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New Zealand Economic and Financial Overview 2015

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.

In order to invest in significant business assets, investors must pass an investor test that considers character, business acumen and level of financial commitment. Overseas investors wishing to purchase sensitive land must additionally 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. Investments in fishing quota must be shown to be in the national interest, as defined in the Act.

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: http://www.linz.govt.nz/overseas-investment.

Foreign Investment Inflows

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 $97.4 billion as at 31 March 2014. Australia and the United States are the largest contributors to total foreign direct investment in New Zealand, with investments worth $55.5 billion and $8.2 billion respectively. The United Kingdom is the next largest investor at $8.0 billion, while Singapore, Japan and the Netherlands follow closely behind at $4.0, $3.6 and $2.8 billion respectively.

By contrast, the stock of direct investment abroad by New Zealand was $23.2 billion as at 31 March 2014, with over half consisting of investments in Australia ($12.4 billion).

Table 16 - Foreign Investment Inflows (1) (2)
Year Ended 31 March
(dollar amounts in millions)
2010 2011 2012 2013 2014
Foreign Direct Investment -587 2,738 1,476 4,005 318
Foreign Portfolio Investment 12,724 10,578 3,918 12,448 2,139
  1. Financial account completed according to principles set out by the IMF in 5th edition of the Balance of Payments Manual.
  2. Prior years' data revised.

Source: Statistics New Zealand

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