10 November 2004 Media Statement
Toward a more effective overseas investment regime
Legislation to subject overseas people wanting to buy sites of special heritage or environmental value in New Zealand to
a tougher screening and monitoring regime was tabled in the House today by Finance Minister Michael Cullen.
“The Overseas Investment Bill is designed to recognise that it is a privilege for an overseas person to own sensitive
New Zealand assets while also encouraging foreign investment which can make a positive contribution to the New Zealand
economy,” Dr Cullen said.
“I am confident that it achieves that balance and will win broad public support.”
The key changes are:
- Overseas applicants wanting to buy land but not intending to reside in New Zealand will have to include in the asset
management plan attached to their application how they will manage any historic, heritage, conservation or public access
factors relevant to the property as well as any economic development planned.
- Plans submitted by an overseas investor in support of his/her purchase will be made conditions of consent.
- To keep costs to the taxpayer down, the onus of compliance will be on the overseas investor. Investors will be
required to report regularly on how they are complying with the terms of their consent and outline any reasons for
non-compliance. Monitoring will continue until all obligations have been met.
- Maximum fines will be increased from $30,000 for individuals and $100,000 for companies to $300,000 for both.
- The existing two year time limit on the power of the courts to order the disposal of a property will be removed and
the test strengthened from contravention of to failure to comply with the Overseas Investment Act.
- The courts will be able to order that a mortgage be registered against any land purchase under the Act for the purpose
of securing the payment of monies owed under the conditions of consent or any fines and penalties.
- The Crown will have a new right of first refusal over foreshore and seabed land where this would otherwise be sold
into foreign ownership.
- The threshold for screening non-land business assets where the proposed acquisition entails a 25 per cent or more
shareholding will be raised from $50 million to $100 million. It was last adjusted in 1999 when it was increased from
$10 million to $50 million. [The last time a business application not involving land was turned down was by Sir Robert
Muldoon in 1984.]
- The onus for obtaining consent when an overseas person wants to buy a 25 per cent or more stake in a fish quota owning
company will be transferred from the company to the overseas investor.
- Purchases involving land with an unimproved value of more than $10 million will no longer require consent where the
land is not screened for other reasons. [As the $10 million applies to land value alone and as any rural land sales over
5 hectares will continue to require consent, this provision is expected to affect only purchases within the main centre
Central Business Districts.]
- Land adjoining some non-sensitive reserves, for example drainage and hospital reserves, will be removed from the
purview of the Act.
- The Overseas Investment Commission will be disestablished and its regulatory functions performed by a dedicated unit
within Land Information New Zealand. All OIC personnel will be offered the opportunity to transfer to the new unit.
Special properties include the foreshore and seabed and all sites over 0.4 hectares which are subject to a heritage
order; registered or proposed for registration under the Historic Places Act or classified as an historic, scenic,
scientific or nature reserve and administered by the Department of Conservation under the Reserves Act.
ENDS