February 9, 2025 • 13 mins
In the past, overseas investment in New Zealand has been seen as a privilege – rather than a right.
But – could that all be about to change with Prime Minister Christopher Luxon’s latest push for economic growth?
He kicked off 2025 by announcing the establishment of a foreign investment agency – similar to those seen in Ireland and Singapore.
The Government’s holding a ‘global investment summit’ next month – with sovereign wealth and major asset management fund managers expected to attend.
So, how does foreign investment work now? And can we emulate the success of another country, like Ireland, where foreign investment accounts for much of their GDP and private sector employment?
Today on The Front Page, Glenn Shewan, will take us through what foreign investment looks like in New Zealand now – and what could change.
Follow The Front Page on iHeartRadio, Apple Podcasts, Spotify or wherever you get your podcasts.
You can read more about this and other stories in the New Zealand Herald, online at nzherald.co.nz, or tune in to news bulletins across the NZME network.
Host: Chelsea Daniels
Sound Engineer/Producer: Richard Martin
Producer: Ethan Sills
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:06):
Kiaoda. I'm Chelsea Daniels and this is the Front Page,
a daily podcast presented by the New Zealand Herald. In
the past, overseas investment in New Zealand has been seen
as a privilege rather than a riot. But could that
all be about to change with Prime Minister Christopher Luxen's
(00:27):
latest push for economic growth. He kicked off twenty twenty
five by announcing the establishment of a foreign investment agency
similar to those seen in Ireland and Singapore, and the
government's holding a global investment summit next month, with sovereign
wealth and major asset management fund managers expected to attend.
(00:48):
So how does foreign investment work now? And can we
emulate the success of another country like Ireland where foreign
investment accounts for much of their GDP and private sector employment.
Today on the Front Page, Bell Gully partner and overseas
(01:08):
investment lawyer Glenn Shewan will take us through what foreign
investment looks like in New Zealand now and what could change.
First off, Glenn, how does foreign investment work in New
Zealand at the moment?
Speaker 2 (01:25):
In terms of the overseas investment regime. It's been in
place now for over twenty years. The current regime sort
of in the modern form, came into being in two
thousand and five, but we actually had some precursor legislation
to that that governed investments into sensitive land and significant
business assets, which are investments in New Zealand exceeding certain
(01:48):
financial thresholds, and also governed investments into fishing quota. It's
been tinkered with and modernized a few times across the years,
but that's the basics of the system currently.
Speaker 1 (02:00):
How much foreign investment is there at the moment into
New Zealand.
Speaker 2 (02:03):
There's quite a lot. The Overseas Investment Office has useful
dashboards on its website which given indication of the volumes
of investment that it consents every year. So just going
by twenty twenty four, for example, they suggested that there's
over four and a half billion of investments that were
subject to their consent regime.
Speaker 1 (02:23):
So it has been able to invest in New Zealand
been seen as a privilege up until now. I mean,
how will it benefit us opening up the floodgates so
to speak?
Speaker 2 (02:31):
Yeah, I mean the way the legislation is drafted suggests
that it is a privilege to invest in New Zealand,
and I know that the politicians the current government are
considering switching that presumption to a presumption that overseas investment
benefits us. There's a number of initiatives the governments having
a look at in order to facilitate more investment. So
(02:54):
even last year, Minister Seymour gave some ministerial directives to
the OO to improve its decision making time frames and
that has really come through in most of the decisions
that the OO makes are now being made in about
half the time that they used to and that is
being seen as positive by investors. You obviously had Christopher
(03:16):
Luxen's announcements around invest in z a couple of weeks ago,
and then the proposed further reforms to the Obverse's Investment
Act that are coming up. So it's all aimed at
trying to encourage further investment. It's yet to be seen
whether it will involve opening of the floodgates in how
much additional investment will manifest, but the signals are certainly
(03:38):
positive from the government.
Speaker 3 (03:42):
Modeled off the success of Ireland and Singapore. I can
announce today that we have agreed to establish invest New
Zealand as the government's one stop shop for attracting foreign
direct investment. Now, the point of invest New Zealand is clear,
will roll out the welcome mat, streamlining the investment process
(04:03):
and providing tailored support to foreign investors, and the objective
is to increase the capital investment across a range of
critical sectors like banking and fintech, like transport and energy,
manufacturing and innovation. So when the.
Speaker 1 (04:20):
Prime Minister mentions changes to the Overseas Investment Act, what
could they be?
Speaker 2 (04:26):
So, as I mentioned at that moment, the purpose of
the Overseas Investment Act includes a statement that it's a
privilege for overseas persons to invest in New Zealand. The
statements today suggest that that presumption will be reversed to
recognize that it's in New Zealand's interests and benefits to
Zealand to have overseas investment. So that's the primary change
(04:48):
that we're expecting and the result of that will be
easier pathways through the Overseas Investment Act process for investors.
They have said they're not intending to change or at
least change materially what types of investments are currently screened,
and so that is sensitively and significant business are sets
in fishing quota along with certain sensitive industries, but just
(05:09):
make it easier for those investment to get through the
IO process.
Speaker 1 (05:13):
So what kind of things could we see there? Because
I know that in Ireland, for example, there are major
Chinese companies that have decided to set up their European
base in Dublin. Could we see something similar like that
happen here?
Speaker 2 (05:24):
Yeah. I think there's a range of considerations that investors
take into account when they're looking at investing in another country.
The foreign direct investment regulation such as the Overseas Investment
Actors one part of that. There's also tech status, immigration
status in other regulatory settings, along with distance to or
closeness to other markets. So as a range of factors,
(05:46):
I think this is only one part of it. It's
said to be seen how much additional investment we'll see
as a result of these changes.
Speaker 1 (05:52):
Well, you mentioned how much we get at the moment,
and I know that the establishment of invest in Z
is modeled a similar scheme in Ireland and in Singapore
as well. Just going over some Irish numbers was quite staggering.
I read somewhere the United States in twenty twenty three
alone invested four hundred and ninety one point two billion
(06:14):
dollars in Ireland. That's like eight hundred and seventy five
billion in New Zealand dollars. That's a far cry from
what we're seeing at the moment.
Speaker 2 (06:22):
It's a significant amount in Ireland has been encouraging this
type of investment for a very long time now. It's
Investment Agency traces its respect to about nineteen forty nine,
and so it's been in the business of encouraging it
foreign investment for quite some time, and it does that
by throwing quite a lot of resource at that agency
as well. I think it has more than twenty officers
(06:42):
worldwide engaging with investors to encourage that type of investment.
Speaker 1 (06:46):
What is Ireland doing at the moment that we're not doing.
Speaker 2 (06:50):
I think part of it is that traditionally we have
been seen as having quite a restrictive overseas investment regime.
He thinks of five to ten years ago, we had
a reputation for being a difficult place to invest. While
generally speaking overseas investors could get through the Overseas Investment Act,
the timeframes were quite long and quite uncertain, and we
(07:11):
were out of step with other jurisdictions around the world.
So I think one thing Island has done is to
ensure that those barriers are kept to a minimum. I
think we have seen a change in perception of the
New Zealand regime in the last year or two and
then has started to trickle through to be understood by
overseas investors. So we're starting to improve that aspect of
the investment environment. As I say, that's just one piece
(07:34):
of the puzzle. The tax regime, immigration regime, other regulations
that are all relevant as well.
Speaker 1 (07:54):
Should New Zealand be wary of who we actually allow
to invest here? I mean, I'm looking at Ireland again
as a shining example. Right the Irish economy has been
seeing more and more Chinese investment, but there are worries
there that that comes at I guess a reputational cost.
So they're kind of stuck in this awkward middle ground
where on one hand, Dublin is the European headquarters for
(08:15):
something like Shean, but on the other hand, Shean's had
to admit it found child labor and its supply chain recently.
So how do we balance investment opportunities while still having
I guess it's social conscience, I suppose.
Speaker 4 (08:28):
Yeah.
Speaker 2 (08:28):
So there have been some changes to our legislation recently
which have included a national security and public order aspect
to our regime, and that really is aimed to bring
us into line with other countries which screen investments for
impacts on our national security in public order. So that's
looking at investments in particular in our critical infrastructure in
(08:50):
any entities here who are critical supplies to the New
Zealand defense or intelligence agencies, or who deal with military
and dual use technology. So I think that is part
of the regime that's quite uncontroversial in targets those investors
that we might have concerns about from a national security perspective. Otherwise,
the Act is very much neutral in terms of who
(09:12):
invests here and it's not really a question for the
overseas Investment regulation.
Speaker 1 (09:16):
We're also looking into the foreign buyer ban, that is,
at the moment, non resident foreigners being unable to purchase
existing homes in New Zealand bar Australians and Singaporeans. Does
the ban and the changes to the Overseas Investment Act
do they go hand in hand here? Do you think
there'll be a reversal of that ban.
Speaker 2 (09:35):
Yeah, it's not clear what changes will be made to
that ban. I think there's different views possibly within the
coalition parties. We have some optimism that there may be
some improvements in the status for skilled migrant investors, but
none of that's been laid out yet.
Speaker 1 (09:52):
Yeah, so it's just a wait and see. How I know.
I read somewhere on one roof actually they were talking
to those higher end real estate agents and they there
are some whisperings at the moment. I suppose given that,
I'm sure those higher ups of overseas companies coming here
will want a nice, flashy waterfront home to live in.
Speaker 2 (10:09):
Yeah. Possibly. We haven't seen anything official out of the
government on there.
Speaker 4 (10:17):
And this has always been as your first if somebody
has come to this country like they do to other countries,
bringing you fifty million dollars to invest in a huge
industry and to ensure that we've got with this non
employment now potential exports with exports in this area now,
then we will look at it. Certainly, that's always been
our view because that means you've got us to use
investor committed to this un economy and not just above
(10:39):
hole in case they want to come in one day.
Speaker 1 (10:43):
So Luxon's Global Investment Summit is scheduled for mid next month.
How much pressure is writing on this.
Speaker 2 (10:52):
Yeah, it's not clear how much of a difference the
proposed reforms will make. As I say that it's been
a a series of announcements and changes that have improved
our reputation as a place for foreign investment. I think
they will be clear in the minds of those attending
that summer, but there may be some desire by the
(11:12):
government to give some more details of the proposed further
reforms ahead of that summer.
Speaker 1 (11:17):
If you had the magic pen and you were going
to change the Act to make New Zealand exponentially more
attractive to overseas investors, what are some of the things
that you would change tomorrow?
Speaker 2 (11:30):
There are quite a few technical aspects of the legislation
that sources of frustration for overseas investors, particularly around the
need to advertise farmland in some of the information that
needs to be provided, but I haven't sort of thought
through in any detail how it go about that.
Speaker 1 (11:48):
So in summary, in terms of the changes to the
Act and how it compares to that of other countries,
I suppose if we were to dot point at, how
would we summarize what is actually going to happen.
Speaker 2 (12:00):
Yeah. I think historically we have had that reputation as
being somewhat more restrictive for overseas investment than other countries.
Other countries since then have developed their own relatory regimes
for foreign direct investment, which has brought us into slightly
closer alignment, although possibly with our regime being somewhat more
fulsome than the overseas comparators. But there's been a series
(12:23):
of announcements and changes in recent times that have improved
that reputation, and I think that the changes that we
are going to see to the Act will just further
enhance that.
Speaker 1 (12:33):
And if you were to take your peck, or if
you were to guess what kind of companies or investment
funds do you think I'd already lining up?
Speaker 2 (12:42):
I think we already see a broad mix of investors.
We have seen a lot of private equity taking interest
in listed companies. We also see large trade players investing
in their counterparts in New Zealand, so it's a broad
broadbooks investors.
Speaker 1 (13:01):
Thanks for joining us, Glenn.
Speaker 2 (13:03):
You're welcome. Good ship.
Speaker 5 (13:07):
That's it for this episode of the Front Page. You
can read more about today's stories and extensive news coverage
at enzdherld dot co dot mz. The Front Page is
produced by Ethan Sills and Richard Martin, who is also
our sound engineer.
Speaker 1 (13:24):
I'm Chelsea Daniels. Subscribe to the Front Page on iHeartRadio
or wherever you get your podcasts, and tune in tomorrow
for another look behind the headlines.
Kiaoda. I'm Chelsea Daniels and this is the Front Page,
a daily podcast presented by the New Zealand Herald. In
the past, overseas investment in New Zealand has been seen
as a privilege rather than a riot. But could that
all be about to change with Prime Minister Christopher Luxen's
(00:27):
latest push for economic growth. He kicked off twenty twenty
five by announcing the establishment of a foreign investment agency
similar to those seen in Ireland and Singapore, and the
government's holding a global investment summit next month, with sovereign
wealth and major asset management fund managers expected to attend.
(00:48):
So how does foreign investment work now? And can we
emulate the success of another country like Ireland where foreign
investment accounts for much of their GDP and private sector employment.
Today on the Front Page, Bell Gully partner and overseas
(01:08):
investment lawyer Glenn Shewan will take us through what foreign
investment looks like in New Zealand now and what could change.
First off, Glenn, how does foreign investment work in New
Zealand at the moment?
Speaker 2 (01:25):
In terms of the overseas investment regime. It's been in
place now for over twenty years. The current regime sort
of in the modern form, came into being in two
thousand and five, but we actually had some precursor legislation
to that that governed investments into sensitive land and significant
business assets, which are investments in New Zealand exceeding certain
(01:48):
financial thresholds, and also governed investments into fishing quota. It's
been tinkered with and modernized a few times across the years,
but that's the basics of the system currently.
Speaker 1 (02:00):
How much foreign investment is there at the moment into
New Zealand.
Speaker 2 (02:03):
There's quite a lot. The Overseas Investment Office has useful
dashboards on its website which given indication of the volumes
of investment that it consents every year. So just going
by twenty twenty four, for example, they suggested that there's
over four and a half billion of investments that were
subject to their consent regime.
Speaker 1 (02:23):
So it has been able to invest in New Zealand
been seen as a privilege up until now. I mean,
how will it benefit us opening up the floodgates so
to speak?
Speaker 2 (02:31):
Yeah, I mean the way the legislation is drafted suggests
that it is a privilege to invest in New Zealand,
and I know that the politicians the current government are
considering switching that presumption to a presumption that overseas investment
benefits us. There's a number of initiatives the governments having
a look at in order to facilitate more investment. So
(02:54):
even last year, Minister Seymour gave some ministerial directives to
the OO to improve its decision making time frames and
that has really come through in most of the decisions
that the OO makes are now being made in about
half the time that they used to and that is
being seen as positive by investors. You obviously had Christopher
(03:16):
Luxen's announcements around invest in z a couple of weeks ago,
and then the proposed further reforms to the Obverse's Investment
Act that are coming up. So it's all aimed at
trying to encourage further investment. It's yet to be seen
whether it will involve opening of the floodgates in how
much additional investment will manifest, but the signals are certainly
(03:38):
positive from the government.
Speaker 3 (03:42):
Modeled off the success of Ireland and Singapore. I can
announce today that we have agreed to establish invest New
Zealand as the government's one stop shop for attracting foreign
direct investment. Now, the point of invest New Zealand is clear,
will roll out the welcome mat, streamlining the investment process
(04:03):
and providing tailored support to foreign investors, and the objective
is to increase the capital investment across a range of
critical sectors like banking and fintech, like transport and energy,
manufacturing and innovation. So when the.
Speaker 1 (04:20):
Prime Minister mentions changes to the Overseas Investment Act, what
could they be?
Speaker 2 (04:26):
So, as I mentioned at that moment, the purpose of
the Overseas Investment Act includes a statement that it's a
privilege for overseas persons to invest in New Zealand. The
statements today suggest that that presumption will be reversed to
recognize that it's in New Zealand's interests and benefits to
Zealand to have overseas investment. So that's the primary change
(04:48):
that we're expecting and the result of that will be
easier pathways through the Overseas Investment Act process for investors.
They have said they're not intending to change or at
least change materially what types of investments are currently screened,
and so that is sensitively and significant business are sets
in fishing quota along with certain sensitive industries, but just
(05:09):
make it easier for those investment to get through the
IO process.
Speaker 1 (05:13):
So what kind of things could we see there? Because
I know that in Ireland, for example, there are major
Chinese companies that have decided to set up their European
base in Dublin. Could we see something similar like that
happen here?
Speaker 2 (05:24):
Yeah. I think there's a range of considerations that investors
take into account when they're looking at investing in another country.
The foreign direct investment regulation such as the Overseas Investment
Actors one part of that. There's also tech status, immigration
status in other regulatory settings, along with distance to or
closeness to other markets. So as a range of factors,
(05:46):
I think this is only one part of it. It's
said to be seen how much additional investment we'll see
as a result of these changes.
Speaker 1 (05:52):
Well, you mentioned how much we get at the moment,
and I know that the establishment of invest in Z
is modeled a similar scheme in Ireland and in Singapore
as well. Just going over some Irish numbers was quite staggering.
I read somewhere the United States in twenty twenty three
alone invested four hundred and ninety one point two billion
(06:14):
dollars in Ireland. That's like eight hundred and seventy five
billion in New Zealand dollars. That's a far cry from
what we're seeing at the moment.
Speaker 2 (06:22):
It's a significant amount in Ireland has been encouraging this
type of investment for a very long time now. It's
Investment Agency traces its respect to about nineteen forty nine,
and so it's been in the business of encouraging it
foreign investment for quite some time, and it does that
by throwing quite a lot of resource at that agency
as well. I think it has more than twenty officers
(06:42):
worldwide engaging with investors to encourage that type of investment.
Speaker 1 (06:46):
What is Ireland doing at the moment that we're not doing.
Speaker 2 (06:50):
I think part of it is that traditionally we have
been seen as having quite a restrictive overseas investment regime.
He thinks of five to ten years ago, we had
a reputation for being a difficult place to invest. While
generally speaking overseas investors could get through the Overseas Investment Act,
the timeframes were quite long and quite uncertain, and we
(07:11):
were out of step with other jurisdictions around the world.
So I think one thing Island has done is to
ensure that those barriers are kept to a minimum. I
think we have seen a change in perception of the
New Zealand regime in the last year or two and
then has started to trickle through to be understood by
overseas investors. So we're starting to improve that aspect of
the investment environment. As I say, that's just one piece
(07:34):
of the puzzle. The tax regime, immigration regime, other regulations
that are all relevant as well.
Speaker 1 (07:54):
Should New Zealand be wary of who we actually allow
to invest here? I mean, I'm looking at Ireland again
as a shining example. Right the Irish economy has been
seeing more and more Chinese investment, but there are worries
there that that comes at I guess a reputational cost.
So they're kind of stuck in this awkward middle ground
where on one hand, Dublin is the European headquarters for
(08:15):
something like Shean, but on the other hand, Shean's had
to admit it found child labor and its supply chain recently.
So how do we balance investment opportunities while still having
I guess it's social conscience, I suppose.
Speaker 4 (08:28):
Yeah.
Speaker 2 (08:28):
So there have been some changes to our legislation recently
which have included a national security and public order aspect
to our regime, and that really is aimed to bring
us into line with other countries which screen investments for
impacts on our national security in public order. So that's
looking at investments in particular in our critical infrastructure in
(08:50):
any entities here who are critical supplies to the New
Zealand defense or intelligence agencies, or who deal with military
and dual use technology. So I think that is part
of the regime that's quite uncontroversial in targets those investors
that we might have concerns about from a national security perspective. Otherwise,
the Act is very much neutral in terms of who
(09:12):
invests here and it's not really a question for the
overseas Investment regulation.
Speaker 1 (09:16):
We're also looking into the foreign buyer ban, that is,
at the moment, non resident foreigners being unable to purchase
existing homes in New Zealand bar Australians and Singaporeans. Does
the ban and the changes to the Overseas Investment Act
do they go hand in hand here? Do you think
there'll be a reversal of that ban.
Speaker 2 (09:35):
Yeah, it's not clear what changes will be made to
that ban. I think there's different views possibly within the
coalition parties. We have some optimism that there may be
some improvements in the status for skilled migrant investors, but
none of that's been laid out yet.
Speaker 1 (09:52):
Yeah, so it's just a wait and see. How I know.
I read somewhere on one roof actually they were talking
to those higher end real estate agents and they there
are some whisperings at the moment. I suppose given that,
I'm sure those higher ups of overseas companies coming here
will want a nice, flashy waterfront home to live in.
Speaker 2 (10:09):
Yeah. Possibly. We haven't seen anything official out of the
government on there.
Speaker 4 (10:17):
And this has always been as your first if somebody
has come to this country like they do to other countries,
bringing you fifty million dollars to invest in a huge
industry and to ensure that we've got with this non
employment now potential exports with exports in this area now,
then we will look at it. Certainly, that's always been
our view because that means you've got us to use
investor committed to this un economy and not just above
(10:39):
hole in case they want to come in one day.
Speaker 1 (10:43):
So Luxon's Global Investment Summit is scheduled for mid next month.
How much pressure is writing on this.
Speaker 2 (10:52):
Yeah, it's not clear how much of a difference the
proposed reforms will make. As I say that it's been
a a series of announcements and changes that have improved
our reputation as a place for foreign investment. I think
they will be clear in the minds of those attending
that summer, but there may be some desire by the
(11:12):
government to give some more details of the proposed further
reforms ahead of that summer.
Speaker 1 (11:17):
If you had the magic pen and you were going
to change the Act to make New Zealand exponentially more
attractive to overseas investors, what are some of the things
that you would change tomorrow?
Speaker 2 (11:30):
There are quite a few technical aspects of the legislation
that sources of frustration for overseas investors, particularly around the
need to advertise farmland in some of the information that
needs to be provided, but I haven't sort of thought
through in any detail how it go about that.
Speaker 1 (11:48):
So in summary, in terms of the changes to the
Act and how it compares to that of other countries,
I suppose if we were to dot point at, how
would we summarize what is actually going to happen.
Speaker 2 (12:00):
Yeah. I think historically we have had that reputation as
being somewhat more restrictive for overseas investment than other countries.
Other countries since then have developed their own relatory regimes
for foreign direct investment, which has brought us into slightly
closer alignment, although possibly with our regime being somewhat more
fulsome than the overseas comparators. But there's been a series
(12:23):
of announcements and changes in recent times that have improved
that reputation, and I think that the changes that we
are going to see to the Act will just further
enhance that.
Speaker 1 (12:33):
And if you were to take your peck, or if
you were to guess what kind of companies or investment
funds do you think I'd already lining up?
Speaker 2 (12:42):
I think we already see a broad mix of investors.
We have seen a lot of private equity taking interest
in listed companies. We also see large trade players investing
in their counterparts in New Zealand, so it's a broad
broadbooks investors.
Speaker 1 (13:01):
Thanks for joining us, Glenn.
Speaker 2 (13:03):
You're welcome. Good ship.
Speaker 5 (13:07):
That's it for this episode of the Front Page. You
can read more about today's stories and extensive news coverage
at enzdherld dot co dot mz. The Front Page is
produced by Ethan Sills and Richard Martin, who is also
our sound engineer.
Speaker 1 (13:24):
I'm Chelsea Daniels. Subscribe to the Front Page on iHeartRadio
or wherever you get your podcasts, and tune in tomorrow
for another look behind the headlines.
Popular Podcasts
Math & Magic: Stories from the Frontiers of Marketing with Bob Pittman
How do the smartest marketers and business entrepreneurs cut through the noise? And how do they manage to do it again and again? It's a combination of math—the strategy and analytics—and magic, the creative spark. Join iHeartMedia Chairman and CEO Bob Pittman as he analyzes the Math and Magic of marketing—sitting down with today's most gifted disruptors and compelling storytellers.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
The Breakfast Club
The World's Most Dangerous Morning Show, The Breakfast Club, With DJ Envy And Charlamagne Tha God!