Refining the 'national interest' test

The 'national interest' test applies to transactions where investment is by a foreign government or the investment is in a “strategically important business”. The previous investment threshold of 10% for the test to apply has now been increased to 25%. The new changes also clarify that the 25% ownership threshold applies to a single foreign government investor and exemptions may apply to the test, including for passive investments such as pension funds.

Narrower definition of "overseas person"

Certain NZ listed companies are now exempt from the definition of ‘overseas person’ where they meet specified ownership and control thresholds. This includes managed investment schemes where the scheme is NZ listed, is 50% or more invested on behalf of New Zealanders and where at least 25% of the invested products are widely held.

Changes to "sensitive" land

Leases for non-residential sensitive land now only need consent if their term is for 10 years or more. The consent threshold for residential leases remains the same, at three years or more. The requirement for consent has also been removed for certain categories of land that adjoin sensitive land.

Simplification of the investor test application 

Investors who have already satisfied the investor test now do not need to pass the test again for repeat investments, provided that their circumstances have not substantially changed. Instead, they need to complete a simplified assessment.

fURTHER CHANGES 

Further changes to the assessment of applications and other technical changes are expected to come into force in the next 6 to 12 months. These include: 

• Benefit to New Zealand test: simplified by being reduced to 7 factors instead of 21 factors.
• Sale of farm land: higher thresholds for consent, and a new requirement for local advertising to be completed before an overseas transaction is entered into.