New Zealand encourages overseas investment in forestry and offers streamlined ways to do this.
Generally overseas investors buying fewer than 1000 hectares of forestry rights per calendar year are exempted from needing consent.
Overseas investors can apply to the Overseas Investment Office for consent to buy or lease land that is in forestry, or land to be used for forestry, or to buy forestry rights.
There are different consent options, depending on what the investor wants to do with the land.
Overseas investors can apply to the OIO using their choice of 3 consent types to buy or lease land for forestry purposes (including converting farmland to forestry) or purchase forestry rights. These consent types are known as:
- Standard benefits test
- Special forestry test
- Modified benefits test
Australian citizens and some Australian entities are exempted from the need to obtain consent for forestry rights only (rights to establish, maintain and harvest trees on someone else’s land).
Anyone making an application, or relying on an exemption, should seek expert legal and land advice as early as possible.
This is the most complex test of the three. It is the only option if you intend to acquire sensitive land for both forestry and another purpose, such as farming, or if you do not intend to replant after harvest.
The investment must be likely to result in substantial and identifiable benefit to New Zealand, measured against 21 benefit factors).
The assessment will include a comparison between the benefits your investment will bring and the benefits that would occur without the investment, such as if a hypothetical New Zealand investor purchased the land.
The fee for this consent application is usually between $40,500 and $49,000 depending on the value of the land, and whether the decision to grant consent lies with Ministers.
This is the most streamlined test of the three and could be used for purchasing land to plant a forest on. You could also use this test to buy forestry land and continue to operate it with existing arrangements remaining in place.
Unique to this test is the need to implement and maintain certain arrangements for the land, such as public access, protection of habitat for indigenous plants and animals, and historic places, as well as log supply arrangements.
The assessment is solely criteria based and you won’t need to include a comparison between the benefits your investment will bring, and those provided by the vendor or a New Zealand investor. You would be required to replant after harvest, unless exempted, and use the land exclusively or nearly exclusively for forestry activities. The land can be used for accommodation only to support forestry activities.
The fee for this consent application is $34,100.
This test is suitable for investors who wish to use the land only for forestry activities, but cannot implement or maintain existing arrangements relating to the land, such as agreements for public access.
The investment is likely to result in substantial and identifiable benefit to New Zealand measured against 21 benefit factors.
The assessment will include a comparison between the benefit to New Zealand your investment will bring, and the benefits likely to occur if the current owner continued to own the land. You would be required to replant after harvest (unless you have an exemption), and use the land exclusively or nearly exclusively for forestry activities. The land can be used for accommodation only to support forestry activities.
The fee for this consent is usually between $44,600 and $51,100 depending on the value of the land.
An investor will be eligible for a standing consent if they are able to satisfy the criteria, including that they must have a strong track record of compliance with the Overseas Investment Act, and with consent conditions. A standing consent is available only for the special forestry test. It is important for investors to have a pre-application meeting with us before applying for a standing consent.
The fee for a standing consent is an initial fee of $34,100, and $13,000 per transaction.
Transitional arrangements are in place that allow an overseas investor to withdraw an application they have already lodged, and submit a new application using the new special forestry test or the modified benefits test. The relevant new fee will apply for this new consent. Investors can submit applications under these new tests from 22 October 2018.
A consolidated version of the Overseas Investment Act 2005 will be available soon. Until then, the references for the Overseas Investment Amendment Act 2018 are provided.
The provisions covering forestry are detailed in Part 2 of the Act, and Schedules 3 and 4.
There is more detail in the application templates. Download the template for your situation and save it to your computer. Once it is completed, you can use the online submission link to apply. From inside the link you can upload your completed template and other documents.
We will endeavour to decide your consent applications within 50 working days.
This website provides general information only. The OIO and LINZ do not assume any responsibility for giving legal or other professional advice and disclaim any liability arising from the use of the information. If you require legal or other expert advice you should seek assistance from a professional adviser.