Search

In general, New Zealand has an open foreign investment regime. However, by means of screening procedures, restrictions apply in a few areas of "critical interest", i.e. certain sensitive types of land, "significant business assets" other than land, and fishing quotas.

(…) Overseas investors wishing to purchase sensitive land must additionally either intend to reside permanently in New Zealand or demonstrate that the investment will benefit New Zealand. The factors for assessing this benefit are set out in the Act and the Overseas Investment Regulations 2005. Investments in fishing quota must be shown to be in the national interest, as determined by factors set out in section 57H of the Fisheries Act.

(...) Under the Fisheries Act 1996, consent is required for any overseas investments in fishing quota; relevant criteria include that the granting of consent is in the national interest. Overseas persons may not have a 25% or more ownership or control interest in fishing quota without prior Ministerial consent. The Fisheries (Foreign Charter Vessels and other matters) Amendment Act 2014 prohibits foreign flagged charter fishing vessels from fishing in New Zealand waters from 1 May 2016.

Under the overseas investment fishing provisions of the Fisheries Act 1996 (Sections 56 to 58), consent is required for any overseas investment in fishing quota. The criteria for consent that all overseas investments in fishing quota must meet is established in Section 57G of the Act and includes that the granting of consent is in the national interest.

Overseas persons may not have a 25% or more ownership or control interest in fishing quotas, without consent first being obtained from the relevant Ministers (i.e. the Minister for Primary Industries and the Minister of Finance). Under the Overseas Investment Act (2005), all overseas investments in fishing quota are defined as sensitive (section 2).

(...) Commercial fishing is a thriving export subsector, with 90% of all catch being exported. However, restrictions to overseas investment in fishing quotas apply. Foreign flagged charter fishing vessels will be prohibited from fishing in New Zealand waters from 1 May 2016.

The legislation prescribes the circumstances where an overseas person is required to obtain consent before investing in New Zealand, i.e. acquisitions by overseas persons of sensitive land or an interest in sensitive land ; 25% or more ownership or control interest in fishing quota; and any foreign investment that would result in the acquisition of 25% or more ownership or control interest in "significant business assets" (i.e. assets valued at more than NZ$100 million). In its mode 3 horizontal commitments under the GATS, New Zealand is bound to a screening threshold of NZ$10 million.

For all investments, the relevant Minister or Ministers (or their delegate) must be satisfied that overseas investors, inter alia, have business experience and acumen relevant to the investment, are of "good character" and have demonstrated financial commitment to the investment. In addition, where the investment involves sensitive land, the relevant Ministers (or their delegate) must be satisfied that the investment will or is likely to benefit New Zealand. In relation to investments in fishing quota, the relevant Ministers must be satisfied that the investment will or is likely to be in the national interest (section 4.2.6). Box 2.1 lists the different criteria considered in assessing investment applications.

Box 2.1 Overseas investment: criteria considered by the relevant Minister or Ministers (or their delegate)
Criteria for overseas investment in fishing quota
In addition to the criteria used for an overseas investment in significant business assets, the following criteria for an overseas investment in fishing quota must be considered:
• whether the relevant overseas person is a body corporate;
• whether the interest in the fishing quota is capable of being registered in the Quota Register or the annual Catch Entitlement Register; and
• whether the granting of consent is in the "national interest" (as discussed below).

National interest
In assessing whether or not an overseas investment in fishing quota is in the national interest, consideration must be given to some of the Section 17 "Benefit to New Zealand" factors listed under the heading "Criteria for investment in sensitive land" above, and also the following factors:
• the introduction into New Zealand of additional investment for purposes of significant development, or whether the overseas investment will, or is likely to, result in increased processing of New Zealand fish, aquatic life or seaweed; or
• any other factors that are set out in regulations under the Overseas Investment Act 2005 or that the relevant Ministers, having regard to the circumstances and nature of the application, think fit.

The Doha Round remains the Government's top trade priority. The only way we will collectively be able to deliver substantial economic, social and developmental benefits to all WTO members will be through the significant removal of trade barriers, trade-distorting domestic support, harmful fisheries subsidies and other trade barriers through a successful conclusion of the Doha Round. (...)