Purpose of the national interest test
The national interest test determines whether an overseas investment transaction may be contrary to New Zealand’s national interest. It is assessed in stages depending on the risk of the transaction, with the majority of transactions being consented at stage one.
What does the national interest test apply to?
The national interest test applies to transactions involving significant business assets and sensitive land, other than farm land and most residential land. For these transactions, the national interest test is usually the only test the applicant needs to meet.
The national interest test can also apply to other overseas investment transactions if they are transactions of national interest. A transaction may be defined as a transaction of national interest by:
- The mandatory criteria in the Act under s 20A;
- The Minister under s 20B; or
- LINZ after an initial national interest assessment under s 19A.
How the national interest test is met
The national interest test is met if:
- After completing an initial national interest risk assessment, we consider that a national interest assessment is not required; or
- After a national interest assessment has been completed, we do not have reasonable grounds to consider that the transaction may be contrary to New Zealand’s national interest; or
- After escalation to the Minister, the Minister considers the transaction is not contrary to the national interest.
How is the national interest test assessed
Applications are assessed in two stages, with most investments being granted consent at stage one. We can grant consent at any stage if the national interest test is met, but only the Minister of Finance can decline consent.
Stage one – initial national interest risk assessment
At stage one, we will assess whether the transaction may include a risk to New Zealand’s national interest. Stage one is about identifying risks.
If we consider a national interest assessment is not required then we will grant consent to the transaction at this stage.
If we identify a risk, or if we do not have sufficient information to confirm a risk is not present, then we may escalate the application for a national interest assessment.
Stage two – national interest assessment
At stage two, the regulator must assess the risks identified at stage one. To find out more about stage two, including how other transactions are identified as transactions of national interest.
If we do not have reasonable grounds to consider that the transaction may be contrary to New Zealand’s national interest, we will grant consent at stage two. Otherwise, we must refer the application to the Minister of Finance for decision.
Fees
Find out information on the Overseas Investment fees framework.