New Zealand has become increasingly attractive to overseas investors in recent years, with a wide range of business opportunities, coupled with a stable government and low regulatory hurdles in comparison to other countries. Overseas investments in “significant business assets” (generally with a value of $100m) or “sensitive land” in New Zealand requires approval from New Zealand’s Overseas Investment Office (OIO).
Overseas investments involving New Zealand land have become more difficult over the last 18 months. Residential land is now included in the overseas investment consent regime, and the criteria that must be satisfied to acquire rural land for farming and agribusiness investments have become much more restrictive. At the same time, the Government has introduced new streamlined tests to encourage land investments relating to forestry activities. These changes have resulted in complex legislation, with a number of different tests and criteria, depending on the nature of the land being acquired, and the purpose for which it is being acquired.
In addition, in June 2020 the Government introduced an emergency notification regime (ENR) for overseas investors. This is a temporary regime introduced in response to the COVID-19 emergency and requires overseas investors to notify the OIO of all share or business asset transactions over certain thresholds regardless of the nature of the assets and the dollar value of the transaction. The Government will then decide whether the transaction can proceed after evaluating any national interest concerns. The ENR will be reviewed by the Government every 90 days and will only remain in place while the effects of the COVID-19 emergency justify its continuance. The ENR was recently extended for a third time until 25 May 2021.
Our overseas investment team have considerable experience and skill acting on behalf of overseas investors looking to purchase land and business assets in New Zealand. Our expertise in this area is testament to our applied knowledge of the Overseas Investment Act, and our ability to understand the specific needs of our clients combined with the foresight required to plan submissions in a manner that mitigates issues arising. We have been involved in approximately 50 successful applications for OIO approvals within the last ten years, the majority of which involved rural land acquisitions. Our team also has a detailed knowledge of the recent legislative and policy changes, and has prepared successful OIO applications under the new tests, including for the acquisition of land for agricultural purposes, applications under the new streamlined forestry tests, and applications for property development exemption certificates.
Our history of successful applications with the OIO has given our team the understanding required to assist clients to navigate this increasing complex area, to prepare complete, comprehensive submissions in support of OIO applications, and manage those applications through the decision-making process. These factors are a major contributor to our continued increase in referred business within the overseas investment arena. Due to the nature of our in depth understanding of our client’s ventures during the OIO consent process, we are often able to assist with many other facets of their legal requirements, strengthening the overall structure of their businesses and investments.