Kia ora katoa. In New Zealand, direct overseas investment accounts for almost one hundred and thirteen billion dollars or 40% of our economy.
The Overseas Investment Act regulates a small but important part of that investment large business transactions and land purchases.
Following the extraordinary effects of Covid-19 and what is a time of rapid change, overseas investment is important to support New Zealand's economic recovery.
Businesses need to access capital quickly, continue to grow and to keep more New Zealanders in jobs.
The protection of New Zealand's national interests during the economic recovery is also important.
There are broadly four new legislative changes that have been introduced to the Overseas Investment Act.
The changes impact overseas investors looking to invest in New Zealand businesses, and I'll go through each of them now.
Firstly, a temporary notification scheme has been established for business investments that are not ordinarily screened.
Overseas investors must now notify the Overseas Investment Office of any investment that would result in them owning more than 25% of a New Zealand business or its assets.
We must also be notified by overseas investors of any increase to any existing holding beyond 50% or 75% or up to 100%. This must occur before the transaction is given legal effect.
If the transaction is not in the national interest that may be blocked, or conditions might be imposed to make sure that it is in the national interest.
The temporary scheme will be reviewed every 90 days.
It will remain in place only as long as it is necessary to protect the national interests of New Zealand while the Covid-19 pandemic and the economic aftermath continues to have a significant impact in New Zealand.
Secondly, a national interest test has been put in place for certain types of transactions that would ordinarily be screened under the Act.
This test is in addition to current tests and ensures that overseas investments and strategically important assets are in line with New Zealand's national interests.
Thirdly, processes have been streamlined to make it easier for New Zealand businesses to access equity and debt.
These changes will be welcomed by current investors and their advisors.
For example, the requirement to screen low-risk transactions like small changes to an existing shareholding has been removed. And, the amount of information that investors need to provide in their applications has been reduced, among other things.
And finally, the Overseas Investment Office has been given stronger enforcement powers to take action against investors who do not comply with the Act.
It's important their overseas investors follow through on their promises to deliver benefits to New Zealand.
These new powers provide additional tools for us to ensure that they do.
You can read more about these changes on our website: www.linz.govt.nz/oionewrules
The economic aftermath of Covid-19 will continue to have a significant impact on New Zealand for some time to come.
These changes to the Overseas Investment Act enable New Zealand to be open for business for productive overseas investment while protecting New Zealand's taonga for future generations.
The Overseas Investment Office is here to make sure that New Zealand benefits from it.
Ka kite ano.