Toward a more effective overseas investment regime
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