For your information

Overseas investment fees are changing. A new fee regime will come into force on Monday 13 September 2021. Find out more here.

This page summarises recent changes to the overseas investment rules, including those not yet in force.

Overview

On Monday, 5 July 2021 several changes in the Overseas Investment Amendment Act 2021 came into force. Other changes come into force on 24 November 2021 and later. The Overseas Investment Amendment Act 2021 amends the Overseas Investment Act 2005.

On 7 June 2021, the Emergency Notification Regime (ENR) was replaced by a more targeted National Security and Public Order notification regime (NSPO).

The changes will:

  • remove the need for consent for lower risk transactions
  • better manage higher risk transactions and assets of significance to New Zealanders
  • simplify application requirements for investors.

The tables below summarise the changes, and the website has been updated in more detail to reflect the changes that are currently in force. An information sheet has also been prepared setting out an overview of the law changes since 2020.

Reform of the Overseas Investment Act overview (PDF 339KB)

13 September 2021 - Changes to the Overseas Investment Office fees

A new fees framework for applications to the Overseas Investment Office is now in place. It applies to all applications received from Monday 13 September 2021.

The changes have been made to reflect the complexity of an application and the amount of work required to process it.  More complex applications now have three separate payments. 

  1. Lodgement fee - payable when an application is submitted.
  2. Assessment fee - payable once an application is accepted.
  3. Monitoring compliance fee - payable before consent can be granted.

Fees that remain as a single payment, although the fee itself may have changed, are:

  • Sensitive land: One home to live in – individual
  • Sensitive Land: One home to live in – entity
  • Sensitive land: Apartment off the plans
  • Investor Test: Standalone
  • Investor Test: Reassessment
  • Variations
  • Exemptions.

All other fees require the three payments.

The updated fees can be found in the OIO fees and penalties schedule, and the OIO fees framework provides a detailed description of the new framework.

OIO fees and penalties

For more information on the consultation process:

Consultation on third party funding for the Overseas Investment Office (OIO)

5 July 2021 - Changes to the who and what requires consent, and other technical changes

The date an application is received by Overseas Investment Office determines whether the new rules apply to that application, regardless of when the transaction is entered into:

  • if an application is received before 5 July 2021 then the existing rules apply (namely, the rules not changed by the Overseas Investment Amendment Act 2021)
  • if an application is received on or after 5 July 2021 the new rules apply.

The farm land advertising rules that apply will depend on the date the transaction is entered into, rather than the date of the application. Transactions entered into on or after the new rules come into force later this year will be subject to the new rules. The new rules are likely to come into force in November or December 2021. Until that time the existing farm land advertising rules apply.

If you are uncertain which rules apply:

Removing lower risk transactions

Ways the rules will apply

Increases in interests in sensitive land that do not cross ownership or control limits will no longer require consent.

Transactions that result in an ‘overseas person’ increasing their ownership or control interest will only require consent if they cross an ownership or control threshold:

  • if your existing interest is less than 25%, your threshold is 25% or more
  • if your existing interest is more than 25% but less than 50%, your threshold is 50% or more
  • if your existing interest is more than 50% but less than 75%, your threshold is 75% or more
  • if your existing interest is more than 75% but less than 100%, your threshold is 100%.

Transactions where the investor is no longer defined as an ‘overseas person’.

The new rules remove certain widely-held bodies corporate that are both NZ-incorporated and NZ-listed from the definition of ‘overseas person’.

Managed investment schemes, too, may not be ‘overseas persons’ under the Act if they are:

  • New Zealand listed;
  • are 50% or more invested on behalf of New Zealanders; and
  • where at least 25% of its products invested on behalf of overseas persons are widely held

Lease transactions in sensitive land that are less than 10 years will no longer need consent.

Temporary ‘interests in sensitive land’ now only include interests for a term of 10 years or more (except for land that is solely residential land, where the term remains at 3 years).

Scope of national interest assessment is refined.

The threshold of non-New Zealand government ownership of investors triggering a national interest assessment will move from more than 10% to more than 25%.

Certain foreign government investors (such as pension funds) may apply for an exemption from the definition of ‘non-New Zealand government investor’.

New exemptions available for lower risk transactions.

Investors have available to them new exemptions, or changes to existing exemptions, for:

  • corporate dealing
  • shareholder creep by consent holder
  • trusts
  • insurance contracts (ancillary to permitted security arrangements)
  • transfer of certain debt obligations
  • underwriting
  • covenants
  • redeemable preference shares.

National interest test exemption for low-risk overseas government investors.

Investors who are, or include, non-New Zealand Government enterprises will have an exemption available from one component of the automatic application of the national interest test where they have limited control and influence over the investment.

 

Managing higher risk transactions and assets of significance

Ways the rules will apply

Major banks become ‘strategically important businesses’

Coming into force on 29 July 2021, a change to the regulations means investors investing in major banks are likely to be subject to the national interest test, if other criteria are met and any relevant exemptions do not apply.

 

Simplifying application requirements for investors

Ways the rules will apply

Repeat investors who have passed the new investor test will not need to satisfy the investor test each time they apply for consent (provided there are no substantial changes since the last time they obtained consent).

Investors may apply at any time to complete the new investor test.  

Repeat Investors will have a streamlined investor test assessment (provided there are no substantial changes to the individuals with control or entities involved, that would make the investor unsuitable to own sensitive New Zealand assets).

Investors will also be able to apply for a standalone assessment of the investor test in preparation for future transactions.

 

New requirement for applicants

Ways the rules will apply

Tax information required for Inland Revenue monitoring and compliance

Applicants will be required to provide tax information when applying for consent to acquire significant business assets

Fees for new pathways

New fees have been set for the new application and exemption pathways that come into effect on 5 July 2021.

7 June 2021 - National security and public order notification regime replaces temporary emergency notification regime

Now that the economic risks of COVID-19 have diminished, a new national security and public order (NSPO) notification regime replaces the temporary emergency notification regime (ENR). The NSPO requirement focuses on a narrower range of overseas investment transactions that pose significant national security and public order risks.

This diagram provides an overview of the NSPO regime: National Security and Public Order overview (PDF 261KB)

The ENR and NSPO rules that apply depend on the date a transaction is entered into regardless of when the transaction is notified:

  • if your transaction is entered into before 7 June 2021, the temporary emergency notification regime applies
  • if your transaction is entered into on or after 7 June 2021, the NSPO notification regime applies.

Contact the Overseas Investment Office to confirm which rules apply if you are uncertain
  

Transition from ENR to NSPO

Ways the rules will apply

National Security and Public order (NSPO) notification regime

The NSPO regime applies to transactions entered into on or after 7 June 2021 in ‘strategically important businesses’ that: would not otherwise require consent under the Act but potentially pose a risk to national security and public order.

These include investment in ‘critical direct suppliers’:

Critical direct suppliers

On 5 July 2021, what is captured as overseas investment in strategically important business assets has changed because of an amendment in the Overseas Investment Amendment Act 2021.

On 29 July 2021, a change to the regulations will see major banks become strategically important businesses.

The Ministers have issued a Ministerial Directive and Delegation Letter about how the Government’s policy approach to NSPO.

Supplementary Ministerial Directive Letter (May 2021)

Information to find out if you need to notify us of your transaction and how to do so

Treasury have also updated their Foreign Investment Policy and National Interest Guidance to cover NSPO

Temporary emergency Notification Regime discontinued

Transactions entered into before 7 June 2021 that required a notification under the temporary emergency notification regime must still be notified

Late 2021 - Changes to how applications are assessed, and other technical changes coming into force on 24 November 2021 (or by 24 May 2022)

Simplifying application requirements for investors

Ways the rules will apply

The benefit to New Zealand test is simplified and strengthened*

21 specific factors across the Act and the Regulations will be reduced to 7 broad factors.

The current ‘with and without’ counterfactual is replaced with a comparison of ‘before and after’ the investment.*

The current process of determining what would occur with the assets without the investment as compared to the investment, will now be a comparison of the current state of the assets against what is likely to occur with the assets.

Proportionality in assessment is enshrined in the Act.*

Formerly only in the Minister’s directive letter to the OIO, the requirement to take a proportionate approach to whether the benefit to New Zealand test is met is now set out in the Act.

The introduction of statutory timeframes

Each consent application pathway will have prescribed timeframes for decision making.

* Changes due to come into force on a date to be determined but no later than 24 May 2022

Managing higher risk transactions and assets of significance

Ways the rules will apply

The assessment of consent applications for farm land

Higher benefit thresholds will be required to be met for consent applications involving farm land.

Rules for farm land advertising tightened

Local advertising must occur before an overseas transaction is entered into, and some of the requirements for this advertising will be amended.

Changes to consent applications involving fresh water and marine areas (formerly ‘special land’)

Overseas investors must offer any fresh and marina areas to the Crown if acquiring a freehold interest.

Greater recognition of sites of cultural importance to Māori

The scope of protection will be expanded to further sites of significance for iwi, hapu and whanau

Other recent changes

March 2021 – New investor test was introduced

The new investor test sets out the types of behaviour and history we consider show that the overseas investor is a potential risk to New Zealand. The test is made up of 12 factors covering character and capability.

Investor test

June 2020 - National interest assessment was introduced

A new national interest assessment requirement was introduced on 16 June 2020. This assessment only applies to some transactions, and is intended to be used rarely.  It applies to transactions involving: strategically important businesses, an overseas government investor, or an area of specific national interest.  The assessment will make sure that overseas investments in sensitive and high-risk assets are not contrary to New Zealand’s national interests.

National interest assessment

Legislation and guidance

For information about our legislative environment, including Ministerial Directive letters and delegations, see Legislation, Ministers and delegated powers.

Also see:

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Last Updated: 13 September 2021