Following a consultation process earlier this year, Associate Finance Minister David Parker announced proposed changes to the Overseas Investment Act yesterday.
The Finance Minster will be given the power to decline an application which is not in the national interest. This will apply to proposed investments by overseas persons in certain industries including ports, airports, electricity and telecommunications, as well in respect of suppliers to defence and security agencies.
Another change is in respect of the sale of farmland. The Government will strengthen the current requirement for overseas investors in farmland to demonstrate a substantial point of difference from what a New Zealander would do, such as by contributing something new or creating additional value to the economy.
Further proposed changes aim to reduce the complexity and red tape of the Act and screening process, including setting specific timeframes to give investors greater certainty. A range of low risk transactions will be exempt from the requirement to obtain consent under the Act, such as certain transactions involving companies that are majority owned and controlled by New Zealanders.
A Bill to implement the changes is expected to be introduced in early 2020.
This update has been prepared by Jessica Weinberg, an Associate with TODD & WALKER Law. For more information on overseas investment contact Peter Sygrove at [email protected] or Graeme Todd at [email protected].