Our German Desk
Yesterday, the Prime Minister Rt Hon Christopher Luxon announced the Government’s plan to establish a new foreign investment agency, as part of his ‘State of the Nation’ speech in Auckland. We recap some of the key points of the Prime Minister’s announcement.
What is Invest New Zealand
Invest New Zealand is a new agency which will initially operate within the New Zealand Trade and Enterprise (NZTE) development agency before becoming its own Autonomous Crown Entity. It will report to the Minister of Trade and Investment. While NZTE will be refocused with a single mandate of boosting exports and growing international markets, Invest NZ will focus on:
- Attracting foreign direct investment (FDI) into “high-potential sectors” with the aim of boosting productivity and innovation;
- Streamlining processes to increase capital available to invest in new projects and enterprises. Of particular interest is investment into banking, financial technology, critical infrastructure (including roading and energy projects) and manufacturing all with the aim of achieving private sector growth;
- Increasing research and development investment in New Zealand by multinational companies;
- Encouraging skilled professionals to enhance domestic capabilities and global connections.
Why has the Government announced this?
Encouraging more FDI into New Zealand has been a focus point for the Government. The OECD FDI Regulatory Restrictiveness Index ranks New Zealand as having the most restrictive FDI policy in the OECD. While the Government has committed to reforming the Overseas Investment Act to remedy this, the Prime Minister stated in his announcement that “solving legal barriers isn’t enough”.
The establishment of Invest NZ is modelled off similar agencies in Ireland and Singapore. Invest NZ is to offer tailored support to foreign investors with the aim of coupling investment to high potential industries. It does so in part by styling itself as a ‘one-stop-shop’ for FDI. Minister for Trade and Investment, Hon Todd McClay, has described Invest NZ as the “welcome mat to the world” and has stated that Invest NZ will assist with “supporting investors as they navigate our legal and commercial landscapes”.
Further detail to come
The formation of Invest NZ, alongside expected Overseas Investment Act reform, signals a continued push to lower barriers to foreign investment and attract international capital into New Zealand. Our Foreign Investment Team will be following developments closely.
Flynn Struckmann (summer clerk) co-authored this article.
