Key Reforms to the Overseas Investment Act

Associate Finance Minister David Seymour has revealed the government’s initiative to simplify the process for New Zealand businesses to attract international investment through reforms to the Overseas Investment Act.

“New Zealand is one of the hardest countries in the developed world for overseas people to invest in businesses, and our productivity growth is woeful. Those two facts are closely linked.

“We are introducing reforms to improve New Zealand’s overseas investment laws. The package will speed up decisions and provide more confidence to investors while protecting our national interests,” he said. 

According to Seymour, “Overseas investment can support economic growth because when workers work with better tools and technologies, they are more productive and get paid more.”

The reform package consists of

• better acknowledging the benefits investment can provide to New Zealand’s economy,
• for all investments aside from residential land, farmland, and fishing quotas, making decisions in just 15 days, unless the application could be contrary to New Zealand’s national interest,
• strengthening the government’s ability to intervene on the rare occasion that a transaction is not in the national interest,
• giving LINZ more powers to grant consent without involving ministers.

Cabinet has decided to eliminate barriers for high-value investments, including major business assets, existing forestry, and non-farmland, which collectively represent approximately $14 billion in gross annual investment, according to Seymour.

Current protections for residential land, farmland, and fishing quotas would be maintained.

“Nearly every other developed country has less obstructive laws than New Zealand. They benefit from the flow of money and the ideas that come with overseas investment. If we are going to raise wages, we can’t afford to ignore the simple fact that our competitors gain money and know-how from outside their borders.”

Meanwhile, Labour’s finance spokesperson, Barbara Edmonds, stated that the reforms represent a major change from the existing regulations and are “not in the best interests of New Zealanders.”

“Under their plan, foreign investors will find it even easier to snap up key assets without clear protections for Kiwi jobs or incomes. Investing in New Zealand is a privilege, not an open invitation for profit-chasing investors to exploit our resources and syphon off the returns overseas. Yet, this government is throwing the doors wide open, without ensuring our assets serve the interests of Kiwi workers, businesses, and communities,” Edmonds said.

“The government claims they have a ‘balanced’ approach, but that raises the question: balanced for whom? I don’t see any clear protections for New Zealand’s environment, public utilities, or any effort to consider Māori or the broader community.”

For Edmonds, “Rushed reforms like these put our economic future at risk” and that the government is simplifying the process for foreign companies to acquire key assets, enabling them to transfer profits overseas.

“That doesn’t strengthen our economy; it weakens it. This is just another example of this government taking New Zealand backwards,” she said.