Associate Minister of Finance Hon David Parker today announced the introduction of legislation to update New Zealand’s overseas investment screening rules to address new challenges created by the COVID-19 pandemic.
The existing Overseas Investment framework in New Zealand does not ordinarily allow screening of business investments of less than $100 million (or higher where a free trade agreement applies). In response to the impact of COVID-19, amendments to the Overseas Investment Act 2005 put in place a temporary requirement for foreign investors to notify an intention to take a controlling investment in any New Zealand business, if that results in more than a 25% ownership interest, or increases an existing interest to or beyond 50, 75 or 100%. This allows the Government to ensure they are not contrary to New Zealand’s national interest.
A further change includes making some low risk, economically valuable investments able to go ahead without an application for consent. These changes will help New Zealand businesses access low risk finance necessary to survive the downturn, thrive and contribute to the recovery.
The measures are being introduced to Parliament in a Bill, to be passed quickly, which includes some of the measures to protect New Zealand’s interests announced in November 2019 as part of the Phase Two Reform of the Overseas Investment Act.
The Overseas Investment Act 2005 is New Zealand’s primary tool for managing foreign investment in New Zealand’s sensitive assets. The Act sets out screening requirements for investments in sensitive land, significant business assets and fishing quota.