According to Land Information New Zealand, the exemption extends to both government and non-government investments in significant business assets
Under alternative monetary thresholds, Australian investments into government and non-government business assets in New Zealand are exempted from requiring prior approval from the Overseas Investment Office (OIO), says the New Zealand Law Society.
The announcement was made by Land Information New Zealand on 15 April. Overseas investors who wish to invest in business assets worth over $100m typically must submit applications to be reviewed by the OIO.
The alternative monetary thresholds for the period of 1 January 2020 to 31 December 2020 are $536m for Australian non-government investors and $112m for Australian government investors.
The statement also indicated that these monetary thresholds must be adjusted annually if calculations generate a sum greater than that of the previous year. The formulae to determine the thresholds were set out in the Overseas Investment Regulations 2005 legislation, and the GDP implicit price deflator index value is a factor in the calculations.
Land Information New Zealand released the notice in accordance with section 13 of the Interpretation Act 1999. This clause “allows a power to be exercised to correct an error or omission in a previous exercise of the power.”
The Overseas Investment Regulations 2005 broadly define an overseas investment in significant business assets as the following under specific conditions:
- “the acquisition by an overseas person, or an associate of an overseas person, of rights or interests in securities of a person.
- the establishment by an overseas person, or an associate of an overseas person, of a business in New Zealand (either alone or with any other person).
- the acquisition by an overseas person, or an associate of an overseas person, of property (including goodwill and other intangible assets) in New Zealand used in carrying on business in New Zealand (whether by one transaction or a series of related or linked transactions) if the total value of consideration provided exceeds $100m or an alternative monetary threshold.”
An overseas person who has been lawfully conducting business in New Zealand as of 15 January 1996 does not require consent, as this is the date in which the Overseas Investment Regulations 1995 was implemented.
The alternative monetary thresholds do not apply to Australian investors if an associate has “a beneficial entitlement to, or a beneficial interest in, any of the securities”; “the power to control (otherwise than indirectly through the investors) the composition of [the company in question’s] governing body to any extent” or “a right to exercise, or to control the exercise of, any voting power (other than voting power of Z) at a meeting of [the company in question].”
