The next stage in the reform of New Zealand's overseas investment regime is underway, with the Overseas Investment (National Interest Test and Other Matters) Amendment Bill 2025 now open for public submissions. The Bill marks a major step in the Government’s broader strategy to encourage overseas investment, while still protecting New Zealand’s national interests.
The Bill aims to make it quicker and simpler for overseas investors to obtain approvals for less sensitive transactions. However, the Government will still retain firm controls over investments that may raise national security or strategic concerns. Consistent with previous government announcements and policy objectives, the proposed new regime is designed to balance economic opportunity with the protection of New Zealand’s interests.
Key proposed changes under the Bill
New Purpose Statement
The Bill includes an updated purpose statement, now recognising the role of overseas investment in increasing economic opportunity by enabling the timely consent of less sensitive investments through an initial national interest risk assessment. The aim is to enable faster decision making for investments unlikely to raise national interest concerns.
New Three-Stage National Interest Test
A key feature of the Bill is the replacement of multiple existing tests under the Overseas Investment Act with a single consolidated national interest test for most overseas investments. This unified test will apply to investments in significant business assets, existing plantation forestry, and other types of sensitive land, though farmland, fishing quota, and residential land remain subject to existing screening rules.
The new national interest test introduces a structured, three-stage process:
- Initial National Interest Risk Assessment: The Overseas Investment Office (OIO) considers whether the transaction may pose a risk to New Zealand’s national interest, and therefore whether a full national interest assessment is required. If no concerns are identified, the National Interest Test is met, and consent can be granted. This stage must be completed by the OIO within 15 working days.
- National Interest Assessment: If concerns arise at stage 1, the OIO will undertake a full national interest assessment, taking into account the factors and considerations set out below. If the OIO considers there are reasonable grounds to believe a transaction could be contrary to New Zealand's national interest, the assessment moves to stage 3. The OIO cannot decline consent at this stage.
- Ministerial Decision: Stage 3 involves the Minister (not the OIO) ultimately making a decision whether or not to decline consent to an investment if it is deemed contrary to New Zealand's national interest.
The national interest assessment will require mandatory consideration of:
- The new purpose statement
- Risks to national security and public order
- Whether risks can be managed under other regulatory regimes
- Any relevant directions from the Minister (which will be set out in a new Ministerial Directive letter to be published when the Bill is passed).
In addition, the OIO and the Minister may consider non-mandatory factors such as the investor's character and capability, the possibility of mitigating risks through conditions on the investment, and whether the benefits of a transaction could offset national interest risks.
Faster Pathways and Technical Improvements
The Bill also contains several features aimed at reducing red tape:
- Repeat Investor Pathway: A streamlined process for repeat investors whose circumstances have not changed, enabling faster consents for lower risk transactions.
- Relaxation of Ownership Increase Rules: Overseas investors will no longer require consent to increase ownership or control from 75% to 100%, unless the investment involves a strategically important business.
- Retrospective Exemptions: The OIO will be empowered to grant retrospective exemptions, providing more flexibility to address accidental breaches of the Act.
Ongoing Flexibility and Ministerial Discretion
The Bill provides for significant Ministerial discretion, allowing government to interpret national interest considerations in line with prevailing policy and security concerns. This approach aligns New Zealand’s regime more closely with international counterparts such as Australia, where Ministers have broad powers to scrutinise and condition foreign investments.
Next Steps
The Bill is before the Finance and Expenditure Select Committee, with submissions open until 23 July 2025. The Government aims to pass the legislation by the end of this year, with the new regime intended to take effect in early 2026.
If you would like support in making a submission, or would like to understand how the proposed changes may impact your business, please get in touch with one of our experts below.
Submissions on the Bill can be made on the New Zealand Parliament website here.