In October 2024 Associate Finance Minister David Seymour announced changes to our overseas investment laws to get New Zealand "off the bench" as a competitive destination for international investors. We described the changes at that time as likely to be the most significant change of the past two decades in terms of how investments are screened, even though it was made clear that the scope of what we currently screen would be retained.
Today the Minister has announced new details of the government's proposals, which give a clearer direction of travel. The headline for would-be investors is that Cabinet has agreed to remove the barriers for high-value investments, such as significant business assets, existing forestry, and non-farmland property. While "remove barriers" does not mean "remove from screening altogether", most investors in those sorts of assets could expect decisions within 15 days – substantially shorter than the current statutory timeframes, and shorter than even the timeframes demanded by the Minister in his June 2024 Ministerial Directive letter.
Today's announcement also confirms the focus on assets generally accepted as genuinely sensitive (residential land, farmland and fishing quota), and the Government’s ability to intervene on the rare occasion that a transaction is not in the national interest will be strengthened.
Changes to both the legislation and the approach of the regulator over the past three years have reduced complexity and timeframes, but the regime remains arcane – a niche area that rarely fails to surprise experienced global investors in terms of the demands placed on would-be investors to meet the current tests. If the Government holds its nerve (relaxing foreign investment controls can be controversial) and makes the changes Cabinet has just approved, it might just deliver on its objective to make New Zealand competitive as an investment destination.
Legislation is being drafted now, and the plan is to have the new rules in place by the end of this year.
Talk to one of our experts for more information on New Zealand's foreign investment regime.
