Overseas investments in New Zealand
Recent changes to the Overseas Investment Office (OIO) are good news and bad news to potential investors.
Jeremy Barton (Duncan Cotterill – Overseas Investment Lawyers) reports:
The OIO deals with applications from overseas people and overseas companies who wish to invest in sensitive New Zealand assets, such as some types of land. Applications made to the OIO are considered against factors that include the investment’s potential benefit to New Zealand and the good character of the applicant.
The changes aim to make the process faster and to provide more information to potential investors and applicants, but this comes with a cost.
The good news is that the OIO has upped its resources. One of the benefits for those wanting to invest is that the processing times for applications have decreased. The OIO aims to respond to applications for investments in sensitive land in around 50 to 70 days. These timeframes are subject to the quality of the application and if all necessary information has been provided. An increase in resources means these targets are more likely to be met, so applicants will know the result of their applications sooner.
Moreover, the OIO is now available for pre-application meetings. Now applicants and their solicitors can engage with the OIO earlier. The OIO encourages these meetings for first time investors or those who are making an investment with unique characteristics. Although the OIO will not review draft applications, the meetings are an opportunity to discuss the application and for the OIO to provide insight into specific issues that the application needs to address. This means that applicants have a stronger chance of getting their application right the first time, saving the expense of reapplying if the first application is rejected.
However, the impact of these changes is an increased price tag for applications. The fee structure is now more complex to refiect the different types of applications that the OIO considers. For sensitive land applications, the cost is around 69 per cent to 126 per cent more. For other types of applications, the increase is between 2 per cent to 156 per cent. Although this will put investors more out of pocket, the reviewed fee structure accounts for the time spent on different types of applications so is fairer for applicants. It also means the OIO is funded to monitor applications better and to respond to applicants sooner.
So far, it looks like the changes are good news for investors despite the fee increase. The extra resources available to potential investors and faster timeframes ought to make the process smoother. The fact that the OIO will update applicants on the progress of their applications and aims to process applications faster will provide more comfort to potential overseas investors and to applicants.
There are resources on the Land Information New Zealand website if you would like more information on the OIO process. It is also recommended that you seek legal advice if you are considering investing in New Zealand and to assist you through the process if you do decide to invest.
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