From 1 March 2013, changes have been made to the threshold for acquisitions of "significant business assets" by Australians investing in New Zealand.
Private Australian investors no longer require New Zealand Overseas Investment Office consent for acquisitions where the target has business assets of less than NZ$477 million. This replaces the NZ$100 million threshold and will be adjusted annually in line with inflation.
The current NZ$100 million threshold will remain for non-Australian investors and Australian Government investors.
The changes do not apply to an investment involving "sensitive land". The existing consent regime will still apply to an Australian investor making an investment in sensitive land. There are many different types of "sensitive land", but the most common types are non-urban land over five hectares and land over 0.4 hectares that adjoins certain land such as a lake, a regional park, a reserve or a historic place. Many business investments in New Zealand involve sensitive land because of this broad definition.
For more information, please see our recent article on the changes.
Clayton Utz, our Lex Mundi relationship firm in Australia, has provided the following summary on the equivalent changes that will apply when New Zealanders invest in Australia.
A look across the ditch: new monetary limits for New Zealand investors into Australia
From 1 March 2013, most New Zealand investments in Australia will not require vetting by the Foreign Investment Review Board.
Private New Zealand investors will only be subject to foreign investment screening if the target value is greater than A$1078 million (indexed annually) in relation to developed commercial real estate and most businesses. The previous threshold was A$248 million.
The A$248 million threshold (indexed annually) continues to apply to:
- acquisitions in the prescribed sensitive sectors (media, telecommunications, transport, military related goods and services, encryption and security technologies and communications systems, and uranium or plutonium related activities);
- acquisitions by investors owned by the NZ Government.
In addition, investments in the financial sector will still require approval under the Financial Sector (Shareholdings) Act, 1988 (Cth).
These changes bring inbound New Zealand investments into line with those from the USA. They were first flagged in February 2011, when the Australian and New Zealand Prime Ministers signed the Protocol on Investment to the Australia-New Zealand Closer Economic Relations Trade Agreement.
For more information, please see Clayton Utz's recent article on the changes.