Despite our borders being more or less closed for over a year, overseas investors will play a crucial role in the recovery and growth of the New Zealand economy. The need to balance support for high-quality overseas investment, whilst protecting New Zealand’s national interests was one of the reasons for the Overseas Investment (Urgent Measures) Amendment Act 2020.
Simplifying the process
The new overseas investor test came into force on 22 March 2021. This is one of the last measures of the Overseas Investment (Urgent Measures) Amendment Act 2020 to be implemented.
It is intended to simplify the process for overseas investors applying for consent from the Overseas Investment Office (OIO) to acquire sensitive New Zealand assets.
The current open-ended investor test often results in investors spending a considerable amount of time identifying and considering irrelevant matters, resulting in significant compliance costs.
The OIO will now assess overseas investors against 12 prescribed factors relating to character and capability to determine whether overseas investors are unsuitable to own or control any sensitive New Zealand assets. The test is intended to focus on material risks only.
Temporary measures still in place
The temporary emergency notification regime for screening overseas investment transactions will remain in place until at least 25 May 2021. If you are an overseas investor acquiring more than 25% of an existing New Zealand business or its assets (or if you are increasing an existing interest beyond certain thresholds) you still need to notify the OIO and obtain clearance. Investors need to ensure any transactions include appropriate conditions relating to OIO clearance.
If you have any questions about the new investor test and how this may impact your application, give our Property Team a call.