2023 Investment Climate Statements: New Zealand

Policies Towards Foreign Direct Investment

New Zealand has an open and transparent economy. Foreign investment is generally encouraged without discrimination. Some restrictions do apply in a few areas of critical interest including certain types of land, significant business assets, and fishing quotas. These restrictions are facilitated by a screening process.

Foreign investors – following the screening process – are treated equally to domestic investors. The country has a well-developed legal framework and regulatory system. The judicial system is effective in enforcing contractual law.

Crown entity New Zealand Trade & Enterprise (NZTE) is New Zealand’s primary investment promotion agency with global offices. The NZTE helps investors develop investment plans, access opportunities, and facilitate connections with private sector advisors based in New Zealand. They also offer ongoing support once an investment has been made. https://www.nzte.govt.nz/investment-and-funding/how-we-help .

The country prioritizes long-term investment. The Commerce Commission, through the Ombudsman New Zealand, enforces competition, fair trading, and consumer contracts.

The New Zealand-United States Council, established in 2001, is a non-partisan organization funded by business and the government. It fosters a strong and mutually beneficial relationship between New Zealand and the United States through both government-to-government contacts, and business-to-business links. The American Chamber of Commerce in Auckland provides a platform for New Zealand and U.S. businesses to network among themselves and with government agencies. To visit Council’s and the Chamber’s websites, please visit:
https://www.nzuscouncil.org/ 
https://www.amcham.co.nz/ 

Limits on Foreign Control and Right to Private Ownership and Establishment

Foreign and domestic private entities are free to own business enterprises and engage in remunerative activity.

The New Zealand government does not discriminate against U.S. or other foreign investors in their rights to establish and own business enterprises. It has placed separate limitations on foreign ownership of strategic businesses, such as airline Air New Zealand and telecommunications infrastructure provider Chorus Limited. In 2021, the government made changes to its foreign investment regime by streamlining the screening process undertaken by the Overseas Investment Office:

• The “national interest test” is now applied at a threshold of 25 percent for foreign government investment into New Zealand (with additional exceptions)
• “Repeat” investors who have previously passed the country’s screening test will allow investors to be pre-verified.
• Foreigners who wish to acquire “sensitive” land must satisfy a relevant Minister’s assessment that the acquisition will provide long-term benefit to New Zealand.
• The OIO also screens for Strategically Important Businesses and Significant Business Assets, both of which can trigger additional due diligence in cases of greater than 25 percent ownership of a New Zealand asset, or an investment in excess of NZD 100 million.

For more information about New Zealand’s foreign investment policy and national interest test: https://www.treasury.govt.nz/sites/default/files/2021-06/for-invest-pol-nat-interest-guidance-jun21.pdf
While waivers are granted, in some cases for investment of “significant economic value,” they are limited and subject to a technical, bespoke process that requires direct contact with the OIO: https://www.linz.govt.nz/overseas-investment/contact 
Having streamlined the foreign investment process in 2021, there were no significant additional changes in 2022.

Other Investment Policy Reviews:

The 2022 OECD Economic Survey of New Zealand offered key recommendations, including warnings about potential economic shocks, including new COVID variants, a disorderly housing market correction, or a natural disaster. https://www.oecd.org/economy/surveys/New%20Zealand-2022-OECD-economic-survey-overview.pdf

The WTO Trade Policy Review, published in June 2022, highlighted the Ministry of Foreign Affairs Trade for All Agenda, which supports inclusive trade policies for New Zealanders, along with the country’s Trade Recovery Strategy that focuses on broadening support for exporters and acknowledges the need for diversification.
https://www.wto.org/english/tratop_e/tpr_e/tp526_crc_e.htm 

In 2020, the UN Special Rapporteur called on New Zealand for a human rights-focused approach to its housing crisis, referring to it as a “significant human rights crisis.” In December 2022, New Zealand’s Human Rights Commission voiced grave concerns about children in emergency housing to the United Nations Committee on the Rights of the Child.

In 2022, the NZUS Council, along with economics consultancy Sense Partners, produced a report on New Zealand’s bilateral trade relationship with the United States. The report highlighted an increasingly important trade relationship in the services sector (e.g., computer services, gaming); the United States is now New Zealand’s largest services export market. The report’s key finding is that the bilateral relationship is strong with ample room for future growth. To read the report, please visit: https://www.nzuscouncil.org/wp-content/uploads/2022/03/REPORT-NZUS-trade-relationship-Stability-and-diversity-in-a-time-of-change.pdf

Business Facilitation

The New Zealand government has shown a strong commitment to business facilitation. There are no restrictions on the movement of funds into or out of the country. Overseas investors are required to adhere to legislation that applies equally across domestic businesses. The global trend to tighten anti-money laundering laws has increased the reporting requirements of the banking sector. To prevent the increasing use of New Zealand-based shell companies for illegal activities, legislation was introduced in 2014 that requires a New Zealander to serve as company director. For more information: https://www.legislation.govt.nz/act/public/2014/0046/latest/DLM4094913.html 

The Companies Office maintains a business registry of publicly available information on company directors. The website is accessed by creditors and those interested in doing business with the company or its directors. Registration is completed online. Those registering a new company typically register with the Companies Office, along with the Inland Revenue Department (IRD): https://companies-register.companiesoffice.govt.nz/ 
https://www.ird.govt.nz/ 

The New Zealand Business Number (NZBN) Act 2016 allocates unique identifiers to eligible businesses to allow them to conduct business efficiently. Tax registration is required if a company is an employer or if the company pays the Goods and Services Tax (GST), which is currently 15 percent. The threshold for GST registration is NZD 60,000 (USD 42,000) of turnover over a one-year period. For more information about New Zealand and taxation, including the 2016 extension of GST registration to overseas suppliers of “remote services” to New Zealanders, please visit: https://www.ird.govt.nz/gst/registering-for-gst 

The New Zealand government does not place restrictions on New Zealand citizens or companies investing abroad.

Along with NZTE’s efforts to support exporters, the Ministry of Foreign Affairs and Trade (MFAT) and Customs New Zealand each operates business outreach programs that advise businesses on how to maximize the benefit from FTAs to improve the competitiveness of their goods offshore.

Transparency of the Regulatory System

The New Zealand government creates transparent policies and effective laws that foster market-based competition on a non-discriminatory basis. Laws governing competition are consistent and transparent and establish “clear rules of the game.” The Treaty of Waitangi – New Zealand’s founding document that commits to protect the indigenous Māori culture and to enable Māori to live in New Zealand as Māori – serves as a basis to much public policy in the country. For more information on Treaty principles, please visit:
https://www.mbie.govt.nz/business-and-employment/employment-and-skills/employment-strategy/maori-employment-action-plan/te-tiriti-principles/ 

The New Zealand government does not discriminate against U.S. or other foreign investors. Regulations are overseen by the Ministry of Business, Innovation, and Employment (MBIE), a government department responsible for 17 regulatory systems that cover about 140 statutes. Standards are developed through Standards NZ and are set in coordination with Australia. For more information about regulations, including the Overseas Investment Regulatory System, please visit: https://www.treasury.govt.nz/information-and-services/regulation 

Accounting standards are issued by the New Zealand Accounting Standards Board, which fully adheres to international standard. For more information about foreign companies whose securities are publicly traded in New Zealand: https://www.ifrs.org/use-around-the-world/use-of-ifrs-standards-by-jurisdiction/view-jurisdiction/new-zealand/ 

From January 1, 2023, legislation will make climate-related disclosures mandatory for financial institutions with assets greater than NZD 1 billion (USD 650 million) to report the expected impact of climate change on businesses, such as how they will manage climate risks.

Draft bills and regulations, including those relating to FTAs and investment law, are generally made available for public comment through a public consultation process. There have been some criticisms of the New Zealand government occasionally choosing to follow a “truncated” or shortened public consultation process or adding a substantive legislative change after public consultation. While regulations are not in a centralized location in a form similar to the United States Federal Register, the New Zealand government requires the major regulatory departments to publish an annual regulatory stewardship strategy.

The Regulatory Quality Team within the New Zealand Treasury is responsible for the strategic coordination of the Government’s regulatory management system. Treasury exercises stewardship over the regulatory management system to maintain and enhance the quality of government-initiated regulation. New Zealand’s major regulatory departments are the Department of Internal Affairs, IRD, MBIE, Ministry for the Environment, Ministry of Justice, the Ministry for Primary Industries, the Ministry of Transport, and the Financial Markets Authority.

In February 2022, MBIE announced a public consultation process on the occupational regulation regimes of service providers within the construction industry. The consultation proposes further improvements for architects and engineers, construction workers, and electricians and plumbers.

No new regulatory enforcement reforms have been announced since the last ICS. Regulatory reform efforts announced in recent years, such as the 2018 introduction of Regulatory Systems Amendment Bills (RSABs), legislative vehicles used by MBIE and other regulatory agencies to improve regulatory systems. The key thrust of these vehicles is ‘repairs and maintenance’ of existing legislation. For more information on amendments to the regulatory system: https://www.mbie.govt.nz/cross-government-functions/regulatory-stewardship/regulatory-systems-amendment-bills/ 

The general implications of recent reforms, such as the 2019 omnibus RSAB for Economic Development, Workforce, and Housing, are improvements to insolvency, takeovers, trademarks, and limited partnerships. In June 2020, following a consultation process by MBIE, New Zealand’s Cabinet agreed to recommendations to amendments to improve the functionality of the Patents, Trademark, and Design Acts. Amendments are technical in nature and will facilitate best practice in innovation and business.

The Resource Management Act 1991 (RMA) has drawn criticism from foreign and domestic investors as a barrier to investment in New Zealand. The RMA regulates access to natural and physical resources such as land and water. Critics contend that the resource management process mandated by the law is unpredictable, protracted, and subject to undue influence from competitors and lobby groups. Investors have raised concerns that the law is unequally applied between jurisdictions because of the lack of implementing guidelines. Several amendments have attempted to reform the Act, with the latest round of reforms proposed in 2023. While the objectives of the amendments are to reduce complexity and increase productivity, the RMA remains an unpopular and restrictive piece of legislation. For more: https://environment.govt.nz/what-government-is-doing/areas-of-work/rma/resource-management-system-reform/ 

The Covid pandemic encouraged New Zealand’s efforts to boost the digitization of government services. In 2022, the Digital Identity Program was introduced, which aims to incorporate the country’s long-term strategy for a digital public service. The Program offers a regulatory framework that sets out rules for the delivery of digital identity services. For more information, please visit: https://www.digital.govt.nz/digital-government/programmes-and-projects/digital-identity-programme/about-the-digital-identity-programme/ 

The Government of New Zealand is generally transparent about its public finances and debt obligations. The annual budget for the government and its departments publish assumptions and implications of explicit and contingent liabilities on estimated government revenue and spending.

International Regulatory Considerations

As part of the Single Economic Market with Australia, the New Zealand government has introduced laws to enhance regulatory coordination with Australia.

Areas of regulatory coordination include insolvency law, financial reporting, food safety, competition policy, consumer policy and the 2013 Trans-Tasman Court Proceedings and Regulatory Enforcement Treaty, which allows the enforcement of civil judgements between both countries.

New Zealand is a Party to the WTO Agreement on Technical Barriers to Trade (TBT). New Zealand is required to notify other WTO members of proposed technical regulations.

Legal System and Judicial Independence

New Zealand law uses the English common law system. Legislation underpins the legal enforcement of contracts through contract law.

The Contract and Commercial Law Act of 2017 defines contractual and commercial processes. The court system consists of four levels: District (where a large number of civil cases are heard), High Court (where the amount in dispute is in excess of NZD $350,000), the Court of Appeal, and the Supreme Court. Specialty courts include Employment, Environment, and the Māori Land Court, as well as the Waitangi Tribunal (ruling on matters related to the Treaty of Waitangi), the Coroners Court, and the Courts Martial Appeal Court.

The judicial system is independent of the executive branch and is generally transparent and effective in enforcing property and contractual rights. New Zealand has well-defined and consistently applied commercial and bankruptcy laws. Arbitration is a widely-used dispute resolution mechanism. Regulations and enforcement actions are appealable and adjudicated in the national court system.

Laws and Regulations on Foreign Direct Investment

Foreign investment is an important source of financing for New Zealand. The Overseas Investment Act (OIA) is the principal tool for regulating foreign investment. Under the OIA is the Overseas Investment Office (OIO), a dedicated unit that screens overseas investments for sensitivity.

In 2020, the OIA underwent a series of reforms that essentially restricted real estate investment by non-citizens, though measures were also introduced to reduce the regulatory burden of the investment screening process for inward foreign investment. In August 2022, in response to calls from the private sector to remove the forestry exemption from the OIA, the government passed legislation removing forestry conversions from the special forestry test under the Act.

For more, please visit Land Information New Zealand, a website with information on foreigners investing in overseas assets and how “sensitive New Zealand assets” are defined:
https://www.linz.govt.nz/guidance/overseas-investment 
https://www.linz.govt.nz/our-work/overseas-investment-regulation 

Competition and Antitrust Laws

The Commerce Commission reviews transactions and conduct for competition-related concerns. In 2020, the Commerce Commission signed a multilateral assistance and cooperation framework to enhance international cooperation on competition enforcement with Australia, Canada, the UK, and the United States. For more: https://comcom.govt.nz/news-and-media/media-releases/2020/commerce-commission-signs-multilateral-framework-enhancing-international-cooperation-on-competition-enforcement 

In 2022, the Commerce Amendment Bill was passed, strengthening the prohibition against misuse of market power. The key thrust of the amended legislation is to safeguard section 36 of the Commerce Act, which addresses New Zealand’s anti-monopolization prohibition and had previously been difficult to enforce. The Amendment also repeals safe harbor provisions protecting some IP arrangements from competition law scrutiny.

The Commission adheres to fair and transparent norms and procedures.

The Commission’s decisions can be appealed to the courts.

Expropriation and Compensation

Expropriation is generally not an issue in New Zealand, and there are no outstanding cases.

Under the Public Works Act 1981, the New Zealand government can force landowners to sell in order to facilitate public works projects. There is little public dissent over the issue; New Zealanders are generally satisfied with the Act’s provisions for fair market value compensation, although there have been high-profile disputes over sacred Māori land that have been litigated in court. For more information: https://www.linz.govt.nz/guidance/crown-property/acquisitions-public-works 

In August 2020, the Urban Development Act (UDA) was passed into law. The Act established powers for Kainga Ora, a newly created Crown Agency that provides rental housing for families in need and facilitates urban development through residential building projects. Under the UDA, compulsory acquisition powers were created for Kainga Ora, who can theoretically make a forced acquisition of residential land after meeting critical thresholds, such as the establishment of a Special Development Project process that has government oversight. For more information: https://www.legislation.govt.nz/act/public/2020/0042/latest/whole.html 

To date, there have been no cases involving compulsory acquisition of residential property, nor has the issue been of great concern.

Dispute Settlement

ICSID Convention and New York Convention

New Zealand is a party to the ICSID (Washington) Convention and to the New York Convention of 1958 on the Recognition and Enforcement of Foreign Arbitral Awards.

Arbitrations taking place in New Zealand (including international arbitrations) are governed by the Arbitration Act 1996. The Arbitration Act includes rules based on the United Nations Commission on International Trade Law (UNCITRAL) and its 2006 amendments.

Investor-State Dispute Settlement

Although there is no ISDS agreement built into New Zealand’s RCEP, NZ-UK, or NZ-EU free trade agreements, the country has signed side letters with five CPTPP partner countries that will exclude compulsory ISDS settlement. The side letters have the same treaty-level status as the CPTPP Agreement.

New Zealand does not have a free trade agreement with the United States. New Zealand does not have a Bilateral Investment Treaty with the United States.

Investment disputes are rare, and there have been no major disputes in recent years involving U.S. companies. In 2022, following a complaint lodged by the Digital News Publishers Association against Meta to pay local news outlets for content, the Commerce Commission found in favor of collective bargaining rights.

International Commercial Arbitration and Foreign Courts

Arbitrations taking place in New Zealand (including international arbitrations) are governed by the Arbitration Act 1996. The Arbitration Act includes rules based on the United Nations Commission on International Trade Law (UNCITRAL) and its 2006 amendments. Parties to an international arbitration can opt out of some of the rules, but the Arbitration Act provides the default position.

The New Zealand Dispute Resolution Centre (NZDRC) is the leading independent, nationwide provider of private commercial, family and relationship dispute resolution services in New Zealand. It also provides international dispute resolution services through its related entity, the New Zealand International Arbitration Centre (NZIAC). The NZDRC is willing to act as an appointing authority, as is the Arbitrators’ and Mediators’ Association of New Zealand (AMINZ).

New Zealand courts support a general presumption in favor of the enforcement of foreign arbitral awards. Forms of dispute resolution available in New Zealand include formal negotiations, mediation, expert determination, court proceedings, arbitration, or a combination of these methods.

There are currently no publicly reported cases of SOEs involved in investment disputes. New Zealand SOEs are set up to operate on a level playing field with privately owned companies and are subject to domestic competition laws.

Bankruptcy Regulations

Bankruptcy is addressed in the Insolvency Act 2006, the Receiverships Act 1993, and the Companies Act 1993. New Zealand bankruptcies are subject to conditions on borrowing and international travel, and violations are considered offences and punishable by law. The registration system operated by the Companies Office within MBIE, is designed to enable New Zealand creditors to sue an overseas company in New Zealand, rather than forcing them to sue in the country’s home jurisdiction. An overseas company’s assets in New Zealand can be liquidated for the benefit of creditors. Under insolvency provisions of the Companies Act 1993, subcontractors have rights as unsecured creditors.

Investment Incentives

New Zealand has no specific economic incentive regime because of its free trade policy. The New Zealand government, through its bodies such as Tourism New Zealand and NZTE, assists certain sectors such as tourism and the export of locally manufactured goods. Through Business.Govt.NZ, an agency in association with MBIE, NZTE, and Callaghan Innovation, targeted support is offered for underrepresented investors such as Māori. For more information about grants and funding or mentoring, see: https://www.business.govt.nz/how-to-grow/getting-government-grants/grants-and-help-for-your-new-business/ 

The government generally does not have a practice of jointly financing—or issuing guarantees—for foreign direct investment projects. It does provide some opportunities and initiatives for foreign investors to apply for joint financing if the projects involve R&D, science, or innovation that will benefit the economy.

The government encourages businesses to switch from fossil fuels to cleaner power to fuel their industry.  In October 2021, the government announced 23 new projects that will receive government co-investment from Round Two of the Government Investment in Decarbonizing Industry (GIDI) Fund.  The approved projects cover a range of sectors including meat, dairy, and other food production, as well as timber, energy supply, and chemical manufacturing. All applicants must demonstrate significant economic and employment impact from their projects, have carbon reduction plans, and be ready to complete projects by October 2023.  In August 2022, the government announced the Research and Development Tax Incentive, which supports R&D activity that takes place in-country and is in excess of NZD 1 billion. The incentive provides a 15 percent tax credit for eligible activities, mainly around innovation and aerospace. For more: https://www.rdti.govt.nz/  For more information about R&D grants, visit: https://www.callaghaninnovation.govt.nz/funding/new-rd-grant  .

Foreign Trade Zones/Free Ports/Trade Facilitation

New Zealand does not have any foreign trade zones or duty-free ports. New Zealand does not have any Special Economic Zones, although the government asked MBIE to investigate the possibility in 2017.

Performance and Data Localization Requirements

New Zealand does not follow a policy of forced localization. New Zealand supports the ability to transfer data across borders, and does not force businesses to store their data within any particular jurisdiction.

There are no government-mandated requirements for company performance or local employment, and foreign investors that do not require OIO approval are treated equally with domestic investors. The government does not maintain any measures that violate the Trade Related Investment Measures text in the WTO.

New Zealand does not have any requirements for foreign information technology providers to turn over source code or provide access to encryption, although there may be obligations on individuals to assist authorities under Section 130 of the Search and Surveillance Act 2012. In 2023, this Act will be reviewed as part of the Government’s response to Royal Commission of Inquiry into the 2019 terror attack on the Christchurch mosques.

In 2020, the newly amended Privacy Act 2020 came into force. The Act includes a new Information Privacy Principle that lays out rules about international data transfers are treated, such that consent of the individual is paramount. The Privacy Act gives the Privacy Commissioner broad authority to prohibit cross-border transfers of personal information outside of the country if the recipient country does not provide legal safeguards for the data.

The Act addresses data storage requirements. It is administered by the Ministry of Justice and regulated by the Office of the Privacy Commissioner. In 2016, the Government Cloud Programme addressed a lack of major cloud providers by supporting the use of cloud technologies, which led to offshoring. Due to challenges by indigenous groups around how indigenous Māori data sovereignty is treated, the government is reviewing the cloud-first policy. For more information about how the indigenous are working with the government to safeguard Māori data rights, visit: https://tewhata.io/about/ 

Real Property

New Zealand recognizes and enforces secured interest in property. Property rights and interests are enforced regardless of gender. Mortgages are widely available, and liens are used as security. The recording system is reliable.

Land leasing by foreign or non-resident investors is governed by the OIO Act. Investors are generally required to report annually to the OIO for up to five years from consent, but if benefits are expected to occur after that five-year period, monitoring will reflect the time span within which benefits will occur. Failure to meet obligations under the investors’ consent can result in fines, court orders, or forced disposal of their investment.

About eight percent of New Zealand land is owned by the Crown. There are several types of land ownership in New Zealand: freehold title, leasehold, unit title, strata title, and cross-lease. Most of the land in New Zealand is freehold, also referred to as “fee simple,” or absolute ownership of the land and anything built on it. Prior to purchasing property or land in New Zealand, prospective buyers are encouraged to perform due diligence by accessing a report from Land Information New Zealand (LINZ): https://www.linz.govt.nz/ 

Unoccupied, legally purchased property has historically been subject to adverse possession, a legal method allowing squatters to take ownership of a property after 20 continuous years of occupation. The method, a narrow exception to a legal principle under the Land Transfer Amendment Act of 1963, has been used in more than 200 applications since 1993. The Act was repealed in 2017 and replaced with the Land Transfer Act, which still provides for some squatters’ rights. More information on the Land Transfer Act 2017 can be found here:
https://www.linz.govt.nz/land/land-registration/land-transfer-act-2017 

Intellectual Property Rights

New Zealand is not listed in USTR’s Special 301 report. It is not mentioned in the Review of Notorious Markets for Counterfeiting and Piracy.

New Zealand has a strong record on intellectual property rights (IPR) protection and is an active participant in international efforts to strengthen IPR enforcement globally. In 1984, New Zealand joined the World Intellectual Property Organization (WIPO) and is a member of a multitude of WIPO bodies and treaties. New Zealand participates in the Trade Related Aspects of Intellectual Property Rights (TRIPS) Council. The Intellectual Property Office of New Zealand (IPONZ) assists those whose copyright has been infringed upon. There are both civil and criminal enforcement options. These options are administered through a variety of agencies, including MBIE and the Customs Service. Though there have been isolated incidents of IP theft, it is uncommon. https://www.iponz.govt.nz/about-ip/copyright/enforcing-copyright/ 

In 2022, under the terms of the EU-NZ free trade agreement, New Zealand extended its copyright term from 50 years to 70 years, bringing its regulations into line with those of the EU. Since 2018, the government has been reviewing the Copyright Act 1994. While this process is still ongoing, the main objective is to ensure New Zealand’s copyright laws and regulations are fit for purpose in a rapidly changing technological environment. For more:
https://www.mbie.govt.nz/business-and-employment/business/intellectual-property/copyright/review-of-the-copyright-act-1994/ 

New Zealand does not publish specific statistics on seizures of counterfeited goods. The country has a robust procedure for the prosecution of IPR violations. New Zealand Police are authorized to investigate and prosecute trademark counterfeiters.

For additional information about national laws and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/. 

Capital Markets and Portfolio Investment

The New Zealand government has a generally positive attitude toward foreign portfolio investment, provided the investment is not considered to be sensitive in nature by the screening body, the Overseas Investment Office (OIO). New Zealand welcomes sustainable, productive, and inclusive investment.

The New Zealand Exchange, or the NZX, is the country’s securities and futures exchange. The Financial Market Authority (FMA) is the government agency responsible for regulating investments and financial markets. The regulatory system is effective, transparent, and supportive of inward flows.

New Zealand adheres to International Monetary Fund (IMF) Article VIII and does not place restrictions on payments and transfers for international transactions.

Credit is allocated on market terms for a variety of instruments, but foreigners and non-residents find difficulty in securing lending in New Zealand.

Money and Banking System

Banking services in the country are robust; bank account penetration is nearly 100 percent. The sector is dominated by Australian banks; by total assets, three of the country’s four largest banks are Australian owned. Overall, the banking sector is worth NZD 695 billion (USD 451 billion) by total assets, small by global standards. Loans and advances account for the vast majority (80 percent) of bank assets. Derivatives are held mainly for hedging purposes. The RBNZ estimates that the non-performing loans ratio for the four largest banks is between 0.3 and 0.4 percent – out of a total loan portfolio worth NZD 453 billion (USD 294 billion).

The banking sector has undergone reforms to better withstand shocks. In 2019, the RBNZ proposed a significant increase to banks’ capital requirements to safeguard them from shocks to the financial system. Increased capital requirements will now be phased in over a five- to seven-year period. By the end of the transition period in 2028, all registered banks in the country will have to meet the new requirements, which will be some of the most stringent in the world.

Non-residents may open bank accounts in New Zealand, provided the applicant has proof of address and an Inland Revenue Department number. For more information: https://www.taxpolicy.ird.govt.nz/publications/2015/2015-or-liopi/matters-raised-submitters/bank-account-requirement#issue-banks-requiring-ird-number 

Foreign Exchange and Remittances

Foreign Exchange

There are no foreign exchange controls in New Zealand. The currency floats freely at market rates. Aside from withholding taxes and AML/CFT regulations, there are no restrictions on foreign investors converting funds associated with an investment.

Remittance Policies

New Zealand’s remittance industry is fragmented. A substantial portion of remittances are paid to the Pacific Islands. In 2019, the RBNZ established the Pacific Remittances Project (PRP) with support from MFAT to address challenges facing remittance services domestically and in the Pacific region. The PRP concluded in 2022. In March 2023, the Ministry of Justice released its draft AML/CFT regulations, which are expected to further tighten restrictions for remittance service providers.

Sovereign Wealth Funds

Worth NZD 56 billion (USD 36 billion), the New Zealand Superannuation Fund (NZ Super) is the country’s sovereign wealth fund. A quarter of the fund is invested in domestic listed equities, one-fifth in timber, one-fifth in fixed income, one-fifth in private companies, less than ten percent in rural land, and the remainder in private equity and real estate.

New Zealand is a member country of the International Forum of Sovereign Wealth Funds (IFSWF). The NZ Super assesses its performance annually against the IFSWF’s Santiago Principles.

In October 2021, the Fund committed NZD 208 million (USD 135 million) to the Copenhagen Infrastructure Partners’ Energy Transition Fund, which focuses on developing industrial-scale sustainable energy infrastructure. Investments in the Fund will mainly be in OECD markets including North America.

Privatization Program

Beginning in the mid-1980s, the government began a rapid course of deregulation and privatization. In 1988, the Ports of Auckland were partially privatized and national carrier Air New Zealand was sold to a consortium. In 1992, the government sold its holdings in Bank of New Zealand, one of the country’s largest banks, to National Australian Bank. Some of these interests were re-purchased by the government, such as Air New Zealand moving back into government ownership in 2001. In 2014 the government completed a program of asset sales to raise funds to reduce public debt. It involved the partial sale of three energy companies and Air New Zealand, with the government retaining its majority share in each. The bulk of the initial share float was made available to New Zealand share brokers and international institutions, and unsold shares were made available to foreign investors. Foreign investors are free to purchase shares on the secondary market.

Subsequent “public private partnerships” in the infrastructure space in the mid-2000s offered the public a chance to participate in government-sponsored projects. In 2019, the Infrastructure Transaction Unit was created within Treasury as an interim measure to provide support to agencies and local authorities in planning and delivering major infrastructure projects. The New Zealand Infrastructure Commission Act was passed in September 2019, to create Crown Entity InfraCom, and it will be responsible for delivering New Zealand’s Public Private Partnership (PPP) Program https://infracom.govt.nz/major-projects/public-private-partnerships/ .

MBIE administers the procurement process. In October 2019, MBIE issued substantive changes to the New Zealand Government’s Procurement Rules. More information can be found here: www.procurement.govt.nz 

Additional Resources

Department of State

• Country Reports on Human Rights Practices ( https://www.state.gov/reports-bureau-of-democracy-human-rights-and-labor/country-reports-on-human-rights-practices/)
• Trafficking in Persons Report ( https://www.state.gov/trafficking-in-persons-report/)
• Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities ( https://www.state.gov/key-topics-bureau-of-democracy-human-rights-and-labor/due-diligence-guidance/)
• U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises ( https://www.state.gov/u-s-national-contact-point-for-the-oecd-guidelines-for-multinational-enterprises/)
• Xinjiang Supply Chain Business Advisory ( https://www.state.gov/xinjiang-supply-chain-business-advisory/)

Department of the Treasury

• OFAC Recent Actions ( https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions )

Department of Labor

• Findings on the Worst Forms of Child Labor Report ( https://www.dol.gov/agencies/ilab/resources/reports/child-labor/findings  )
• List of Goods Produced by Child Labor or Forced Labor ( https://www.dol.gov/agencies/ilab/reports/child-labor/list-of-goods )
• Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World ( https://www.dol.gov/general/apps/ilab )
• Comply Chain ( https://www.dol.gov/ilab/complychain/ )

Climate Issues

The government of New Zealand (GNZ) published its National Adaptation Plan (NAP) in August 2022. The NAP considers the impacts of climate change now and into the future and it sets out how the GNZ will adapt to the unavoidable effects of climate change. The NAP has over 120 actions and responds to risks raised in the climate change risk assessment in 2020. Several actions to address these risks are already underway. https://environment.govt.nz/news/national-adaptation-plan-released/ 

The NAP was implemented under the Climate Change Response Act 2022, the purpose of which was to “enable New Zealand to meet its international obligations under the Convention and the Protocol, to provide for the implementation, operation, and administration of a greenhouse gas emissions trading scheme in New Zealand that supports and encourages global efforts to reduce the emission of greenhouse gases and to provide for the imposition, operation, and administration of a levy on specified synthetic greenhouse gases contained in motor vehicles and also another levy on other goods to support and encourage global efforts to reduce the emission of those gases.” https://www.legislation.govt.nz/act/public/2002/0040/latest/DLM158590.html 

The GNZ released its first Emissions Reduction Plan (ERP) in May 2022, setting an interim target that limits NZ’s emissions to 290 metric tons of carbon dioxide equivalent (Mt CO2-e) between 2022 and 2025. The plan also sets the path towards meeting the GNZ’s long-term emission reduction targets. According to the GNZ, it is a “key step in the country’s transition to a low emissions future, with roughly 300 actions that cover every sector of the economy.” https://www.hud.govt.nz/news/aotearoa-new-zealands-first-emissions-reduction-plan-erp-released/ 

The government requires companies with market capitalizations of more than $40 million, large licensed insurers, registered banks and credit unions, building societies, along with managers of investment plans with assets greater than $650 million to make climate-related disclosures alongside their regular financial reporting from 2023 at the earliest. For more information, see https://environment.govt.nz/what-government-is-doing/areas-of-work/climate-change/emissions-reduction-plan/

New Zealand Emissions Trading Scheme (NZ ETS) is the GNZ’s primary tool for meeting the country’s domestic and international climate change targets, including the 2050 target set by the Climate Change Response Act 2022. NZ ETS requirements are mandated under the Climate Change Response (Emissions Trading Reform) Amendment Act 2020.

In October 2022, the GNZ released a consultation document outlining a plan for the country to be the first in the world to price agricultural emissions, which make up half of New Zealand’s emissions. The announcement was met with criticism and widespread protests from the opposition political party as well as agricultural lobby groups. While the situation remains under consultation, the government remains committed to a plan to price agricultural emissions by 2025.

In 2018 the GNZ launched the “One Billion Trees Program” to increase tree planting across New Zealand.  The goal is to double the current planting rate to reach one billion trees planted by 2028.  Updates regarding progress on the program can be found here: https://www.mpi.govt.nz/forestry/funding-tree-planting-research/one-billion-trees-programme/.

In July 2020, the New Zealand Cabinet agreed that the Forests Act 1949 should be amended to set up a timber legality assurance system, and introduced into Parliament the Forests (Legal Harvest Assurance) Amendment Bill which aims to establish a new regulatory system for providing legal harvest assurance for the forestry and wood-processing sector.

During public submissions stage, the New Zealand Forest Owners Association, which represents the owners of New Zealand’s commercial plantation forests, opposed many aspects of the Bill, saying that the Bill’s “potential to increase costs and reduce value is high.”  ( https://www.nzfoa.org.nz/)

Resources to Report Corruption

Contact at the government agency or agencies that are responsible for combating corruption:
Serious Fraud Office
P.O. Box 7124 – Wellesley Street
Auckland, 1141
New Zealand
www.sfo.govt.nz

Contact at a “watchdog” organization:
Transparency International New Zealand
P.O. Box 5248 – Lambton Quay
Wellington, 6145
New Zealand
www.transparency.org.nz