In December 2025 the Government passed the Overseas Investment (National Interest Test and Other Matters) Amendment Act updating and amending the Overseas Investment Act 2005 (Act). The reforms took effect on 6 March 2026 alongside a Ministerial Directive Letter (Directive) that was issued, reshaping how the Overseas Investment Office (OIO) administers New Zealand’s screening regime. For investors, this signals a more predictable, efficient pathway for lower-risk or less sensitive assets, with regulatory effort redirected to genuinely higher-risk transactions.
The Act and the Directive aligns with the Government’s “Going for Growth” plan (Plan) aiming to liberalise foreign investment and reduce unnecessary burdens. The Directive emphasises a risk‑based approach, reduced compliance burdens for low‑risk investors and faster processing times, meaning greater clarity, more proportional consent conditions and associated compliance costs for investors.
Policy Direction: A More Liberal, Risk‑Based Regime
The Plan positions overseas investment as a driver of access to markets, technology, and capital, resulting in a more productive economy. The Act’s revised purpose statement reflects this; streamlining consents through a national interest risk assessment, while acknowledging the privilege for overseas investors to own or control sensitive New Zealand assets.
The reforms under the Act sharpen the focus on genuinely sensitive transactions. Routine, low-risk deals should move quickly, while assets linked to national security, critical infrastructure or sensitive data will attract deeper scrutiny. The OIO is directed to minimise compliance costs, impose obligations no broader than necessary to fulfil statutory functions, and prioritise resources toward higher‑risk applications.
National Interest Test: Three‑Stage Framework
The amendments to the Act consolidate the previous tests into a single national interest test for most assets (other than farmland, fishing quota and residential land which continue under the existing pathways). The three stages are:
- Risk Identification Stage: Determines whether a national interest assessment is required. Most transactions should pass through quickly unless there is a credible national interest concern.
- Risk Assessment Stage: Considers whether foreign ownership or control of the asset could pose a material risk, particularly relating to national security, critical infrastructure, sensitive data, or strategically important businesses.
- Ministerial Decision: The Minister may decline transactions that are contrary to the national interest.
Qualifying Investor Visa Holders
The reforms under the Act now permit investors holding Active Investor Plus and Investor 1 or 2 residence visas, to purchase or build residential property in New Zealand valued at over NZ$5 million, with OIO consent. Given the low-risk nature of these acquisitions the Directive expects the OIO to quickly consent these transactions. Where a transaction involves construction of a new residential dwelling, any consent conditions must be no broader than necessary to ensure compliance with statutory requirements.
Investor Risk: When Additional Scrutiny Applies
Under the Act, investor‑specific risk factors form part of the non-mandatory considerations in a national interest assessment. When deciding whether to assess an investor, the OIO may consider both the risk that the transaction could pose to the national interest, including national security or public order, and whether this can be managed through other regulatory regimes. As part of evaluating investor risk factors, consideration should be given as to whether the asset could be used in a way that is contrary to national interest. Assessments may be streamlined for New Zealand‑domiciled entities with a positive track record and strong regulatory compliance history, and heightened scrutiny may be applied for opaque or complex overseas structures.
Benefit to New Zealand: Targeted Assessment and Proportionate Conditions
The Directive clarifies that when applying the benefit to New Zealand test under the Act, the OIO, should recognise that:
- strong benefits in one or two factors may reduce the need for extensive assessment across all other factors, if the threshold is clearly met without reference to them; and
- any conditions imposed should be narrowly tailored and should not duplicate obligations already imposed under other domestic regimes.
A reduced level of verification of investor claims in low-risk cases is identified as the appropriate risk based approach, with reliance on the information provided (unless there is a reason to question it). This approach will particularly benefit investors who supply clear and readily verifiable information.
Guidelines to Investors
The Directive emphasises the importance of upfront guidance to improve regulatory certainty and encourage investment. Where international investment supports Government priorities, such as increasing grocery sector competition, the regulator is expected to work with relevant agencies to develop guidance outlining how the Act applies to particular classes of investment, the information required from investors, and likely consent conditions.
Timeframes
The Directive sets stronger performance expectations. It expects the OIO to process 80% of Stage One (national interest) assessments within five working days, substantially shorter than the statutory 15 working day period, and to complete 80% of consent applications (with specific exclusions) within half of the statutory timeframes specified in the regulations. It must report annually on its performance against these standards, including separate reporting for “one home to live-in” consents.
Industry‑Specific Directions
Grocery Sector Investments
Approvals should be streamlined, longer standing consents granted where appropriate, and coordination with other regulatory agencies to facilitate competition and reduce barriers within the sector.
Forestry Transactions
Transactions involving land already used exclusively or near‑exclusively for forestry activities now fall under the national interest test. Conditions will typically ensure continued forestry use, non‑occupation, appropriate harvesting and replanting, and compliance with existing obligations.
The Directive allows certain forestry‑related conditions to be waived where they are imposed elsewhere, where the investor lacks sufficient ownership or control, or where converting the land to less intensive or permanent forestry is appropriate.
Fresh and Seawater Areas
Crown acquisition of fresh or seawater interests must consider fiscal constraints and resources should be focussed on significant and high-value areas, with acquisition decisions notified within six months.
Conclusion
The Act and the OIO guidance under the Directive represents a reform of the overseas investment regime toward efficiency, proportionality, and clarity. For foreign investors, particularly those investing in low‑risk assets or priority sectors, the simplified pathways and improved processing expectations should reduce delays and costs and support more confident planning.
Hesketh Henry regularly assists offshore clients (including large corporates and individual investors) with investment applications to the OIO. If you have any questions about investing in New Zealand or any other matter please get in touch with our Foreign Investment team, or your usual contact at Hesketh Henry.
Disclaimer: The information contained in this article is current at the date of publishing and is of a general nature. It should be used as a guide only and not as a substitute for obtaining legal advice. Specific legal advice should be sought where required.
