Find out about when the benefit to New Zealand test applies and the different benefits
The benefit to New Zealand test is applied to transactions involving sensitive land (that do not fall within another pathway) or fishing quota. It establishes a framework for determining whether the investment will be beneficial by assessing applications against 7 factors.
How is the benefit test assessed?
The benefit test is met where:
- the overseas investment will, or is likely to, benefit New Zealand (or any part of it or group of New Zealanders), and
- if the relevant land is, or includes, residential land, the relevant Ministers are satisfied that the conditions imposed on the consent will be, or are likely to be, met.
Whether an investment is likely to benefit to New Zealand is assessed against seven broad factors.
When assessing the benefits, relevant decision makers will:
- consider all the factors to decide which are relevant to the investment and their relative importance
- compare the likely benefits of the investment to the current state
- assess whether the likely benefits of the investment are proportionate to the sensitivity of the land and the nature of the transaction.
Each application is assessed on its own facts in the context of the proposed overseas investment.
What are the benefit factors?
There are seven factors outlined in section 17 of the Overseas Investment Amendment Act 2021 that an investment will be assessed against.
The factors are broad and are intended to enable a holistic assessment of whether the benefit to New Zealand test is met. Section 17 gives examples of the types of benefits that may arise under the factors, but these are non-exhaustive. You may rely on other types of benefits, provided you can establish a specific benefit to New Zealand (including under the ‘consequential benefits’ factor, where none of the other factors apply).
1. Economic benefits
Will the investment result in, or is it likely to result in, economic benefits for New Zealand? For example:
- the creation or retention of jobs
- the introduction of technology or business skills
- increased productivity
- increased export receipts
- increased processing of primary products
- a reduced risk of illiquid assets.
2. Benefits to the natural environment
Will the investment result in, or is it likely to result in, benefits to the natural environment? For example:
- protection of indigenous flora and fauna
- improved water quality
- erosion control.
3. Public access
Will the investment result in, or is it likely to result in, continued or enhanced access by the public within or over the sensitive land, or the features giving rise to the sensitivity? For example, access for the purposes of:
- undertaking stewardship of, or exercising kaitiakitanga in relation to, historic heritage or the natural environment.
4. Protection of historic heritage
Will the investment result in, or is it likely to result in, continued or enhanced protection of historic heritage in or on the relevant land? For example:
- agreement to execute a heritage covenant, or comply with existing covenants
- agreement to support entry to wāhi tūpuna, wāhi tapu, or wāhi tapu areas on the New Zealand Heritage List/Rārangi Kōrero
- taking other actions under the Heritage New Zealand Pouhere Taonga Act 2014 to recognise or protect heritage values
- agreement to land being set apart as a Māori reservation.
5. Advancing a significant Government policy
Will the investment, or is it likely to, give effect to or advance a significant government policy?
6. Oversight or participation by New Zealanders
Will the investment involve, or is it likely to involve, oversight of, or participation in, the overseas investment by New Zealanders?
7. Consequential benefits
Will the investment result in, or is it likely to result in, other consequential benefits to New Zealand? For example:
- benefits that are likely to arise from the investment that do not fit within one of the other factors.
If the sensitive land you intend to purchase is, or includes, farm land exceeding five hectares, the Farm land benefit test will usually apply.
The Farm land benefit test requires that the Economic benefits and Oversight or participation by New Zealanders factors be given high relative importance. You must also establish a substantial benefit to New Zealand in relation to one or more of those factors.
If you are applying to acquire fishing quota the benefit to New Zealand test applies. All factors are applicable apart from: Public access and Protection of historic heritage. Section 57H of the Fisheries Act 1996 gives specific examples of benefits that may arise under each factor for fishing quota applications.
Water bottling or bulk water extraction
If the investment involves water bottling or bulk water extraction for human consumption, an additional factor is whether the overseas investment will have, or is likely to have, a negative impact on water quality or sustainability.
- This factor is relevant to all investments involving the extraction of water for bottling, or other extraction of water in bulk for human consumption.
- Any negative impact on water quality or sustainability will be deducted from the overall benefit of the investment to New Zealand.