In a bold move to reinvigorate New Zealand’s economy and position the nation as a global investment hub, Prime Minister Christopher Luxon announced the launch of Invest New Zealand during his State of the Nation address in Auckland on January 23, 2025. The newly established foreign investment agency is central to the government’s broader strategy to turbocharge economic growth, increase foreign direct investment (FDI), and foster innovation in critical sectors.
“We’ve experienced the biggest recession since the early 1990s,” said Luxon. “Growth is the solution—we must embrace it.” His government has already implemented significant reforms, but the Prime Minister made it clear that 2025 would be a turning point, with Invest New Zealand leading the charge toward creating a more dynamic and competitive economy.
A New Player in Economic Development
Initially operating under New Zealand Trade and Enterprise (NZTE), Invest New Zealand will act as a centralised “one-stop-shop” for foreign investors. The agency will focus on streamlining investment processes, offering tailored support to foreign businesses, and unlocking opportunities across a range of high-potential sectors. Over time, the government plans to transition Invest New Zealand into an Autonomous Crown Entity to grant it greater operational independence.
Modelled on the successful frameworks of Ireland’s Industrial Development Agency (IDA) and Singapore’s Economic Development Board (EDB), the new agency aims to replicate their achievements in attracting substantial foreign capital and fostering innovation. Minister for Trade and Investment Todd McClay, who will oversee the agency, expressed optimism about its potential impact, stating it could “unlock tens of billions of dollars in global investment opportunities.”
Strategic Objectives
Invest New Zealand has outlined several key objectives to drive its mission. Chief among them is attracting capital investment to high-impact sectors such as banking, fintech, infrastructure, manufacturing, and research and development (R&D).
The agency will also focus on fostering innovation by targeting industries with significant growth potential. “Backing our science and innovation sector will drive productivity and make us all wealthier,” Luxon stated, emphasising the importance of commercialising scientific breakthroughs.
Another priority is simplifying the investment process. Recent reforms to New Zealand’s overseas investment regime have already reduced compliance requirements and shortened consent timeframes for foreign investors, with many applications now processed within four weeks. Invest New Zealand will build on this progress, consolidating investment frameworks and creating a more accessible environment for international businesses.
Finally, the agency will prioritise attracting skilled professionals to enhance domestic expertise and foster global connections. This move aligns with the government’s broader vision of creating a high-skilled workforce capable of competing on the world stage.
Focus Sectors for Growth
To maximise its impact, Invest New Zealand will direct its efforts toward four primary sectors:
1. Banking and Fintech
The government aims to position New Zealand as a hub for financial technology, leveraging its reputation for stability and innovation. With global demand for fintech solutions soaring, this sector offers significant opportunities for growth and job creation.
2. Infrastructure Development
Investments in transport and energy infrastructure are a top priority as the country seeks to meet future demand and address existing bottlenecks. Fast-tracking major projects, such as port expansions and renewable energy initiatives, is expected to stimulate economic activity and improve connectivity.
3. Manufacturing and Innovation
By supporting advanced manufacturing and cutting-edge technologies, New Zealand hopes to diversify its industrial base and enhance productivity. The government is particularly keen on attracting multinational companies to establish R&D facilities, driving technological advancements and creating high-value jobs.
4. Multinational R&D Investment
Invest New Zealand will actively court international firms to invest in R&D, offering incentives to those willing to establish a presence in the country. This aligns with broader reforms in the science and innovation sector, which include restructuring Crown Research Institutes and creating new public research organisations focused on advanced technology.
Science and Innovation Reforms
Invest New Zealand’s launch coincides with a major overhaul of New Zealand’s science, innovation, and technology system—the most significant reset in over 30 years. Under the new framework, seven Crown Research Institutes will be consolidated into three organisations specialising in bioeconomy, earth sciences, and health and forensic science services. A fourth entity will focus on advanced technologies such as artificial intelligence, synthetic biology, and quantum computing.
The government will also establish a Prime Minister’s Science, Innovation, and Technology Advisory Council to set strategic priorities for research and innovation. In addition, a national policy on intellectual property management will ensure that scientists and researchers benefit more directly from the commercialisation of their innovations.
Luxon emphasised the need for these changes, stating, “Right now, scientists see too few of the proceeds of their own research. Too often, any resulting intellectual property is swallowed up by universities and effectively shelved. We want our science system to make us all wealthier.”
Learning from Global Success
The design of Invest New Zealand draws heavily from international models. Luxon specifically highlighted his visit to Ireland while in opposition, where he studied the IDA’s approach to attracting foreign investment and driving export growth.
Ireland’s success in attracting FDI—equivalent to 250% of its GDP—has been a key inspiration for New Zealand, where FDI currently accounts for just 38% of GDP. Similarly, Singapore’s Economic Development Board has demonstrated how a focused strategy can transform a small economy into a global powerhouse.
Luxon is determined to bring this level of ambition to New Zealand, with a clear message to investors: “We’re open for business.”
Complementary Reforms
Invest New Zealand will operate alongside other government initiatives aimed at stimulating growth. These include ongoing reforms to the Resource Management Act (RMA), which Luxon described as “fundamentally broken.” New legislation is expected to streamline consenting processes, enabling faster approvals for projects in sectors such as energy, transport, and aquaculture.
The government has also pledged to address barriers to competition in key industries such as banking, retail, and construction. “Too often, we see reports of Kiwis getting a raw deal because of a lack of competition,” Luxon noted, promising action to ensure a fairer marketplace.
Challenges and Criticism
While the launch of Invest New Zealand has been widely welcomed, some critics have raised concerns about the potential risks of increased foreign ownership. Labour Party leader Chris Hipkins questioned whether the initiative would prioritise strategic investments over the sale of critical national infrastructure.
“There’s a big difference between using foreign direct investment to stimulate new startup industries and hocking off our national assets,” Hipkins argued.
Environmental advocates have also expressed reservations about the government’s push for mining as a driver of economic growth, particularly in light of New Zealand’s commitments to sustainability and carbon neutrality.
Optimism for the Future
Despite these concerns, the government remains confident that Invest New Zealand will play a transformative role in shaping the country’s economic future. Luxon concluded his address with a message of hope and ambition:
“I want our kids to grow up in a country where it is totally normal for them to work in companies that put rockets into space, or cutting-edge health science firms. We can take on the world—and we can win.”