Its election year in New Zealand and foreign investment looks to become a key emotional issue for both major political parties. Federated Farmers has renewed its call for a register of foreign-owned farmland, after questioning the proposed sale of a central North Island farm to a Chinese company.The Shanghai Pengxin group has signed a purchase agreement for the 13,800ha Lochinver sheep and cattle station near Taupo. It plans to convert part of the property to dairy farming. The group already owns 29 New Zealand farms, including 16 farms formerly owned by the Crafar family. The sale still has to be approved by the Overseas Investment Office (OIO) and Chinese regulators.
Read more on the Shanghai Pengxin group story here.
Foreign investment does not rest easily with all New Zealanders and recent public and political outcries over foreign investment in our farms and manufacturing plants attest to this. Many Kiwis want the overseas investment rules tightened, and the Prime Minister was quoted saying“the risk that New Zealanders become tenants in their own land” (NZPA 9 August 2010). Although in more recent years John Keys government has been an advocate for foreign investment and ownership in New Zealand, the election year may be harder than most to get large deals confirmed by the Overseas Investment Office.
However if NZ does look to legislating ways of restricting overseas investors’ access to the NZ economy, it would increase our country risk premium, causing borrowing costs to rise for households, firms and the government. Queen City Law is an award winning law firm that specialises in Immigration and Property Law. We know immigration and property fundamentals in New Zealand. We are very good at what we do and have achieved exceptionally high approval, rates –as a one stop legal service provider shop our business model is to then represent these ultra high net worth individuals with all of their NZ based legal instructions and it works very well.
The Overseas Investment Act
A large number of investments do not need approvals beyond the normal legislative business framework for New Zealand-based companies. The Overseas Investment Act 2005 regulates the acquisitions by overseas entities of 25 percent or more ownership or control of interests of sensitive New Zealand land and significant business assets.
- sensitive land (eg farm land, historical landmarks, regional parks)
- significant business assets (eg New Zealand securities or assets, or the establishment of a business, worth more than $100 million)
- fishing quota (an interest in fishing quota or securities in a person that owns an interest in fishing quota).
For more information about acquiring business assets and fishing quota, please refer to Land Information New Zealand. For information about the Government’s review of the Overseas Investment Act, visit The New Zealand Treasury.
Please feel free to contact the QCL team for further assistance.
More helpful links for Foriegn Investment guidelines can be found below:
- The Inland Revenue Department website provides information about individual and business taxation in New Zealand, including all the necessary procedures and forms.
- Immigration New Zealand provides facilitation services for businesses sourcing or relocating international staff.
- The Overseas Investment Office, part of Land Information New Zealand, administers the New Zealand Government’s foreign investment policies. The core work of the Office is to assess applications for consent from foreigners who intend on making substantial investments in New Zealand.
- The Ministry of Business, Innovation and Employment focuses on sustainable economic development. Its website provides information about all aspects of New Zealand’s economic development policies including the legal framework, the regulation of specific markets, policy-making and implementation.
- The New Zealand Law Society can help you locate a suitable law firm, should you need legal advice.