, or more than a quarter of a business's assets, or increasing an existing shareholding.

Previously the OIO screened transactions over $100m or involving sensitive land sales.

The new rules will be reviewed every 90-days and remain only while it is necessary to protect the national interests through the aftermath of the pandemic.

Most investors will know within 10-working days if their transaction can proceed. A smaller number of transactions needing closer inspection may take a further 30-working days.

The existing rules have been simplified so that some low-risk investments no longer need consent.

OIO Group Manager Vanessa Horne said the changes will not necessarily mean more investment from overseas.

''The policy intention behind the changes is to make sure New Zealand attracts the right type of overseas investment and the government is concerned as we hit a post-Covid recovery period that that is a really important focus for our economic recovery.''

Horne said the OIO has increased ability to take action against those who break the rules.

''Fines that are available have gone up to $500,000 for an individual and up to $10m for corporates, so I think it's a really, really clear signal that the government is looking particularly at those corporate entities to make sure they do the right thing.''

A national interest assessment, which is a permanent change, has been introduced to protect strategically important assets.

''Electricity supply companies, or the often quoted Auckland Airport, so things that are really, really important to New Zealand that we do want to make sure for overseas investors purchasing those that they are the type of investor that will bring benefits to New Zealand and do the right thing by our economy in doing so.''

''All of this (the changes) is focused on protecting New Zealand's taonga for future generations.''

Vanessa Horne said while the temporary notification scheme will speed up the process, it will not mean more decisions will need to go to the minster for approval.

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