The Government has announced a dramatic shift in New Zealand’s approach to foreign investment, with a new starting point that investment can proceed unless there is an identified risk to New Zealand’s national interests. The announcement can be viewed here.

Designated the most restrictive country in the OECD for overseas investment, New Zealand is currently ranked 38th out of 38 for investment openness. The current overseas investment regime has faced criticism for imposing significant compliance costs, delays, and uncertain outcomes.  As a result of this, Prime Minister Christopher Luxon wants to attract foreign capital to New Zealand by ensuring that our economy is easier for foreigners to invest in and referred to an Irish-style welcome for overseas investors into New Zealand.

What else can we expect

If the Government can get buy-in from NZ First to reform the Overseas Investment Act, we would expect to see directives outlining the following:

• What investments need to be notified.
• The information that will need to be provided to the Overseas Investment Office.
• When notifications of a potential investment can be made.
• The timeframes for reviewing any notifications.
• What existing directives will remain (eg, farmland advertising).
• What penalties will be imposed for failures to notify.

Next steps

The Government is now planning to develop detailed reform proposals. 

There will be opportunity to submit on the proposed reforms during the select committee process.  The Overseas Investment Office website will be updated throughout the reform process: www.linz.govt.nz/our-work/overseas-investment-regulation/reform-overseas-investment-act

We will keep you informed as this develops.

Special thanks to Catherine Bryant and Sarah Heslin for their assistance in writing this article.