Overseas Investment Amendment Bill

  • enacted
11 New sections 16E to 16G inserted

After section 16, insert:

16E Benefit to New Zealand test
General test

(1)

The benefit to New Zealand test is met if all of the following are met:

(a)

the overseas investment will, or is likely to, benefit New Zealand (or any part of it or group of New Zealanders), as determined by the relevant Ministers under section 17; and

(b)

if the relevant land is or includes non-urban land that, in area (either alone or together with any associated land) exceeds 5 hectares, the relevant Ministers determine that that benefit will be, or is likely to be, substantial and identifiable; and

(c)

if the relevant land is or includes residential land, the relevant Ministers are satisfied that the conditions that the relevant Ministers will impose on the consent in accordance with section 16F will be, or are likely to be, met.

(2)

Subsection (3) applies if the relevant Ministers are satisfied—

(a)

that the relevant land will be, or is likely to be, used exclusively, or nearly exclusively, for forestry activities; and

(b)

that—

(i)

the relevant land is not residential land only; and

(ii)

if the relevant land includes any residential land, the residential land adjoins other land that is included in the relevant land but is not residential land; and

(c)

that the relevant land will not be, or is not likely to be, used, or held for future use, for any residential purposes, except where—

(i)

accommodation is being provided for the purpose only of supporting forestry activities being carried out on the relevant land; and

(ii)

all buildings being used for that accommodation are located on land on which some or all of those forestry activities are being carried out or on land that adjoins land on which some or all of those forestry activities are being carried out; and

(d)

that, whenever a crop of trees is harvested on the relevant land, a new crop will be, or is likely to be, established on the relevant land to replace the crop that is harvested (subject to subsection (7)).

(3)

For the purposes of subsection (1)(a) and (b), the relevant Ministers may assess the benefit to New Zealand (or any part of it or group of New Zealanders) by comparing the expected result of the overseas investment with what is expected to happen in relation to the relevant land if—

(a)

the overseas investment is not given effect to; and

(b)

there were to be no future changes to the ownership or control (direct or indirect) of—

(i)

interests in the relevant land; or

(ii)

rights or interests in securities of persons who own or control (directly or indirectly) interests in the relevant land.

Special test relating to forestry activities

(4)

Regulations may provide that the benefit to New Zealand test is also met if the relevant Ministers are satisfied—

(a)

that the relevant land will be, or is likely to be, used exclusively, or nearly exclusively, for forestry activities; and

(b)

that—

(i)

the relevant land is not residential land only; and

(ii)

if the relevant land includes any residential land, the residential land adjoins other land that is included in the relevant land but is not residential land; and

(c)

that the relevant land will not be, or is not likely to be, used, or held for future use, for any residential purposes, except where—

(i)

accommodation is being provided for the purpose only of supporting forestry activities being carried out on the relevant land; and

(ii)

all buildings being used for that accommodation are located on land on which some or all of those forestry activities are being carried out or on land that adjoins land on which some or all of those forestry activities are being carried out; and

(d)

that any requirements set out in regulations in accordance with subsection (5) will be, or are likely to be, met (subject to subsection (8)); and

(e)

that, whenever a crop of trees is harvested on the relevant land, a new crop will be, or is likely to be, established on the relevant land to replace the crop that is harvested (subject to subsection (7)); and

(f)

if the relevant land is or includes special land and regulations require the special land, or any part of it, to be offered to the Crown, that the special land, or the part of it, has been offered to the Crown in accordance with regulations; and

(g)

that any other requirements set out in regulations are met.

(5)

Regulations may, for the purposes of subsection (4)(d), set out requirements that must be met after the overseas investment is given effect to, including the times at or by which, or the periods throughout which, the requirements must be met.

(5)

Regulations may, for the purposes of subsection (4)(d), set out requirements that must be met after the overseas investment is given effect to.

(6)

Requirements set out in regulations for the purposes of subsection (4)(d) may (without limitation) be about 1 or more of the following:

(a)

activities that must, or must not, be carried out on the relevant land:

(b)

the maintenance or protection of things that exist when the transaction from which the overseas investment results is entered into (including (without limitation) requirements about maintaining any existing historic heritage, biodiversity, environmental, or public access commitments or existing commitments relating to the supply of logs):

(b)

the maintenance or protection of things that exist when or before the overseas investment transaction is entered into (including (without limitation) the maintenance of existing arrangements relating to historic heritage, biodiversity, environmental matters, public access, or the supply of logs):

(c)

outcomes that must result from the overseas investment.

Powers not to apply, or to modify, certain requirements

(7)

The relevant Ministers may decide—

(a)

not to apply the requirement set out in subsection (2)(d) or (4)(e) if satisfied that the relevant overseas person (together with the relevant overseas person’s associates) will not have sufficient ownership or control (direct or indirect) of rights in respect of the relevant land to ensure that the requirement will be met:

(b)

to modify the requirement set out in subsection (2)(d) or (4)(e) by not applying the requirement for a part of the relevant land if satisfied that the relevant overseas person (together with the relevant overseas person’s associates) will not have sufficient ownership or control (direct or indirect) of rights in respect of that part of the relevant land to ensure that the requirement will be met for that part of the relevant land.

(8)

The relevant Ministers may decide not to apply, or may modify, any requirement set out in regulations for the purposes of subsection (4)(d) if satisfied that the relevant overseas person (together with the relevant overseas person’s associates) will not have sufficient ownership or control (direct or indirect) of rights in respect of the relevant land to ensure that the requirement will be met.

Definitions

(9)

In this section,—

adjoins includes separated only by a public road (including a motorway or a State highway, and whether or not the road is formed)

forestry activities means any of the following:

(a)

maintaining a crop of trees:

(b)

harvesting a crop of trees:

(c)

establishing a crop of trees

special land means foreshore or seabed or a bed of a river or lake.

16F Conditions for consents relating to sensitive land that is residential land: benefit to New Zealand test

(1)

This section applies if an application for consent for an overseas investment in sensitive land is being considered under the benefit to New Zealand test and the relevant land is or includes residential land.

(1A)

However, this section does not apply where section 16E(3) is being applied or the application is being considered in accordance with section 16E(4) (see instead section 16G).

(2)

If consent is granted, to the extent that the consent relates to the residential land,—

(a)

the relevant Ministers must determine a residential land outcome listed in the table in clause 19 of Schedule 2 as applying to the residential land; and

(b)

the consent must be made subject to the set of conditions for the residential land outcome, subject to any exemptions applying (in each case, as described in the table).

(3)

Consent may be granted on the basis of different residential land outcomes applying for different parts of the residential land (with different sets of conditions imposed for different parts).

Example

A is an overseas person who wants to buy 100% of the shares in what is currently a 100% New Zealand-owned and -controlled company.

The company owns the following sensitive land (and has no other interests in sensitive land):

  • 40 hectares of non-urban (non-residential) land: non-urban land (that is not residential land):

  • residential land where 2 houses are being constructed.

No part of the land is, or will be, used for forestry activities.

Criteria for consent

Because the relevant land is a mix of sensitive (but not residential) land and residential land, section 16(1)(e) applies and (in addition to the other criteria in section 16(1) that apply) the benefit to New Zealand test must be met in relation to all of the relevant land.

Residential land outcomes

Because the relevant land includes residential land, section 16E(1)(c) applies.

A wants to complete and sell one of the houses and live in the other house. A’s application for consent proposes the following residential land outcomes (from the table in clause 19 of Schedule 2) for the residential land:

  • occupation as a main home or residence (on the basis that the commitment to reside in New Zealand test will be met in respect of part of the residential land):

  • increased residential dwellings (for the remaining part of the residential land).

Required conditions

If consent is granted, each part of the residential land will be covered by a set of conditions (see clause 19 of Schedule 2) for the residential land outcomes that the relevant Ministers determine apply.

(See also sections 25A and 25B, in relation to the imposition of conditions generally.)

16G Conditions for consents relating to sensitive land that will be used for forestry activities

(1)

Subsection (2) applies if an application for consent for an overseas investment in sensitive land is being considered under the benefit to New Zealand test and section 16E(3) is being applied.

(2)

If granted, the consent must be made subject to conditions for the purpose of ensuring that the following requirements will be met:

(a)

the requirements set out in section 16E(2)(a) and (c):

(b)

the requirement set out in section 16E(2)(d), subject to section 16E(7).

(3)

Subsection (4) applies if an application for consent for an overseas investment in sensitive land is being considered under the benefit to New Zealand test in accordance with section 16E(4).

(4)

If granted, the consent must be made subject to conditions for the purpose of ensuring that the following requirements will be met:

(a)

the requirements set out in section 16E(4)(a) and (c):

(b)

the requirements set out in regulations made for the purposes of section 16E(4)(d), subject to section 16E(8):

(c)

the requirement set out in section 16E(4)(e), subject to section 16E(7).

(5)

A condition imposed in relation to the requirement set out in section 16E(2)(d) or (4)(e) may require the replacement of a crop of trees that is harvested to be on a like-for-like basis or on any similar basis.