It’s go time for Overseas Investment Act reforms – what you need to know about today’s changes

Today (24 November 2021) marks the introduction of significant changes to the Overseas Investment Act 2005.  This is the final stage of reform which began in 2018.

The changes, which result from the Overseas Investment Amendment Act 2021, include:

1       Strengthening and modernising requirements for advertising farm land for sale

All farm land sales will be subject to new, strengthened advertising requirements.

Before a transaction to sell farm land can be entered into with an overseas person, the land must be offered for purchase by a New Zealander on the open market.

The methods of advertising have changed to include:

• Advertising must occur before any transaction is entered into with an overseas person.
• Two types of advertising are required –online and in a paper publication.
• The property must be advertised for no less than 30 working days.
• Advertisements must be published within a prescribed 12 month period

2       Updating the rules giving the Crown the right to acquire fresh or seawater areas

Investors are now required to offer fresh or seawater areas (previously ‘special land’) to the Crown if acquiring an interest in it.

The Crown will then have the right to acquire the fresh or seawater interest unless a decision is made not to.

3       Introduction of new assessment timeframes for considering and deciding overseas investment applications

The new timeframes include time spent seeking information from investors and third parties and vary according to the type of investment.

The timeframes are designed to provide more assurance around the length of time applications for consent will take.  However, there are instances when the timeframes can be paused or extended by the Overseas Investment Office.

4       Updating the Benefit to New Zealand Test

Finally, the benefit to New Zealand test, which assesses the likely benefit of a proposed overseas investment, is simplified to include just 7 rather than 21 specific factors.

Importantly, these changes include protecting sites of significance to Māori, a higher benefits threshold for farm land and a standardised benefit test for fisheries investments.

For any questions regarding the Overseas Investment Act reforms or your property or investment matters, please contact Sarah or Jono.