The government has today announced that the fees charged by the Overseas Investment Office (OIO) will be increasing, following a consultation period beginning in October last year. The announcement also foreshadows the overhaul of a number of other aspects of the overseas investment regime set for later this year.
While measures to reduce consent times and streamline the process are indeed welcome, it is not yet clear what impact the measures will have (and indeed, aside from the fee increases, it is not yet clear what the specific measures are). Accordingly, at the moment applicants are faced with higher fees but no guarantee as to the resulting benefits.
We detail the proposed changes below.
OIO's fees consultation
In October 2015 the OIO began a consultation process with stakeholders on increasing its fees as one measure to address its lengthy timeframes. Bell Gully's submission highlighted, amongst other matters, that:
In February 2016 the OIO sought further consultation on a further proposal to increase the fee for applications seeking consent to acquire significant business assets to NZ$32,000, while reducing fees for lower value sensitive land and fishing quota applications. Bell Gully submitted that for such a significant fee increase, clients would expect to receive a much shorter timeframe target than the proposed 42 to 60 working day target.
Today's announcements comprise the outcome of this consultation process.
The changes announced in today's media release are set out as follows.
OIO fees will increase by between 8.7% and 166% for different application types. The fee for an application to invest in significant business assets is set to increase from around NZ$13,000 to NZ$32,000 (a 143% increase). Applications to acquire an interest in sensitive land of an area less than 5ha by an overseas person who does not intend to reside in New Zealand will, in some cases, increase to NZ$43,500 (an 93% increase). In addition, different fees will apply to acquiring interests in land depending on whether the value is greater or less than NZ$1 million.
A table detailing the full list of fee increases is available on the OIO's website here.
New 'targeted exemptions' will be introduced. There are already a number of class exemptions to the overseas investment regime as well as the ability for the OIO to provide specific exemptions on application. The details of these exemptions will be critical to improving the functioning of the regime and will be subject to substantial scrutiny when released.
Changes will be made to the policy that underpins the overseas investment regime. No further indication was provided in relation to what this may involve. However, the government intends to make these changes before the end of the year.
It is expected that the fees will come into force on 4 July 2016, subject to approval by Cabinet and the Executive Council. Minister for Land Information, Louise Upston, has said that the increases to fees will enable the OIO to increase their staff by up to 25%, which will mean reduced assessment times and improved monitoring and reporting. The announcement does not make any indication of the magnitude of the decrease in assessment times that can be expected following the changes.
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.