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New Zealand Economic and Financial Overview 2010

Foreign Investment Policy

New Zealand welcomes the positive contribution of foreign investment to the economic and social well-being of New Zealanders. New Zealand's regulations governing foreign investment are liberal by international standards as New Zealand maintains targeted foreign investment restrictions in only a few areas of critical interest.

Overseas investments in New Zealand assets are screened only if they are defined as sensitive within the Overseas Investment Act 2005 (the Act). Three broad classes of asset are currently defined as sensitive within the Act: acquisition of a 25% or greater ownership interest in business assets valued at over $100 million, all fishing quota investments, and investment in sensitive land as defined in Schedule 1 of the Act. Examples of sensitive land include rural land over five hectares or land bordering or containing foreshore, seabed, river, or the bed of a lake. Most urban land is not screened unless defined as sensitive for other reasons. A full list of sensitive assets is defined in the Act.

Investors must pass an investor test that considers character, business acumen and level of financial commitment. Overseas investors wishing to purchase sensitive land must either intend to reside permanently in New Zealand or demonstrate that the investment will benefit New Zealand. The criteria for assessing this benefit are set out in the Act and the Overseas Investment Regulations 2005.

There are no restrictions on the movement of funds into or out of New Zealand, or on repatriation of profits. No additional performance measures are imposed on foreign-owned enterprises.

The Overseas Investment Act 2005 is administered by the Overseas Investment Office - a dedicated unit located within Land Information New Zealand. More information on New Zealand's foreign investment screening regime is available on the Overseas Investment Office's website:

Foreign Investment Inflows(1)(2)
  (dollar amounts in millions)
Year Ended 31 March
  2005 2006 2007 2008 2009
Foreign Direct Investment 3,878 2,459 8,843 4,037 6,149
Foreign Portfolio Investment 4,264 2,905 4,622 14,443 (14,673)

(1) Financial account completed according to principles set out by IMF in 5th edition of the Balance of Payments Manual.

(2) Prior years’ data revised.

Foreign investment flows vary from year to year as they reflect changes in a small number of relatively large individual investments.

The stock of foreign direct investment in New Zealand stood at $92.8 billion as of 31 March 2009. Australia and the United States are the largest contributors to total foreign direct investment in New Zealand, with investments worth $46.1 billion and $11.5 billion respectively. The Netherlands is the next largest investor at $4.6 billion, while the United Kingdom and Japan follow closely behind at $3.2 billion each.

In contrast, the stock of direct investment abroad by New Zealand was $23.9 billion as at June 2009.

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