Find out how we assess the good character of ‘relevant overseas persons’ and ‘individuals with control’.

Consent cannot be granted unless the people who will control the investment are of good character (see s16(1)(c) / 18(1)(c)). The people who must satisfy the good character requirements are the individuals that make up the relevant overseas person (ROP) and the individuals with control of the relevant overseas person (IWC) (together, the ROP / IWC Individuals).

Assessing good character

When undertaking the good character assessment, the decision-maker will look to satisfy themselves the character of each ROP / IWC Individual is sufficient that they should be granted the privilege of owning or controlling sensitive New Zealand assets.

We will consider the character information you provide but will also undertake our own enquiries. How much we rely on your information, and how far, and how deep, we go with our enquiries will be determined by the risk profile of your application. For example, our approach to assessing the character of a new investor, or someone who has breached the Overseas Investment Act 2005, is likely to be different than for a repeat investor with a track record of good conduct, compliance and delivery of benefits in New Zealand.

The following matters must be taken into account when assessing a person’s character (see s19(1) of the Act):

  • Offences or contraventions of the law (whether convicted or not);
  • Offences or contraventions of the law by any person in which an ROP / IWC Individual had a 25% or more ownership or control interest (whether convicted or not);
  • Any other matter that reflects adversely on the person's fitness to have the particular overseas investment.

However, the assessment is not limited to these mandatory considerations – other relevant matters will also be considered (including mitigating factors). All relevant matters will be weighed up before a decision is made as to whether a person is of good character.

Required information

You must identify and disclose all information potentially relevant to the character of the ROP / IWC Individuals in your application. Examples include offences or contraventions of the law (whether convicted or not), allegations of the same, investigations or prosecutions or other enforcement action by regulatory or professional bodies. It is your responsibility to seek out this information and provide it to us.

You must also make submissions on whether the matters you disclosed are relevant and, if so, the impact (if any) they have on the character of the ROP / IWC Individual concerned. Your submissions must contain your reasoning and avoid vague statements.

You must also provide statutory declaration(s) attesting to the good character of the ROP / IWC Individuals. However, you do not need to include this in your application as we will request it later in the process, after we have confirmed who the ROP / IWC individuals are.

Our Application templates contain further guidance on the information you must provide us with.

We will undertake our own background checks to help ensure that all potentially relevant information has been disclosed and addressed. If your information is incomplete, unreliable or otherwise inadequate it is likely that we will return your application to you during our Quality Assurance Review. This may also cast doubt on the quality of your application and prompt further enquiries and more intensive background checks.

It is an offence to make a false or misleading statement or material omission in any information you provide to us. Knowingly or recklessly providing false or misleading information to us will make it difficult for the decision-maker to conclude that you are of good character. It may also result in enforcement action being taken against you.

Determining relevance

The good character assessment involves the consideration of information relevant to the character of an ROP / IWC Individual. The scope of our assessment is therefore determined by our selection of the ROP / IWC Individuals.

While we will have regard to the potentially relevant information you have disclosed and your submissions on relevance, we will decide what is relevant to our assessment.

Examples of matters that will be, or are likely to be, considered relevant:

  • Offences and contraventions of the law;
  • Credible allegations of offending or contraventions of the law (we will consider the source and the foundation / evidence for the allegation, and whether the allegation is sufficiently linked to an ROP / IWC, before deciding whether it is relevant or not);
  • Investigations, prosecutions or other enforcement action by regulatory or professional bodies; and
  • Track record in New Zealand.

Examples of matters unlikely to be considered relevant:

  • Adverse information that does not relate to an ROP / IWC Individual (for example, offences or contraventions by an ROP company which pre-date an IWC’s involvement with that company);
  • Where we are satisfied that allegations about an ROP / IWC Individual have been fully investigated by the relevant authority and the ROP / IWC Individual has been cleared of any wrongdoing; and
  • Adverse information that does not impact on the character of an ROP / IWC individual.

Assessment of relevant matters

All relevant matters will be weighed up before a decision is made as to whether a person is of good character. How much weight is given to a particular matter depends on a variety of factors including how closely linked the matter is with the investment being made. For example, the mistreatment of animals will be more relevant if the application involves a farm.

We will have regard to your submissions on weighting. However, the decision-maker will decide what weighting should be given to relevant matters.

The onus is on you to satisfy us that all the ROP / IWC Individuals are of good character. Doubts about the character of an individual may mean that the decision-maker cannot be satisfied that the test has been met and your application must be declined.

Offences and contraventions

Factors which are relevant to the weighting of offences and contraventions include:

  • The nature of the offence or contravention including:
    • The seriousness of the offending;
    • Whether the offence or contravention of the law was deliberate;
  • The time since the offence or contravention.
  • Absence of any re-offending.

Allegations

The weighting we give allegations will depend on factors including the nature and sufficiency of the information supporting the allegation. Relevant questions include:

  • Has the matter been considered by a regulatory or professional body? If so, is that body reputable? What was the outcome: Did it decline to investigate? Did it investigate and take no action or only issue a warning? Is it still investigating?
  • Has the matter been considered by the courts? If so what was the outcome: Was there any finding of wrongdoing? What did the judgment say? Is an ROP / IWC Individual specifically criticised? Are proceedings ongoing?

An open regulatory investigation into allegations about an ROP / IWC Individual may make it difficult for the decision-maker to be satisfied they are of good character.

Track record

The weighting we give to a track record of compliance and good conduct in New Zealand will depend on factors such as the length and strength of the track record.

Disclaimer

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.

Last Updated: 17 February 2017