The goal is to make it the country’s ‘one-stop shop’ for foreign direct investment - with hopes it’ll increase capital investment across a range of sectors, like banking and fintech, and infrastructure like transport and energy, manufacturing, and innovation.
Bell Gully partner, and overseas investment lawyer, Glenn Shewan told The Front Page the overseas investment regime has been in place now for 20 years.
“In 2024, for example, they [the Overseas Investment Office] suggested there’s over $4.5 billion of investments that were subject to their consent regime.
“Even last year, Minister [David] Seymour gave some ministerial directives to the OIO to improve its decision-making timeframes. That has really come through in most of the decisions that the OIO makes are now being made in about half the time they used to. That is being seen as positive by investors.
“It’s yet to be seen whether it will involve the opening of the floodgates and how much additional investment will manifest. But, the signals are certainly positive from the Government,” he said.
In Ireland - which is universally seen as a shining example of how a regime like this works - it’s estimated that 20% of all private sector employment is directly or indirectly attributable to foreign direct investment (FDI).
The country’s apparently the most popular destination for FDI in the EU, when measured per capita, according to a report by our own Ministry of Foreign Affairs and Trade.
The United States, in 2023 alone, invested US$491.25 billion (NZ$875 billion) in Ireland.
But, its success doesn’t come without concern about whether some investments may come at a reputational cost.
Chinese firm Huawei for example has three research and development centres in Ireland and contributes €800 million ($1.460 billion) per year to the economy.
It’s the same company whose equipment has been banned in the US since 2022 - and who New Zealand’s GCSB banned from supplying equipment for the country’s first 5G network, citing national security risks.
Shewan said New Zealand does have legislation in place to deal with ‘national security’ risks.
“That is aimed at bringing us into line with other countries, which screen investments for impacts on our national security and public order.
“So, that’s looking at investments in particular in our critical infrastructure and any entities here who are critical suppliers to the New Zealand Defence or intelligence agencies or who deal with military and dual-use technology.
“I think that is part of the regime that’s quite uncontroversial and targets those investors that we might have concerns about from a national security perspective. Otherwise, the Act is very much neutral in terms of who invests here,” he said.
The Government’s holding a ‘global investment summit’ next month – with sovereign wealth and major asset management fund managers expected to attend.
Listen to the full episode to hear more about foreign investment and how NZ might be able to entice more of it.
The Front Page is a daily news podcast from the New Zealand Herald, available to listen to every weekday from 5am. The podcast is presented by Chelsea Daniels, an Auckland-based journalist with a background in world news and crime/justice reporting who joined NZME in 2016.
You can follow the podcast at iHeartRadio, Apple Podcasts, Spotify, or wherever you get your podcasts.
