OIO puts enforcement at the forefront in busy 2019

30 January 2020

The Overseas Investment Office (OIO) has released its overseas investment data for 2019.

The OIO took an increased number of enforcement actions against overseas investors who didn’t follow the rules during a busy 12 months for the regulator.

Group manager for the OIO, Vanessa Horne, says the office took 45 enforcement actions last year, up from 39 actions in 2018. Actions included requiring investors to sell assets.

Investigations into unlawful activity typically take many months, sometimes years, to complete.

“It’s a privilege for overseas people to invest in New Zealand,” Ms Horne says. “The OIO ensures investors get consent when they should, provide honest and complete information, and deliver on the commitments they make when they get OIO consent.”

“The OIO has stepped up its efforts at enforcing the Overseas Investment Act over the last few years and we will continue to take action against those who don’t abide by the law.”

In 2019 the OIO forced six investors to dispose of assets, took civil proceedings or reached settlement agreements with five investors, issued five late filing penalties, and issued 29 formal warnings or compliance letters.

Enforcement actionActions from 1 January - 31 December 2019
Civil proceedings / Settlement5
Compliance letter / Formal warning29
Disposal6
Late filing penalty5

In the past year the following big cases were completed:

2019 by the numbers

The OIO oversaw more than $17.5 billion of overseas investment in New Zealand in 2019. This is up on 2018, when the gross investment was $12.5 billion.

Ms Horne says the OIO’s role is to protect New Zealand’s sensitive land and assets while supporting high quality overseas investment.

“Overseas investment can bring many benefits, including access to global markets, the creation of jobs and introduction of new technologies, “Ms Horne says. “This needs to be carefully balanced with protecting our most sensitive land and major assets.

The office made decisions on 145 applications from overseas people wanting to invest in New Zealand’s sensitive land and assets in 2019. This increased from 97 applications in 2018.

In late October 2018, changes were made to the Overseas Investment Act that boosted the OIO’s functions. This contributed to the increase in the number of applications.

In 2019, the most valuable significant business assets involved in OIO consents, included:

All applications to acquire significant business assets were approved in 2019.

Most applications to acquire sensitive land were approved in the last 12 months, however six applications for sensitive rural land were declined. These applications were declined because the investment wasn’t going to create a substantial and identifiable benefit. In 2017 the Government raised the threshold for acquiring rural land.

The top three countries by net investment in 2019 were Canada, Singapore and China.

About 15 to 18 percent of overseas investment in New Zealand comes through the OIO. More information about the types of investment that need consent can be found at Overseas Investment.

In 2019, the OIO received 278 applications and approved 259 overseas people to buy homes. Under new rules most overseas people can’t buy homes in New Zealand. However, a small number of people are eligible to apply to the OIO to buy a home.

Timeframes

Ms Horne says the OIO is working to reduce the amount of time it takes to process applications.

“The time it takes the OIO to process applications has improved over the last few years. During 2019 the OIO’s average time for processing applications for Significant Business Assets was 21 working days.

“Applications for sensitive land are more complex but the time we spend assessing these has also improved.”

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