History of the Overseas Investment Office

Learn about the history of the Overseas Investment Office (OIO) and the former Overseas Investment Commission (OIC).

2005 – present

In 2005 the OIC was disestablished and the OIO came into effect, operating out of LINZ. The OIO dealt increasingly with asset and land purchases, and the move to LINZ was seen as complimentary to this changing role.

The new legislation governing the OIO:

• encouraged overseas investment in New Zealand, recognising the growth benefits this can bring
• ensured that the value of sensitive New Zealand property is recognised and enhanced by overseas investors
• ensured appropriate governance arrangements.

The changes to the legislation governing the OIO can be broadly put into two categories - operational and administrative.

Operational changes:

• addition of new “investment will benefit New Zealand” factors
• introduction of new “sensitive land” types
• requirement to offer special land back to the Crown
• increase in the significant business assets threshold from $50m to $100m
• increased monitoring and enforcement role.

Administrative changes:

• disestablishment of the OIC
• transfer of the regulatory function to LINZ.

 

1973 - 2005

The OIC was established in 1973 under the Overseas Investment Act 1973 (repealed), operating out of the Reserve Bank. A review of the 1973 Act looked at ways of better providing protection to places of historic, cultural or environmental interest, while also encouraging overseas investment where it makes a positive contribution to the New Zealand economy.

The review considered many specific issues, including:

• what assets are of critical interest and what assets are being unnecessarily scrutinised, while taking into consideration New Zealand’s international treaty obligations
• the necessary criteria to ensure protection for specific asset types, such as sensitive land
• the appropriate level of monitoring and follow up on approved investments.

Several issues with the 1973 Act where highlighted, such as:

• important aspects of assets, such as heritage value and public access were not considered, with the legislation having focused primarily on economic development stemming from land purchases
• the monitoring and enforcement provisions did not require the proposed land management plans of the applicant to be undertaken and completed to a reasonable standard
• the courts lacked the ability to impose penalties on any breaches by the applicant.

The review of the 1973 Act led to the enforcement of the Overseas Investment Act 2005 on 21 June 2005.