Wednesday, 31st March, 2021
New Investor Test - Overseas Investment (Urgent Measures) Amendment Act 2020
The new overseas investor test will come into force on 22 March 2021. It is intended to simplify the process for overseas investors applying for consent from the Overseas Investment Office (OIO) to acquire sensitive New Zealand assets.
The current open-ended investor test often results in investors spending a considerable amount of time identifying and considering irrelevant matters, resulting in significant compliance costs.
The OIO will now assess overseas investors against 12 prescribed factors relating to character and capability, to determine whether overseas investors are unsuitable to own or control any sensitive New Zealand assets. The test is intended to focus on material risks only.
This is one of the last measures of the Overseas Investment (Urgent Measures) Amendment Act 2020 to be implemented, which seeks to balance the need to support high-quality overseas investment, whilst protecting New Zealand’s national interests.
If you have any questions about the new investor test and how this may impact your application, please get in touch.
Added extra: Temporary Emergency Notification Regime
The temporary emergency notification regime for screening overseas investment transactions will remain in place until at least 25 May 2021.
If you are an overseas investor acquiring more than 25% of an existing New Zealand business or its assets (or if you are increasing an existing interest beyond certain thresholds) you still need to notify the OIO and obtain clearance. Investors need to ensure any transactions include appropriate conditions relating to OIO clearance.