Thursday May 21 2020
News Source: Global Disclosures
Focus: Foreign Investment
Country: New Zealand
The Associate Minister of Finance Hon David Parker announced the introduction of legislation to update New Zealand’s overseas investment screening rules to address new challenges created by the COVID-19 pandemic.
The Overseas Investment framework in New Zealand does not ordinarily allow screening of business investments of less than $100 million (or higher where a free trade agreement applies).
In response to the impact of COVID-19, amendments to the Overseas Investment Act 2005 put in place a temporary requirement for foreign investors to notify an intention to take a controlling investment in any New Zealand business, if that results in more than a 25% ownership interest, or increases an existing interest to or beyond 50, 75 or 100%. This allows the Government to ensure they are not contrary to New Zealand’s national interest.
The temporary power will be reviewed every 90 days and remain in place only as long as it is necessary to protect the essential interests of New Zealand while the COVID-19 pandemic and its economic aftermath continues to have significant impact in New Zealand.
The measures are being introduced to Parliament in a Bill, to be passed quickly, which includes some of the measures to protect New Zealand’s interests announced in November 2019 as part of the Phase Two Reform of the Overseas Investment Act.
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