The Government has introduced the Overseas Investment (National Interest Test and Other Matters) Amendment Bill 2025 (the Bill), which proposes significant reforms to the Overseas Investment Act 2005 (the Act). The Bill is part of the Government’s broader strategy to promote overseas investment in New Zealand by making it easier to invest, while also ensuring New Zealand’s national interests are protected where appropriate.
Key Proposed Changes
The Bill spells out the Government’s changes outlined in February this year (see our assessment here). It aims to reduce compliance costs, make decision-making timelier, and ensure the Government has the tools necessary to safeguard New Zealand’s national interest. The changes are focused on less compliance and quicker decision making for most asset classes. However, there is no real change for farmland, residential land and fishing quota.
The key proposed changes are:
• Changing the purpose statement in the Act, so that it recognises it is a privilege to invest in sensitive New Zealand assets, while recognising the role of overseas investment in economic opportunity by enabling the timely consent of less sensitive investments through an initial national interest risk assessment.
• Consolidating the current national interest, benefit to New Zealand and investor tests into a single test for all screened assets, other than farmland, residential land and fishing quota which will continue to be screened under the existing tests.
• For screened assets other than farmland, residential land and fishing quota, requiring the Overseas Investment Office (OIO) as regulator to grant consent within 15 working days unless there are reasonable grounds to consider that a risk to national interest exists, in which case a national interest assessment (NIA) is required. We comment on the new NIA further below.
• Regulations that can be created to specify new classes of screened transactions that must undergo an NIA.
• Providing that only the relevant Minister can decline an investment in screened assets if the relevant Minister considers the transaction is contrary to the national interest. That is, the power to decline cannot be delegated to the OIO.
Overall, the new 15 working day statutory timeframe (discussed further below) will improve decision times for most significant business assets consents, although the differential is limited as such decisions are currently made within 18 working days following the Ministerial Directive issued in June 2024. The timeframe for sensitive land consents (excluding residential and farmland) will improve from the current expectation of 35 working days. However, the timeframe appears not to change where a transaction would currently trigger a national interest assessment – currently a 55 working day process.
Additional Features
The Bill also contains a number of additional changes that are designed to make the consent process easier or completely remove the requirement for consent. These changes include:
• Providing a process for repeat investors applying under the new national interest test (where the repeat investor’s circumstances have not changed).
• Removing the requirement for consent for an overseas investor, increasing ownership and control interest from 75%+ to 100% (except for strategically important businesses).
• Delegation of most decisions to the OIO.
• Providing the OIO with the power to grant retrospective exemptions to provide another option to address breaches of the Act and to take proportionate compliance action.
• A few other minor and technical changes to improve efficiency of the overseas investment regime (such as the repeal of the specific provisions relating to water bottling and drafting updates to clarify parts of the legislation).
National Interest Assessment – what does it mean for “significant business assets” transactions?
Transactions trigger screening under the Act where there is an overseas investment in “significant business assets”. This requires the value of the investment / New Zealand assets to exceed certain monetary thresholds and not otherwise involve sensitive land.
The Act currently requires overseas investors in significant business assets to satisfy the “investor test”, which sets out a prescriptive list of character and capability matters that an investor must meet. If the transaction also involves a “strategically important business” or an acquisition by “a non-NZ government investor”, the current “national interest test” will also apply on a mandatory basis.
The Bill proposes to replace the two tests with the new national interest test. The new national interest test will be met if:
• Stage 1 – Initial Risk Assessment: after considering an initial national interest risk assessment, the OIO considers that a NIA is not required, or
• Stage 2 – NIA: after a NIA has been completed, the application is not referred to the Minister, or
• Stage 3 – Ministerial Decision: if, after consideration by the Minister, the Minister considers the transaction is not contrary to the national interest.
The introduction of an initial national interest risk assessment (deciding whether or not an NIA is required) is a new step in the process (Stage 1). While it is a new step, we expect the intention is that the OIO will be able to deal with most significant business applications, other than any applications which would have been subject to the mandatory “national interest test” under the current rules, at Stage 1, within the maximum timeframe of 15 working days.
A transaction will need a NIA if the OIO has reasonable grounds to consider it may constitute a risk to New Zealand’s national interest. If the OIO does decide this, then the OIO will proceed to Stage 2 (an NIA).
In undertaking an NIA, the OIO:
• must comply with any relevant directions from the Ministers (these will be set out in a Ministerial directive letter to come into force at the same time as the commencement of the Bill once passed):
• must have regard to mandatory factors being:
o the new purpose statement,
o the risk of the overseas investment transaction to the national interest, including its impact on national security and public order, and
o whether an identified risk to the national interest can be adequately managed by another regulatory regime.
• may have regard to one or more non-mandatory factors being:
o investor risk factors, including character and capability. This appears to replace the previous investor test, but also appears potentially much broader than the current investor test which prescribes a list of character and capability matters,
o whether a national interest risk may be adequately managed by a condition imposed on the investment, and
o whether a risk that is contrary to the national interest may be offset by the benefits of the transaction. While not defined here, it would appear to allow the OIO to consider the benefits of the transaction if there is a risk that is contrary to the national interest.
Importantly, the Bill proposes that the OIO cannot decline a transaction at this stage and can only refer the application to the Minister (Stage 3) if it has reasonable grounds to consider that the transaction may be contrary to New Zealand’s national interest.
Stage 3 involves the Minister making a decision under the national interest test. The Minister can decline consent if the Minister considers that the transaction is contrary to New Zealand’s national interest. In making a decision, the Minister:
• must have regard to any relevant directions in the Ministerial directive letter,
• must have regard to the mandatory factors noted above,
• may have regard to one or more of the non-mandatory factors noted above.
Under the Act, if the acquisition of significant business assets involves a strategically important business or certain non-NZ government investors, then the current national interest test applies and the relevant Minister is required to undertake a separate assessment of the national interest test as it applies to the transaction, but within 55 working days. The Bill seeks to streamline the current approach, by having the new national interest test apply under the staged assessment process outlined above. The Bill does not currently include a statutory assessment timeframe for Stage 2 or Stage 3 – we expect that will be addressed in updated regulations.
In our experience the process for obtaining consent to the acquisition of significant business assets under the current regime were relatively simple and consents were being delivered promptly (usually within 18 working days, being half the current statutory maximum). The change to a NIA for all significant business assets applications could be seen by some as more complex and more uncertain.
Overall, we expect that the new national interest test is likely to enable slightly quicker decision making for any applications which would not be subject to the mandatory “national interest test” under the current rules but it could create more timing uncertainty for any applications which would be subject to the mandatory “national interest test” under the current rules.
While the Bill is a proposal at this stage, the real test on how the new test might streamline and simplify the application process will come down to how the OIO implements the new test, in terms of the information required in an application and the OIO’s level of delegation and the directions given in the Ministerial directive letter.
What does the Bill mean for “sensitive land” transactions?
Transactions trigger screening under the Act where there is an overseas investment in “sensitive land”. The category of land determines the relevant test that must be satisfied for consent to be granted to the acquisition. The Bill leaves the tests applying to farmland and residential land largely unchanged. However, there are some important proposed changes of note affecting other types of sensitive land.
Forestry
Forestry is currently a type of sensitive land where a special and more streamlined test applies relative to the tests that currently apply to other types of sensitive land. The Bill proposes to repeal the special forestry test provisions and apply the national interest risk assessment process described above. Farmland to forestry conversions will still have to satisfy the higher “farmland benefit” test.
Other sensitive land
The Bill proposes that an application to acquire any other type of sensitive land (excluding farmland and residential land) will go through the new national interest risk assessment process, rather than the overseas investor having to show that the purchase benefits New Zealand. This proposed change is significant and we expect this category of application is likely to see savings in terms of timing and cost.
Next Steps
The Bill is currently before Parliament and is expected to be passed by the end of the year, and the new overseas investment regime implemented by early 2026. We will continue to monitor the Bill’s progress and provide updates as it moves through Parliament.
Please contact a member of our Overseas Investment team if you would like to make a submission on the Bill or have any questions about how these changes may affect you.
Disclaimer: This publication is necessarily brief and general in nature. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.
