Page 41 - English-DBINZ brochure-2019

Buddle Findlay 38

INCIDENTAL RESIDENTIAL USE

This pathway is for overseas investors that want to buy land and use it for residential purposes, but only
in support of a relevant business – eg as staff accommodation. It requires that:

ə The relevant Ministers are satisfied that the residential land will be, or is likely to be, used for
residential purposes, but only in support of the relevant business (which cannot be in the business of
using land for residential purposes)
ə The relevant interest is or will likely be acquired in the ordinary course of business.
Ministers may also take into account considerations such as whether reasonable alternatives exist, and
whether the land would be used as accommodation for staff.

BENEFIT TO NEW ZEALAND
Benefits are assessed by comparing what is likely to happen with the investment with what is likely to
happen without the investment (the counterfactual).
The question of whether an investment will, or is likely to, benefit New Zealand is determined with
reference to specific statutory criteria, including:
ə Whether there will be an economic benefit (for example, new jobs, increased exports, enhanced
competition, and introduction of new technology or business skills)
ə Whether New Zealand’s flora, fauna, and historic heritage will be protected
ə Whether there will be adequate mechanisms for providing or improving public walking access
ə Whether any foreshore, seabed, lakebed and riverbed land has been offered back to the Crown
ə Other factors, including New Zealand’s image overseas, the investor’s previous investments,
government policy, and the participation of New Zealanders in the investment.
A new Ministerial Directive Letter has been issued that directs the Overseas Investment Office as to the
relative weighting of each criterion in their decision making process, including specific directives for
forestry and a tighter regime for rural land. The directive emphasises the government’s view that it is a
privilege for overseas investors to own or control rural land, and accordingly overseas investment must
demonstrate that a relatively high degree of benefits to New Zealand will result from the investment
before consent can be granted. This has been reflected in a more stringent approach being taken by the
Overseas Investment Office in assessing applications for consent. As referred to above, a revised consent
regime will also apply in relation to investments in sensitive land that is or includes residential land, if the
new government’s proposed Bill is enacted.

FORESTRY
Recent changes to the Overseas Investment Act brought forestry activities within the scope of the regime,
together with new forestry-specific consent pathways that are intended to simplify the consent process
for forestry investors. As a preliminary point, there is an exemption for an overseas person acquiring
fewer than 1,000 hectares of forestry rights per calendar year, in which the requirement for consent does
not apply.
For acquisitions that do require consent, there are three consent pathways to show benefit to New
Zealand. These pathways are:
ə The standard benefit to New Zealand test described above
ə A modified benefit test
ə A special forestry test.
While a forestry investor could choose to apply under the standard benefits test, two streamlined
pathways are available.