Key regulatory barriers to consider before commencing business in New Zealand
Overseas Investment Office (OIO) consent may be required if target businesses possess significant business assets, where the cost of a business acquisition, or the value of the applicable New Zealand assets, exceeds NZD100 million. It is also required for an interest in sensitive land, or a fishing quota.
All applicants for consent are required to meet the investor criteria of business experience and acumen, financial commitment and good character. They must not be ineligible individuals under the Immigration Act.
Transactions occurring outside New Zealand may still require OIO consent if the target business has interests in land or other assets in New Zealand. OIO implications for offshore transactions should be assessed early in the transaction process to ensure that timeframes do not cause unnecessary delays.
The consent application process is administered by the OIO and governed by the Overseas Investment Act 2005 (the Act) and accompanying regulations. The overall consent decision rests with the relevant Ministers. Potential investors should engage legal advisors early in the investment process to assess whether consent is needed and to ensure that there are no unnecessary delays.
Consent is usually granted subject to various conditions with which the applicant must comply. Often the conditions will reflect the nature of the benefits claimed to support the transaction in the consent application.
See other blogs with tips on doing business between New Zealand and Asia:
- Cultural points you need to be aware
- Resolving issues with transparency or corruption
- Why should investors and entrepreneurs choose New Zealand as a gateway to Asia?
- What help exists for overseas investors in terms of expert partners, trade networks or government incentives?
Mark Copeland Lawyers, in Rotorua is the New Zealand commercial, corporate and real estate member Firm of IR Global, a global network of over 300 professional services firms in over 150 countries who are able to provide expert local advice on international business transactions.
Mark was recently invited to contribute his perspective on doing business in New Zealand, as a part of an IR Global feature “Gateway to Asia Pacific: A Guide to doing business in Asia.” Read what Mark and the 8 other IR Global contributors had to say here: Gateway to Asia Pacific: A Guide to doing business in Asia.”