For all overseas purchasers
It seems as though the Overseas Investment Office (OIO) has been under constant evolution over the last two years. In June, the OIO enacted a change that now requires all overseas purchasers of New Zealand business assets to submit a notification to the OIO before the transaction takes place — regardless of the asset value. This submission will allow the OIO to monitor and prevent New Zealand asset ownership being unnecessarily diluted due to stressed sales caused by unprecedented economic pressures from Covid.
Which transactions does this apply to?
Previously, ‘overseas persons’ who purchased New Zealand business assets valued under $100 million (excluding land), did not have to apply for OIO consent. Under the ‘Emergency Notification’ requirement, however, the OIO must be notified by every overseas person before purchasing any New Zealand business assets — even if the transaction holds minimal value. This includes an increase of shareholding in a business in which the overseas person already holds an interest. The requirement to submit a notification does not extend to purchases that require the consent of the OIO, as the office will already be aware, and have the opportunity to reject, those transactions.
Overseas Investment Amendment Act 2018 now in force
We covered the Overseas Investment Amendment Bill in Property Speaking’s Spring 2018 edition. The Bill has become law and is now the Overseas Investment Amendment Act 2018 (the OIA Act). It has been in force since 22 October.
The implication for you is that when you next buy residential property, there will be another layer of compliance to be completed before your property purchase goes through.
New changes regarding law firms are coming into force and they may affect your next visit to us. The Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (known as AML/CFT) applies to New Zealand law firms from 1 July of this year.
The legislation aims to ensure New Zealand is a safe place to conduct business. The government wants this country to remain at the top of the list of low risk countries with a reputation for low corruption and strong protocols to prevent money laundering activity.
What is money laundering?
Money laundering is the acquisition, possession, transfer, concealment or the conversion of property knowing it is derived from a criminal offence. There are three stages of money laundering:
- Layering, and
We’ve all seen the headlines about growing Chinese investment around the world and New Zealand is certainly no exception. Although you may already have been in business for years and have a great deal of experience, if you want to be truly successful with a Chinese counterparty then there are some key cultural differences which you should take on board. With that in mind we have set out some points to be aware of when you’re dealing with Chinese investors.
Key cultural differences
Many Asian cultures emphasise indirect communication, particularly if there is a problem. This can be frustrating for Westerners who would prefer just to ‘get it on the table’ and discuss. An email worded to state, ‘… we value the fact that we are equal partners …’ may be phrased that way because they are not feeling like an equal partner and are hoping the situation will improve. That subtlety may well be completely lost on the Western recipient who may be later surprised to find out that all is not as it seemed.
You can deal with a situation such as this by spending time asking questions of the other side and seeking to really understand what they are thinking. If you get a response which seems indirect then that’s a signal that you should follow up with other questions.
Today we publish the Midwinter issue of Rural eSpeaking; we hope you enjoy reading it. If you would like to talk further about any of the topics covered in this edition, please don’t hesitate to contact us. In this issue we have articles on:
· Selling the Farm to Foreigners: Overseas Investment Act 2005
· Occupational Safety and Health: The rural perspective
· Over the Fence: Increase in GST – Lack of ease in easements – Building a house on bare land: GST implications