18A Investor test
Purpose

(1)

The purpose of the investor test is to determine whether investors are unsuitable to own or control any sensitive New Zealand assets, by assessing whether they are likely to pose risks to New Zealand, based on factors relating to their character and capability.

When investor test is met

(2)

The investor test is met in respect of an overseas investment if the relevant Ministers are satisfied that all of the following persons (investors), excluding persons who are not overseas persons, meet the investor test:

(a)

the relevant overseas person; and

(b)

all the individuals with control of the relevant overseas person, to the extent that the relevant overseas person is not an individual.

(3)

The investor test is met in respect of an investor (A) if the relevant Ministers are satisfied that—

(a)

none of the investor test factors are established; or

(b)

any investor test factor or factors that are established do not make A unsuitable to own or control any sensitive New Zealand assets.

Investor test factors

(4)

The investor test factors are—

Character

(a)

the following, whether in New Zealand or any other jurisdiction:

(i)

whether A has, at any time, been convicted of an offence for which A has been sentenced to imprisonment for a term of 5 years or more, or for an indeterminate period capable of running for 5 years or more:

(ii)

whether A has, at any time in the preceding 10 years, been convicted of an offence for which A has been sentenced to imprisonment for a term of 12 months or more, or for an indeterminate period capable of running for 12 months or more:

(iii)

if A is not an individual, whether A has, at any time in the preceding 10 years, been convicted of an offence for which A has been sentenced to pay a fine:

(iv)

whether A has been ordered, in the preceding 10 years, by a court, any other court in New Zealand, or any equivalent body overseas to pay a civil pecuniary penalty in respect of a contravention of any enactment:

(v)

whether, at any time in the preceding 10 years, a court has imposed a penalty on A for a contravention of this Act or the regulations:

(vi)

whether any other proceedings have been begun against A, and have not been completed, for any offence, or contravention of an enactment, that carries a penalty corresponding to those listed in subparagraphs (i) to (v):

(vii)

whether A has entered, in the preceding 10 years, into an enforceable undertaking or an equivalent agreement with any regulator in respect of any contravention or alleged contravention of any enactment:

(b)

whether A is an individual of a kind referred to in section 16 of the Immigration Act 2009 (certain persons not eligible for visas or entry permission under that Act):

Capability

(c)

whether A is a person prohibited from being a director or promoter of, or concerned in the management of, an incorporated or unincorporated body under the Companies Act 1993, the Financial Markets Conduct Act 2013, or the Takeovers Act 1993:

(d)

whether A is a person subject to a management banning order under the Financial Markets Conduct Act 2013 or the Takeovers Act 1993 or is subject to an order under section 108 of the Credit Contracts and Consumer Finance Act 2003:

(e)

whether A has become liable, in the preceding 10 years, to pay a penalty in respect of any of the following:

(i)

an abusive tax position under section 141D of the Tax Administration Act 1994 or an equivalent enactment in another jurisdiction:

(ii)

evasion or a similar act under section 141E of the Tax Administration Act 1994 or an equivalent enactment in another jurisdiction:

(f)

whether A, at the date on which the application is made, has outstanding unpaid tax of $5 million or more due and payable in New Zealand or an equivalent amount due and payable in another jurisdiction (where the amount is converted into New Zealand currency by applying the close of trading spot exchange rate on the date or dates on which the tax became due and payable).

(5)

For the purposes of this section,—

(a)

enactment means an enactment that is or was part of the law of New Zealand or of any other jurisdiction:

(b)

preceding 10 years means the period of 10 years ending with the date of application:

(c)

tax includes any interest or penalty imposed in respect of any tax (in New Zealand or another jurisdiction):

(d)

section 15(2) of the Immigration Act 2009 applies to subsection (4)(a) in the same way as it applies to section 15(1)(a) and (b) of that Act:

(e)

an individual is not an individual of a kind referred to in section 16 of the Immigration Act 2009 if a special direction referred to in section 17(1)(a) of that Act has been made permitting a visa or entry permission to be granted to that individual.

Section 18A: inserted, on 22 March 2021, by section 15 of the Overseas Investment (Urgent Measures) Amendment Act 2020 (2020 No 21).