Page 42 - English-DBINZ brochure-2019

39 Doing business in New Zealand

MODIFIED BENEFITS TEST

This test requires that the overseas person demonstrate that the investment will likely result in
substantial and identifiable benefit to New Zealand, compared with what the current owner would create
(rather than the hypothetical alternative New Zealand purchaser typically used as a comparison in the
standard benefit to New Zealand test). There are 21 benefit factors against which the investment is
assessed.
This test is most likely to be relevant when a forestry investor proposes to convert bare land into a
forestry operation. Generally, the overseas person must show that they will use the land exclusively (or
nearly exclusively) for forestry, and that the crop will be replanted after harvest. The land can be used
for residential purposes, but only to provide accommodation to support the forestry activities.

SPECIAL FORESTRY TEST
This is a streamlined test, which can be used when buying forestry land, or purchasing land to establish a
forest.
The test is a “checklist” of criteria; no further analysis is required. Generally, the overseas person must
show that they will use the land exclusively (or nearly exclusively) for forestry, and that the crop will
be replanted after harvest. The relevant land cannot be solely residential. The land can be used for
residential purposes, but only to provide accommodation to support the forestry activities.
A standing consent is available on the basis of this test. This allows a person to obtain consent prior to
identifying the particular land that they intend to acquire. To obtain a standing consent, the overseas
person must, among other things, have a strong track record of compliance with the Act.

ENFORCEMENT AND PENALTIES
The Overseas Investment Office monitors compliance with the Overseas Investment Act and consent
conditions. Offences under the Overseas Investment Act include:
ə Giving effect to an overseas investment without consent
ə Defeating, evading or circumventing the operation of the Act
ə Restricting, obstructing or deceiving a person who is executing a power or function under the Act.
The penalties for these offences are:

ə In the case of an individual, imprisonment for up to 12 months or a fine up to NZ$300,000
ə In the case of a company, a fine up to NZ$300,000.
It is also an offence to:
ə Knowingly or recklessly make any false or misleading statement or material omission to the regulator,
or provide a false or misleading document (fine up to NZ$300,000)
ə Without lawful excuse, fail to comply with the Act, regulations or a related notice, requirement or
condition (fine up to NZ$100,000).
Where a person has contravened or committed an offence under the Act, failed to comply with a notice
requiring information failed to comply with a consent condition or been involved in a breach of the Act,
the regulator may also apply for the Court to:
ə Order the disposal of property acquired in contravention of the Overseas Investment Act
ə Order payment of a civil penalty not exceeding the higher of $300,000, three times the amount of any
quantifiable gain, the cost of remedying the breach of condition, or the loss suffered by a person in
relation to a breach of condition.