The principal types of entity in New Zealand are as follows.

Companies

New Zealand companies are incorporated and regulated by the Companies Act 1993 (“the Companies Act”). Companies are separate legal entities (ie, they can contract in their own name and sue or be sued) and are taxed at a flat corporate rate of 28%.

Branch offices

Overseas companies can establish a branch in New Zealand by registering with the Companies Office as an overseas company. This registration is compulsory if the overseas company is “carrying on business in New Zealand”. A branch is not a separate legal entity to the overseas company.

Limited Partnerships

Limited Partnerships are established and governed by the Limited Partnerships Act 2008 (“the LP Act”) and the required limited partnership agreement. Limited partnerships are separate legal entities and must be established with at least one general partner and one limited partner.

General Partners are responsible for management of the limited partnership and must be either:

1. an individual, limited partnership with at least one general partner, or a partnership with at least one partner, that lives in New Zealand or if in Australia is an Australian resident director;
2. a New Zealand registered company; or
3. an overseas company registered under the Companies Act with at least one New Zealand director or Australian resident director.

Limited Partners contribute capital to the limited partnership and are typically passive investors.

Partnerships

Partnerships are governed by the Partnership Law Act 2019, together with the partnership agreement. Partnerships are not separate legal persons, which therefore means that:

• partnership property is held by the partners jointly; and
• each partner has unlimited personal liability for the debts and tax liabilities of the partnership.

Considerations When Selecting an Entity Type

Entity choice in New Zealand is driven primarily by liability allocation, tax, and governance. The most common entity is the limited liability company, with limited partnerships typically utilised for pooled investment vehicles or where there are material tax drivers.

In respect of liability, a company is a separate legal person and shareholder liability is limited to capital commitments, with distributions being regulated by the Companies Act rather than shareholders made liable for company debts. The liability is instead transferred to the board, which, under the Companies Act, has statutory duties.

The limited partnership deliberately allocates liability asymmetrically. General partners are jointly and severally liable for the limited partnership’s debts and liabilities, subject to the statutory limitations, while a limited partner’s liability is limited provided it does not take part in management. From a structuring and governance perspective, limited partnerships are often considered more cumbersome, given the need to establish and maintain a general partner, which is typically a limited liability company.

An overseas branch, by contrast, gives no liability protection at all, since the overseas company itself carries on the business in New Zealand.

The tax drivers operate at a structural level rather than through any single rate. Company profits are taxed to the company, and the imputation system then integrates company and shareholder tax by allowing the company to pass on the benefit of New Zealand tax it has already paid through credits attached to its dividends. Limited partnerships are look-through for tax purposes so that partners are taxed at their marginal tax rate for distributions, while losses may be offset against that partner’s income tax (subject to the loss limitation rules).

Incorporation Requirements

Company incorporation in New Zealand is fairly straightforward and can generally be completed within one to three business days. To incorporate a company, the following are required at a minimum:

• a name, which must be reserved before the application, is filed and must not be identical or almost identical to the name of another company;
• one or more shares;
• one or more shareholders, with each signing consent to be a shareholder in the prescribed form;
• one or more directors, one of whom must either be resident in New Zealand, or resident in Australia and director of a company incorporated in Australia; each director must sign the Director Consent and Certificate form to the effect that they are not disqualified from being appointed or holding office as a company director; and
• a registered office address and service address in New Zealand.

Applications for an IRD number and GST registration can also be made simultaneously.

Incorporation Process

Incorporation applications are filed through the New Zealand Companies Office online portal. The cost to incorporate a company as at October 2026 is NZD136.55 including GST.

A company may, but is not required to, adopt a constitution that sets out the rights and obligations of shareholders and directors on or after incorporation. If a constitution is adopted, a company can negate or modify certain provisions under the Companies Act (for example, the pre-emptive rights regime on the issuance of shares).

Ongoing Compliance

Once established, companies must:

• file an annual return with the Companies Office confirming the registered details of the company;
• maintain statutory records at the company’s registered office, including its share register and register of directors;
• hold an annual meeting of shareholders, unless the constitution opts out of this requirement or if there are no resolutions to be put forward for shareholder approval; and
• notify the Registrar of Companies (Registrar) of changes to its directors, registered office, company name, amalgamations and/or shareholder details (including its ultimate beneficial owner) by updating the Companies Office.

“Large” companies (ie, those with more than NZD66m of assets or NZD33m of turnover in each of the last two financial years), and companies with ten or more shareholders must also appoint an auditor each year to audit their financial statements.

Failure to meet these compliance obligations can result in penalties and/or removal from the register.

Share Capital Framework

New Zealand does not have a concept of par value, authorised capital or stated capital accounts.

The boards of directors of New Zealand companies are free to issue shares to any person, in any number, and at any price they see fit, subject to the Companies Act, the constitution and/or any shareholders’ agreement, including any pre-emptive rights on issuance and the requirement that consideration be fixed by the board and be fair and reasonable to the company and existing shareholder(s) unless approval of all entitled persons is obtained. The board’s discretion is also constrained by the directors’ duties prescribed in the Companies Act and any interest group rules (described further below).

The Financial Markets Conduct Act 2013 (FMCA) also regulates the issuance of shares in New Zealand. An issue of equity will be a regulated offer requiring a product disclosure statement and register entry under Part 3 of the FMCA unless a Schedule 1 exclusion (wholesale investors, small offers, employee share schemes, offers of financial products of the same class as quoted products, etc) applies to every offeree. The provisions of the Takeovers Code will also apply if a company is a code company.

Recording of a person’s name in the share register of a company is prima facie evidence of legal title to the shares. While share certificates may be requested by a shareholder, they are not common in New Zealand.

Multiple Classes of Shares

In structuring multiple classes of shares and attaching rights, restrictions and conditions to such classes, a company should consider the following key considerations:

• share classes can only be established if the constitution of the company permits;
• the basic Companies Act rights attaching to shares can only be modified or negated, and share classes can therefore only be created by the constitution of the company or the terms on which the shares are issued; and 
• the establishment of multiple share classes also gives rise to interest groups under the Companies Act; each interest group must approve by special resolution any action proposed by the company that affects the rights attached to the shares of the relevant interest group.

Common share structures include ordinary shares with standard voting and dividend rights, and preference shares with fixed or preferential dividend entitlements, priority on liquidation, or redemption rights. Non-voting shares may also be created to enable capital raising without diluting existing control.

The key legal requirement on distributions and returns of capital is that a distribution can only be made if the board is satisfied that the company will, immediately after the distribution is made, satisfy the solvency test. The directors who vote in favour of the distribution must provide a certificate to the Registrar confirming this and the grounds on which that determination was made.

The solvency test requires that:

• the company can pay its debts as they become due in the normal course of business; and
• the value of the company’s assets exceeds the value of its liabilities, including contingent liabilities.

In addition, dividends must be paid pro rata to all shareholders unless the constitution provides for differential dividends or all entitled persons consent to a differential dividend.

Reductions of capital, returns of capital, dividends and share cancellations are not formally legislated and proceed as "distributions" authorised by the board under the Companies Act.

Buyback of Shares

A company may only acquire its own shares (whether repurchase or redemption) if its constitution expressly permits it. A company without a constitution, or that is silent on company buybacks, must amend this before buybacks are possible.

The board must then resolve that:

• the acquisition is in the company’s best interests;
• the terms and consideration are fair and reasonable to the company; and
• the solvency test will be satisfied immediately after the repurchase and certify as such including the grounds for the determination.

An acquisition may be a pro rata offer to all shareholders, special offer to selected shareholders, or on-market with or without prior notice to shareholders. If an acquisition is to selected shareholders, disclosure to non-offerees is required and the non-offerees have the right to object and require the company to purchase their shares.

While shareholder approval is not required, if it is obtained, procedural requirements can be negated to expedite the acquisition and reduce the director compliance burden.

A repurchase contract may be unenforceable where the company does not satisfy the solvency test.

Redeemable shares are established from the terms of issue and may be redeemable at the company’s option, at the holder’s option or on a fixed date. Company-option redemptions require board authorisation and satisfaction of the solvency test; a special redemption requires benefit and fairness resolutions, disclosure and objection rights; and holder-option and fixed-date redemptions, while contractually mandatory, remain statutorily conditional on solvency and are treated as distributions.

Cancellation and Treasury Stock

Shares repurchased or redeemed must be cancelled unless the constitution expressly allows it to hold up to 5% of its shares as treasury stock or all entitled person consent is obtained. Rights attaching to those shares are suspended while held, and reissue must satisfy the resolution, solvency and disclosure requirements. Section 82 of the Companies Act separately prohibits a subsidiary from holding shares in its holding company, subject to limited exceptions and disposal obligations.

Financial Assistance

Financial assistance for the purchase of a company’s own shares is permitted where the board resolves that it is in the company’s best interests and on fair and reasonable terms, with certificates signed, and the company will satisfy the solvency test immediately afterwards. Special assistance requires additional disclosure and confers objection and buy-out rights on non-participating shareholders, while assistance not exceeding 5% of shareholders’ funds is permitted where given to all shareholders or pro rata and the other conditions are met. Non-compliant transactions may be unenforceable against the company. Unlike a repurchase, financial assistance does not need to be expressly permitted by the constitution and is not a distribution.

For NZX-listed issuers, the NZX Listing Rules impose further buy-back notification and conduct requirements.

If entitled persons consent is obtained, shares can be acquired or redeemed, and financial assistance can be provided without compliance with the above procedural and governance provisions applying. The solvency requirements will still be required.

Personal Liability

Breach of the solvency test requirements may give rise to personal liability for directors.

Ultimate Holding Company

The board must notify the Registrar as to whether the company has an ultimate holding company – ie, a company that holds or exercises more than half of the voting rights and is not itself a subsidiary – and, if it does, any changes to its ultimate holding company including its name, registration country, registration number and registered office.

Notification must be made within 20 working days of the change by updating the Companies Office records.

Principal Legislation

The Companies Act is New Zealand’s principal corporate governance statute. It contains a comprehensive set of default rules, including directors’ duties, shareholder rights and a framework for board decision-making.

Additional Governance Legislation

The FMCA and, for listed companies, the NZX Listing Rules, impose additional governance obligations, including financial reporting obligations, continuous disclosure requirements and restrictions on insider trading.

The NZX Corporate Governance Code (“the Code”), which is a subset of the NZX Listing Rules, addresses board composition, audit committees, risk management, remuneration and shareholder relations in listed companies.

Financial Reporting

The Financial Reporting Act 2013 (FRA) sets the accounting standards/reporting tiers applicable to public and private companies. Importantly, the FRA also sets the definition of “large” (see 1.2 Incorporation and Ongoing Compliance).

Statutory Framework

The principal fiduciary duties owed by directors are codified in sections 131 to 138 of the Companies Act. The principal duties are as follows.

• Duty to act in good faith – this core duty requires every director to act in good faith and in what they believe to be the best interests of the company.

• Duty to exercise powers for proper purpose – directors must exercise their powers for a proper purpose; this duty regulates their ability to exercise their powers for a collateral or self-interested purpose.
• Duty to comply with law and constitution – directors must ensure that the company complies with the Companies Act and the company’s constitution (if any); this obligation applies regardless of whether the director believes an action to be in the best interests of the company.
• Creditor protection duties – two duties are targeted at creditor protection:
1. directors must not allow the company’s business to be carried on in a manner likely to create a substantial risk of serious loss to creditors; and
2. they must not agree to the company incurring an obligation unless they believe it to be on reasonable grounds, and that the company will be able to perform it when required.

Standard of Care

Directors are required to exercise the care, diligence, and skill that reasonable directors would exercise under the same circumstances. This is an objective standard – a director cannot avoid liability merely by showing honest or good-faith intentions. However, a director may rely on reports, statements, and other information prepared by other directors, group employees, or expert advisers, provided it is reasonable to do so.

Additional Duties

Additionally, directors must:

• refrain from disclosing, using or acting on information accessed in their capacity as directors other than for the company’s purposes or as required by law;
• disclose interests in a transaction or proposed transaction with the company; and
• ensure that the company keeps proper accounting records that correctly record and explain its transactions and make it possible to determine its financial position with reasonable accuracy.

Court Application of Duties

Core duty

In relation to the core duty, practically, while the company is solvent, the company’s “best interest” will often align with the collective interests of its shareholders. However, the courts have taken the view that, as a company nears insolvency, directors must take into consideration the interests of the company’s creditors.

Reckless trading

Under Section 135 (reckless trading) of the Companies Act, the courts have held that the “substantial risk of serious loss” test is met only if the company’s financial position would have alerted a reasonable and prudent director that a transaction would cause serious loss to the company’s creditors.

Personal liability

Directors can be held personally liable for breach of certain directors’ duties. Liability can arise on liquidation by court order as a result of a shareholder claim for duties owed to them directly or for criminal offences under the Companies Act. Directors may also face criminal liability, disqualification from office and personal liability under other legislation (eg, the Health and Safety at Work Act 2015).

Best Practice

While the statutory requirements regarding board composition, particularly for private companies, are limited, best practice in New Zealand is to achieve a balanced board based on size, skills and experience, executive vs non-executive roles, independent and interested directors and diversity. The manner in which these aspects are balanced depends on the size and nature of the company.

Statutory Requirements

Other than the minimum director requirements specified in incorporation requirements, the Companies Act does not prescribe additional board composition requirements for private companies.

Regarding independence, directors must disclose the transactions they are “interested” in (see 2.2 Directors’ Duties and Liabilities). A director’s interest generally arises where a material financial benefit from the transaction will or may be received by:

• the director;
• a close family member of the director (a parent, child, spouse, civil union partner or de facto partner); or
• an entity of which the director is a director, officer or trustee (excluding the company’s wholly owned subsidiary or its wholly owned holding company). 

Interested directors may still vote on a resolution to enter a transaction that they are interested in.

Listed Companies

The NZX Listing Rules require the board of listed companies to consist of at least three directors, two of whom must ordinarily live in New Zealand and at least two independent directors.

Additionally, the Code recommends that a majority of a listed company board be independent. The Code also recommends that boards establish and disclose a diversity policy, including measurable objectives for gender diversity and report against those objectives annually.

Climate-Related Disclosure

New Zealand has no single ESG statute for companies. Obligations come from several regimes, and only the FMCA, Financial Markets Conduct Regulations 2014 and the External Reporting Board reporting standards require sustainability reporting.

The FMCA requires large listed issuers, registered banks, licensed insurers, credit unions, building societies and managers of large, registered investment schemes to produce annual climate statements. Whether an entity is “large” is defined in the FMCA in respect of each category of entity, and includes quoted securities exceeding NZD60 million in fair value or market price or total assets exceeding NZD1 billion. The climate statements must be made in accordance with the External Reporting Board climate standards and lodged with the Registrar.

A climate reporting entity and each of its directors may be subject to penalties, which include imprisonment, if they fail to comply with the climate reporting requirements.

A 2023 amendment to the Companies Act provides that directors may, in considering the best interests of a company, consider matters other than the maximisation of profit (eg, ESG matters). This allows directors to take ESG matters into account, but does not require them to do so.

Best practice for boards includes establishing ESG governance frameworks, integrating climate and sustainability risk into enterprise risk management, and ensuring adequate oversight of ESG-related disclosures and targets.

New Zealand has no single statute on conflicts of interest and related-party transactions. The rules depend on the type of entity.

Companies Act Approval

For private companies, unless the company’s constitution provides otherwise, shareholder approval is not required for the company to enter into a transaction where a director is conflicted via a financial interest, nor is that director disqualified from voting on a decision for the company to enter into that transaction (unless the constitution expressly provides otherwise).

Instead, the relevant director must disclose the nature and extent of their “interest” to the board as soon as is practicable and enter that in the company’s interests register. Any interests entered in the interests register must be disclosed to shareholders in the annual report. A failure to disclose does not, by itself, make the transaction invalid.

A company may avoid a transaction in which a director is interested within three months after the transaction has been disclosed to all shareholders. However, such transactions cannot be avoided where the company receives fair value under the transaction.

NZX Listing Rules

For listed companies, Section 5.2 of the NZX Listing Rules requires shareholder approval before a listed issuer (or any of its subsidiaries) enters a “material transaction” with a related party. A “related party” is broadly defined and includes directors, senior managers, holders of more than 10% of the company’s voting securities, and their associated persons.

Related-party transactions must be approved by ordinary resolution of disinterested shareholders (ie, shareholders excluding the related party and its associates). Before the shareholder vote, the company must commission an independent appraisal report from a qualified independent adviser, which assesses the merits and fairness of the transaction and is made available to shareholders.

Once entered into, the company must publicly disclose that fact through NZX.

Certain categories of transaction are exempt from the shareholder approval requirement, including transactions on arm’s-length commercial terms that are not material to the listed issuer and transactions entered into in the ordinary course of business on standard commercial terms.

NZX Corporate Governance Code

The Code makes recommendations on managing conflicts of interest. These recommendations include that:

• boards adopt and disclose a conflicts-of-interest policy; and
• directors recuse themselves from deliberations and voting where they have a material personal interest.

Managed Investment Schemes

The manager of a registered managed investment scheme under the FMCA must not enter into a transaction that gives a “related-party benefit”. The prohibition also covers investment managers, administration managers and anyone else the manager has contracted functions out to.

The exceptions to this general prohibition include:

• where the scheme manager has obtained the consent of the transaction supervisor prior to entering into to the transaction;
• where the manager has certified that the transaction is on arm’s length commercial terms; involves the acquisition or disposal of managed investment products in another registered scheme or a prescribed interest in a prescribed overseas scheme; involves an investment made in the ordinary course of business or any other prescribed benefit or transaction under the FMCA; or
• where the transaction is approved by, or contingent on approval by, a special resolution of the class of affected scheme investors.

Default Rights

Unless modified or negated by the company’s constitution or the terms on which the shares are issued, all shareholders have the default rights specified in the Companies Act – ie, the right to one vote per share, and the right to an equal share in authorised dividends and in any distribution of surplus assets of the company.

Shareholders are also entitled to receive the company’s annual report, request a copy of company-held information, and to inspect certain company records on written notice. These rights ensure that shareholders have access to material information about the company’s affairs, governance and financial position.

While the board has broad authority to act without shareholder consent on most operational and strategic matters, certain fundamental matters require shareholder approval by special resolution (typically 75% of votes cast), including:

• approving a major transaction (ie, a transaction involving the acquisition or disposition of assets or incurring an obligation exceeding 50% of the value of the company’s assets before the transaction);
• approving an action that affects the rights attached to shares; this requires approval by special resolution of each class of shares;
• adopting, amending or revoking a constitution;
• putting the company into liquidation or approving an amalgamation; and
• requesting removal of the company.

In addition, the shareholders have the right to appoint and remove directors by ordinary resolution.

Statutory Remedies

Unfairly prejudicial conduct

Under section 174 of the Companies Act, shareholders or former shareholders may apply to the New Zealand High Court where the company’s affairs have been, are being, or are likely to be, conducted in a manner that is oppressive, unfairly discriminatory or unfairly prejudicial. Failure to comply with certain provisions of the Companies Act, including relating to pre-emptive rights, dividends, alteration of shareholders rights and major transactions, are deemed to be unfairly prejudicial.

The court has broad remedial discretion to grant any order it thinks fit, including orders regulating the company’s future conduct, requiring the company or other shareholders to purchase the applicant’s shares, setting aside transactions or placing the company into liquidation.

Minority buy-out rights

Shareholders that vote against a resolution on any of the following matters have the right to require the company to purchase their shares at a fair and reasonable price (calculated in accordance with the Companies Act):

• an action that affects the rights attached to shares;
• adoption of or a change in constitution, with such change imposing or removing a restriction on the company’s activities;
• approval of a major transaction or amalgamation.

Fundamentally, this remedy recognises that dissenting shareholders should not be forced to remain part of company.

Personal actions by shareholders

Shareholders and former shareholders may also bring an action against a director or the company for breach of a duty owed to them as a shareholder. The Companies Act specifies certain duties which are owed to shareholders and others which are owed to the company only and not shareholders.

Requirement to act

Shareholders also have the right to apply to the High Court to request that the court make an order to require a director or the company take action required under the constitution, the Companies Act, or grant other consequential relief.

Representative actions

The court can appoint a shareholder representative where shareholders with substantially the same interests bring action against the company or a director.

Shareholders’ agreements operate alongside a company’s constitution and the Companies Act and can be used to provide detailed rights, processes, obligations or protections. As they are private contracts, they allow confidentiality to be maintained.

Transfer Restrictions

Shareholders’ agreements typically restrict the transfer of shares through pre-emptive rights regimes, tag and drag along rights, lock-up periods and compulsory transfer regimes for death, termination of employment or default by a shareholder.

Enforceability Considerations

Enforcement of shareholders’ agreements is contractual. Therefore, a shareholders’ agreement is only enforceable between the parties to the agreement.

Since certain Companies Act provisions can only be negated or modified if provided for in the constitution, the constitution must cross-refer to the shareholders’ agreement to ensure enforceability while also maintaining confidentiality.

Dispute Resolution

In addition to any contractual rights under a shareholders’ agreement, shareholders retain the statutory protections under the Companies Act as described in 3.1 Shareholders’ Rights above.

Common forms of dispute resolution mechanisms within a shareholders’ agreement include:

• mediation, arbitration and/or court proceeding (or a combination of these steps); and/or
• commercially negotiated deadlock provisions, eg, requiring one shareholder to offer to buy the other’s shares (or to sell their own shares to the other shareholder) or providing for the company to be liquidated.

Principal Laws and Regulations

The principal laws and regulations governing mergers and acquisitions in New Zealand are:

• the Companies Act, which provides the basic corporate governance framework (eg, major transaction approvals) and governs schemes of arrangements and amalgamations;
• the FMCA, which governs market conduct and disclosure;
• the Takeovers Act 1993 and associated regulations (together “the Takeovers Code”), which govern changes of control in “code companies” – ie, those listed on the NZX, with 50 or more shareholders and at least medium-sized (with broadly NZD30 million in assets or NZD15 million in revenue);
• the NZX Listing Rules, which cover M&A involving listed companies;
• the Commerce Act 1986 (“the Commerce Act”), which regulates merger control by prohibiting acquisitions that would or would be likely to substantially lessen competition in a market; this is a voluntary regime; and
• the Overseas Investment Act 2005 (OIA), which governs foreign investment (see 8. Foreign Investment).

There are also sector-specific laws and regulations that may apply, for example in relation to a significant acquisition of a New Zealand-registered bank or insurer.

Deal Structures

Deal structure depends on whether the target is a private, public and/or code company.

Private Companies

Private-company acquisitions are typically structured as either share or asset purchases, driven by regulatory, tax, and commercial considerations – unless the target is a code company. The transaction is negotiated bilaterally between the seller and buyer.

Code and Public Companies

If the target is a code company – and the transaction would trigger the relevant thresholds under the Takeovers Code – or is a listed company, the transaction is structured as either a scheme of arrangement or a full or partial takeover offer under the Takeovers Code.

In a takeover offer, the buyer makes an offer to shareholders to acquire all or some of their shares. If the buyer wishes to acquire all of the shares in the target company, it must control at least 90% of the target’s shares.

A scheme of arrangement is a court-approved process under Part 15 of the Companies Act that can be used to acquire 100% of a company.Scheme processes are controlled by the target company and require the approval of the target’s shareholders (ie, 75% of votes cast in each interest class entitled to vote and who are voting and a simple majority of all shareholders entitled to vote), and the court. It also generally requires the Takeovers Panel to give the court a “letter of no objection” confirming that the disclosure is equivalent to a Code offer and that the shareholder voting classes are appropriate.

The preferred structure depends on the buyer’s preference for certainty as against timing; a scheme can provide greater certainty, but the timetable is partly within the court’s control, whereas a takeover offer is buyer controlled but has less certainty as a higher shareholder approval threshold will be required.

Recent Developments

The OIA reforms constitute the most significant legal development affecting M&A recently, having come into force on 6 March 2026. The reforms formed part of the New Zealand government’s policy to promote foreign direct investment into the country while maintaining protection of New Zealand’s national interest where appropriate. The reforms consolidate the former benefit to New Zealand, investor, and national interest tests into a single national interest consent pathway for most asset classes. Under the new pathway, the OIO must conduct an initial national interest risk assessment within 15 working days. If no risks are identified, consent will be granted. If the OIO has reasonable grounds to consider that a risk to the national interest exists, a Stage 2 assessment will be required (see 8.2. Foreign Investment Restrictions and Sector-Specific Rules).

A review of New Zealand’s competition settings, with a focus on merger control, was also launched in December 2024 with the Commerce (Promoting Competition and Other Matters) Amendment Bill currently before Parliament. If approved, the Commerce Commission will have expanded merger powers to challenge deals that entrench market power, review acquisitions made in the previous three years and suspend unnotified deals for up to 40 working days during assessment. The Commission will also be permitted to accept behavioural undertakings. A new ban on predatory (below-cost) pricing will also be introduced.

Regulatory Framework

As indicated, the Financial Markets Conduct Act or FMCA is the primary legislation governing capital markets in New Zealand. The Financial Markets Authority or FMA is the principal regulator overseeing compliance.

Public Offerings

Public offers require a product disclosure statement (PDS), which must be registered on the Disclose Register. The PDS must contain all material information about the offer, be accurate and understandable, and comply with prescribed content and length requirements. The FMA does not formally approve a PDS before registration but has the power to stop an offer if the disclosure does not comply with the FMCA. The IPO process typically involves board and shareholder approval, appointment of advisers, preparation and registration of the PDS, marketing (usually including an institutional bookbuild and a retail offer), NZX listing approval, and allotment.

Exemptions and Wholesale Investors

The FMCA provides a range of exclusions to disclosure under Schedule 1. The most commonly relied upon exclusions are as follows.

• Wholesale investors, which include persons investing at least NZNZD750,000 in a single transaction; persons or entities with net assets of at least NZD5 million; large entities meeting prescribed size thresholds; government agencies; and eligible investors certified by an independent person as having sufficient financial markets experience.
• Small offers: an offer to no more than 20 investors in any 12-month period, raising no more than NZNZD2 million.
• Other exclusions: these include offers to close business associates and relatives; employee share schemes (subject to conditions) and other specified categories.

Resale Restrictions and Enforcement

Securities issued under a Schedule 1 exclusion are generally subject to on-sale restrictions – ie, they may only be resold to other persons who qualify for an exclusion (such as wholesale investors) or within the context of a regulated offer with full PDS disclosure.

Listed issuers must comply with continuous disclosure obligations under the NZX Listing Rules by filing half-year and full-year financial statements.

Listed issuers must also promptly disclose to NZX any material information that would be expected to have a material effect on the price of the issuer’s financial products. An issuer may withhold this information in limited circumstances (ie, if it is incomplete).

Insider Trading

The FMCA prohibits insider trading in quoted financial products of listed issuers. A person is an “information insider” if they possess information about a listed issuer that is not generally available to the market but which, if it were, a reasonable person would expect to have a material effect on the price of the issuer’s quoted financial products. The person must also know, or ought reasonably to know, that they hold such information. An information insider must not trade in the relevant financial products, disclose the inside information to another person who is likely to trade on it, or advise or encourage another person to trade or continue to hold the products.

Market Manipulation

It is an offence to take, or omit to take, any action that the person knows or ought reasonably to know will create, or is likely to create, a false or misleading appearance of trading activity, or of the supply, demand, price, or value of quoted financial products. Separately, it is prohibited to make statements or disseminate information about a listed issuer that the person knows, or ought reasonably to know, is false or materially misleading and is likely to influence trading or the price of that issuer’s quoted financial products. The FMCA provides limited defences and exceptions to these prohibitions, including for knowledge of the person’s own trading intentions, transactions entered into under pre-existing trading plans, information barrier arrangements, and certain corporate actions, such as takeover offers.

Enforcement Powers

Both civil and criminal liability can arise from insider trading and market manipulation. The FMA may bring civil proceedings seeking pecuniary penalty orders and compensation for affected investors.

Substantial Product Holder Regime

Under the FMCA, a person who has a relevant interest in 5% or more of a class of quoted voting products in a listed issuer is a “substantial product holder” and must notify the listed issuer and NZX within two trading days.

A substantial product holder must also notify the issuer and NZX of any change of 1% or more in their holding, and of any change in their relevant interest.

Whistle-Blower Protections

The Protected Disclosures (Protection of Whistleblowers) Act 2022 provides the principal whistle-blower protection framework. The Act protects current and former employees, contractors, volunteers, and other persons in a work context who report “serious wrongdoing” – a broadly defined term that includes criminal offences, serious risks to health, safety, or the environment, serious misuse of public funds, and oppressive or grossly negligent conduct by public sector bodies. Disclosure is not mandatory.

Governance Frameworks for Managing Compliance Risk

Good governance practice in New Zealand, informed by directors’ statutory duties, the NZX Corporate Governance Code, and regulatory expectations, typically involves a board-approved compliance policy and charter, clear allocation of responsibility for legal and regulatory compliance, and established escalation pathways.

Listed issuers are expected to have an audit committee comprising a majority of independent directors, with responsibility for overseeing financial reporting, internal controls, and risk management. The NZX Corporate Governance Code also recommends that boards maintain a risk management framework proportionate to the company’s risk profile.

Personal Property Securities

The Personal Property Securities Act 1999 (PPSA) governs security interests over personal property in New Zealand. The PPSA applies to any transaction that, in substance, creates a security interest, regardless of its form. Security interests are perfected by registration of a financing statement on the Personal Property Securities Register. Priority between competing security interests is generally determined by the order of registration, although purchase money security interests receive super priority if perfected within prescribed timeframes.

Types of security interests include general security over all present and after-acquired property, specific security (ie, over certain assets), hire purchase agreements, leases/bailments for a term of more than one year and security taken to secure all or part of an asset’s purchase price.

Real Property Securities

Mortgages over land are registered under the Land Transfer Act 2017 and the Property Law Act 2007 (PLA), with priority determined by the order of registration on the relevant title.

Acquisition Finance

Banks remain the primary source of debt finance in New Zealand. There are no specific regulatory approvals required for a company to borrow or grant security, although shareholder approvals may be required under the Companies Act, particularly if the financing is to be secured against target group assets. Acquisition financing is typically structured through a combination of senior secured debt and, in larger transactions, mezzanine or subordinated debt. Security packages commonly include general security agreements covering all personal property, specific security over key assets, and mortgages over real property. Intercreditor arrangements govern the priority and enforcement rights among multiple lenders.

Formation Requirements

New Zealand contract law is governed by common law principles and the Contract and Commercial Law Act 2017 (CCLA). The CCLA does not contain the statutory writing requirements for land contracts and guarantees which are governed by the PLA. A valid contract requires offer, acceptance, consideration, certainty of terms, intention to create legal relations, and capacity. These are common law requirements and are not codified in the CCLA. Contracts generally need not be in writing to be enforceable, except for contracts dealing with the sale or disposition of land, guarantees, discharge of a debt or deeds.

Invalidation and Interpretation

Contracts may be invalidated on grounds including misrepresentation, mistake, duress, undue influence, unconscionability, and illegality. The CCLA codifies some of these grounds while others remain common law or equitable doctrines.

New Zealand courts interpret commercial contracts objectively, seeking to ascertain the meaning of the language used by the parties in the context of the contract as a whole.

Remedies for Breach

Remedies for breach of contract include damages (compensatory, consequential, and in some cases exemplary), termination, specific performance and injunctive relief. Damages are assessed on the basis of putting the innocent party in the position they would have been in had the contract been performed.

Termination and Wrongful Termination

A party may terminate a contract for a repudiatory breach, for breach of an essential term or in accordance with a contractual termination clause agreed in the contract.

Wrongful termination may amount to repudiation (ie, evidencing the terminating party’s intention to not perform, or complete performance, of its contractual obligations), giving the non-terminating party a right to terminate.

Force Majeure and Frustration

New Zealand law does not have a statutory doctrine of force majeure. The scope and application of any force majeure event is determined by the terms of the relevant agreement. The common law doctrine of frustration applies where performance becomes impossible or fundamentally different from what the parties contemplated, through no fault of either party. Frustration discharges the parties from future obligations under the contract.

Commercial Considerations

In dealing with intellectual property (IP) it is important to ensure that ownership of that IP and the rights associated with it vests with the correct entity. IP in New Zealand is regulated through specific laws and administered primarily by the Intellectual Property Office of New Zealand (IPONZ). Common forms of registerable IP in New Zealand are trade marks, patents and designs. It is recommended that all registerable IP in New Zealand is registered with IPONZ. Copyright and trade secrets cannot be registered in New Zealand. However, copyright protection is automatic on creation of the works, provided the works meet the criteria specified by the Copyright Act 1994.

IP can be assigned or licensed. Assignments of registered IP should be documented and filed with the New Zealand Intellectual Property Office (IPONZ) to ensure enforceability against third parties. Copyright assignments must also be in writing.

Licences may be exclusive, sole, or non-exclusive, with commercial transactions commonly addressing territory, duration, sub-licensing rights, quality control (particularly for trade marks) and termination.

Ownership rules are a key consideration. Employers generally own copyright in works created by employees in the course of employment, and commissioners are presumed to own copyright in certain commissioned works. For patents, the inventor is the first owner unless the invention was made in the course of employment.

Remedies for IP infringement include injunctions, damages or an account of profits and delivery up of infringing goods. Infringement of copyright works and counterfeiting of registered trade marks can also give rise to criminal sanctions of imprisonment up to five years or a fine of up to NZD150,000.

Principal Consumer Protection Laws

New Zealand’s consumer protection regime is built on three principal statutes: the Fair Trading Act 1986 (FTA), the Consumer Guarantees Act 1993 (CGA) and the Credit Contracts and Consumer Finance Act 2003 (CCCFA).

FTA

The FTA prohibits misleading and deceptive conduct in trade (Section 9), false or misleading representations, and unsubstantiated representations (Section 12A). The FTA’s unfair contract terms regime applies to standard form consumer contracts and to standard form “small trade contracts” that do not exceed NZD250,000 per annum. The Commerce Commission may apply to the court for a declaration that a term is unfair, and, if a term is declared unfair, it is a breach of the FTA to enforce it.

CGA

The CGA implies statutory guarantees into all consumer transactions for consumer goods and services. It is not possible to contract out of these guarantees in consumer transactions. In business-to-business transactions, the parties may agree in writing to contract out of the CGA, but only if it is fair and reasonable to do so.

CCCFA

The CCCFA regulates consumer credit contracts – ie, credit provided to individuals for personal, domestic, or household purposes. The CCCFA imposes lender responsibility principles (requiring lenders to exercise the care, diligence, and skill of a responsible lender), prescriptive disclosure requirements, and limits on interest and fees for high-cost consumer credit.

Enforcement Mechanisms

Consumers can enforce rights directly against suppliers and manufacturers under the CGA. Depending on the nature of the failure, consumer remedies under the CGA include repair, replacement, refund, compensation for reduction in value or compensation for reasonably foreseeable loss.

The Commerce Commission’s enforcement powers under the FTA include seeking pecuniary penalties (up to NZD600,000 for companies and NZD200,000 for individuals), injunctions, corrective advertising orders, enforceable undertakings, and management banning orders against repeat offenders.

Under the CCCFA, courts may impose penalties of up to NZD600,000 for companies and NZD200,000 for individuals, and may amend the terms of a credit contract, grant injunctions, or prohibit enforcement of contractual terms.

Unfair Practices, Misleading Advertising, and E-Commerce

The FTA’s prohibition on unconscionable conduct gives the courts a broad tool to address serious misconduct that falls below accepted standards of business behaviour. In assessing unconscionable conduct, the court may have regard to a range of factors, including the relative bargaining positions of the parties, any undue influence or unfair tactics and the terms and conditions of the transaction.

The FTA’s prohibitions apply equally to online transactions. Section 3 of the FTA extends the FTA to conduct outside New Zealand to the extent that it relates to the supply of goods or services within New Zealand which captures cross-border e-commerce arrangements targeting New Zealand consumers.

Commerce Act

The Commerce Act also prohibits acquisitions of shares or business assets that would have, or would be likely to have, the effect of substantially lessening competition in a market. New Zealand operates a voluntary clearance regime. There is no mandatory notification requirement for mergers, but parties can apply for clearance, which the Commission aims to decide within 40 working days.

Penalties

Penalties for breaching the Commerce Act are significant. An individual may be fined up to NZD500,000. A company may be fined up to the greater of NZD10 million, three times the commercial gain from the contravention, or 10% of the company’s group turnover. Criminal sanctions apply to cartel conduct, with imprisonment of up to seven years for individuals.

Foreign Investment Overview

The OIA is the principal screening statute, administered by the Overseas Investment Office (OIO). An “overseas person” includes any individual who is not a New Zealand citizen or ordinarily resident in NZ; any body corporate incorporated outside New Zealand; and any New Zealand entity in which overseas persons have more than 25% ownership or control.

OIO consent is required before an overseas person acquires:

• significant business assets – where the value of securities, consideration, or assets exceeds NZD100 million (or NZD200 million for investors from certain free trade agreement partner countries, and approximately NZD676 million for certain Australian non-government investors);
• sensitive land – this is specifically defined, but broadly includes residential land, non-urban land over five hectares, farm land, and certain forestry rights; and/or
• fishing quota – governed through the OIA’s incorporation of sections 56–58B of the Fisheries Act 1996.

Overseas persons must obtain OIO consent before acquiring a legal or equitable interest in significant business assets, sensitive land or fishing quota (though agreements can be conditional on consent). The OIO decides most applications, except where the national interest test applies, which will require a decision from the Minister of Finance. Application fees can range up to NZD136,300. Statutory timeframes range from 15 working days (under the new consolidated pathway) to 100 working days (farm land) and 200 working days (fishing quota).

All applicants must satisfy the investor test, a bright-line assessment of 12 character and capability factors including criminal convictions, corporate fines, immigration ineligibility, tax avoidance penalties and unpaid tax of NZD5 million or more.

Sector-specific restrictions on foreign ownership

New Zealand does not generally prohibit foreign ownership in specific sectors, and 100% foreign ownership is permitted subject to meeting the OIA criteria. However, several regulated industries impose separate approval requirements.

National security review process

The OIA includes a national security call-in regime for transactions involving strategically important businesses (SIBs). SIBs include businesses involved in military or dual-use technology, ports and airports, electricity, water and telecommunications and important financial institutions and financial market infrastructure.

Notification is mandatory for transactions involving military/dual-use technology or critical direct suppliers. Voluntary notification is available for other SIB transactions either before or within six months after completion. If not notified, the Minister retains power to call in the transaction.

Incentives for foreign investors

New Zealand does not operate a formal foreign investment incentive programme such as tax holidays, free trade zones, or direct grants. Practical advantages include a competitive corporate tax rate of 28%, no stamp duty, no general capital gains tax on most asset disposals, and an R&D Tax Incentive offering a 15% tax credit for eligible R&D expenditure.

Recent developments

The Overseas Investment (National Interest Test and Other Matters) Amendment Act 2025 took effect on 6 March 2026. It consolidates the former benefit to New Zealand, investor, and national interest tests into a single national interest consent pathway for most asset classes. Under the new pathway, the OIO must conduct an initial national interest risk assessment within 15 working days. If no risks are identified, consent will be granted. If the OIO has reasonable grounds to consider that a risk to the national interest exists, a Stage 2 assessment will be required.

Privacy Act 2020

The Privacy Act 2020 (Privacy Act) and the Biometric Privacy Code 2025 form New Zealand’s principal data protection legislation. The Privacy Act is built around 14 Information Privacy Principles that govern the collection, storage, use and disclosure of personal information in New Zealand. Generally:

• consent should be obtained from the individual prior to collection;
• collected information must only be used in connection with the purpose it was collected for;
• individuals have a right to request access to, and correction of, information held about them; and
• disclosure of information is limited.

The Privacy Act prescribes a mandatory notification regime for privacy breaches that have caused, or are likely to cause, serious harm to affected individuals, with penalties of up to NZD10,000 for failure to notify.

Cross-Border Transfers

There are no blanket data localisation requirements in New Zealand, but agencies must take reasonable steps to ensure that overseas recipients of personal information are subject to comparable privacy protections.

Anti-Money Laundering

The Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AML/CFT Act) requires reporting entities (such as banks, financial institutions and lawyers) to conduct risk assessments, perform customer due diligence, report suspicious transactions, and maintain adequate records.

Sanctions and Trade Restrictions

New Zealand implements the full range of United Nations Security Council sanctions through regulations made under the United Nations Act 1946. These apply to all persons and entities in New Zealand.

The Russia Sanctions Act 2022 is New Zealand’s only autonomous (non-UN) sanctions legislation. It establishes a framework for asset freezes, travel bans, trade prohibitions, and services restrictions targeting designated Russian persons and entities.

Export controls on strategic goods are administered under the Customs and Excise Act 2018. The Customs Export Prohibition (Strategic Goods) Order 2021 prohibits the export of specified military goods, dual-use goods, items that may be destined for use in chemical or biological weapons, and related documentation.

Anti-Corruption and Anti-Bribery

Bribery and corruption are criminal offences under the Crimes Act 1961 and the Secret Commissions Act 1910. The Crimes Act 1961 prohibits bribery and corruption in the public sector while the Secret Commissions Act 1910 criminalises corrupt gifts and secret commissions given to or received by agents in commercial dealings.

Companies operating in New Zealand are expected, as a matter of good governance, to implement appropriate measures. These typically include board-approved anti-bribery and corruption policies, staff training, risk assessments, due diligence on third-party intermediaries and agents, gifts and hospitality registers and whistle-blower channels.

Enforcement

Under the AML/CFT Act, the Department of Internal Affairs can issue formal warnings, censures, enforceable undertakings, injunctions, and civil pecuniary penalty proceedings in the High Court.

The Serious Fraud Office (SFO) is the principal enforcement body for serious and complex fraud, bribery, and corruption. The SFO has broad investigative powers, including compulsory production orders and powers to compel testimony.

The Ministry of Foreign Affairs and Trade (and its sanctions unit) administer sanctions and related restrictions. Enforcement is supported by New Zealand Customs, which administers export controls on strategic goods and the New Zealand Police.

Environmental Regulation

The Resource Management Act 1991 (RMA) is the principal environmental statute, providing a framework for the sustainable management of natural and physical resources including land use, air and water quality, and the coastal environment. Resource consents are required for activities that may have environmental effects. New Zealand operates an Emissions Trading Scheme (ETS) under the Climate Change Response Act 2002 as its primary carbon pricing mechanism. Climate-related litigation is an emerging area, with increasing scrutiny of corporate environmental disclosures and conduct.

Health and Safety

The Health and Safety at Work Act 2015 imposes duties on persons conducting a business or undertaking to ensure, so far as is reasonably practicable, the health and safety of workers and others affected by the work. WorkSafe New Zealand is the principal regulator. Penalties for serious breaches are substantial, including fines of up to NZD3 million for companies and up to NZD600,000 for individuals, and imprisonment of up to five years for reckless conduct causing death or serious injury.

Current Regulatory Position

New Zealand does not have specific legislation governing the use of artificial intelligence. Existing laws, including the Privacy Act, the FTA and the FMCA may apply to AI systems depending on their use. The Government is monitoring international developments in AI regulation. At present, the emphasis is on principles-based guidance, ethical AI use, and the application of existing legal frameworks to emerging technologies rather than prescriptive AI-specific legislation.

Other Regulatory Requirements

Certain industries in New Zealand are subject to specific licensing and regulatory regimes. These include the Land Transport Rule: Operator Licensing 2017 (governing transport service licences for passenger, rental, vehicle recovery, and goods services), the Gambling Act 2003, and sector-specific licensing for financial services, telecommunications, and energy. Building and construction activities are regulated under the Building Act 2004.

Principal Legislation

The Employment Relations Act 2000 (ERA) is the primary employment legislation in New Zealand. All employees must have a written individual employment agreement or be covered by a collective agreement entered into between the employer and a trade union. The ERA imposes a broad duty of good faith on employers and employees in their dealings with each other. Employees have the right to bring claims against their employer at any stage of the employment relationship, including if they have been unjustifiably disadvantaged in any way.

Minimum employment standards include a minimum wage (currently NZD23.50 per hour) four weeks’ paid annual holiday/vacation; 10 days’ paid sick leave; paid bereavement leave; and 12 public holidays. Parental leave of up to 52 weeks is available, with 26 weeks’ paid leave (at a fixed rate) funded by the Government.

Termination of Employment

Employees who believe they have been unjustifiably dismissed may raise a personal grievance. A dismissal will be unjustified if the employer did not have a substantive reason to dismiss (such as misconduct, incapacity or redundancy) or did not follow a fair and reasonable process in reaching the decision to dismiss.

The “justification test” under the ERA requires the employer to demonstrate that its actions were what a fair and reasonable employer could have done in the circumstances, which includes the key principles of natural justice and good faith.

Recent changes to New Zealand law include that new (and, from February 2027, all) employees earning over a pay threshold (currently NZD200,000 per annum) or in a contractual 90-day trial period, do not have the right to bring a personal grievance.

Disputes of any kind relating to employment are resolved through the Employment Relations Authority, with appeal to the Employment Court. The Government also provides a free Mediation Service to assist resolution of employment disputes.

Executive Compensation

There is a broad range of approaches to executive compensation in New Zealand which may include salary only, long- and short-term cash incentive arrangements (usually either wholly discretionary or EBITDA linked), equity (or phantom equity) arrangements (usually with malus, forfeiture and clawback rules, as well as restrictions on share sales).

The tax implications of executive compensation depend upon the type of compensation. Under qualifying schemes, the grant of shares is taxable to the employee at the date they obtain beneficial ownership of the shares and tax is paid at the marginal tax rate (up to 39%). Employers may be able to claim a corporate tax deduction in the same amount. Any subsequent growth in value is generally considered a tax-free capital gain.

Change-of-control provisions are less common in New Zealand than many other jurisdictions, primarily because of the size of the New Zealand market. The typical change-of-control arrangement, if applicable, would be an immediate vesting of share grants or options, or similar, in the event of termination following a change of control.

Restrictive Covenants

Post-employment restraints of trade (such as non-competition, non-dealing, non-solicitation, non-interference and non-poaching covenants) are commonly included in executive employment agreements. New Zealand courts will enforce such covenants only to the extent that they are necessary to protect a legitimate proprietary interest of the employer and therefore need to be reasonable in terms of duration, geographic scope (if relevant), and the activities restricted. The size of the New Zealand market (both with respect to the need for a restraint, and the employee’s ability to work elsewhere) will be relevant.

Forms of Land Ownership

The principal forms of land ownership include the following.

• Freehold (fee simple) – this is the preferred form of ownership. The registered owner owns the land, and anything permanently attached to it, with no time limit. They can sell it, lease it, mortgage it or leave it by will.
• Leasehold – the registered owner has a right of exclusive possession in respect of the relevant land for a set period of time or term, under the terms of a lease document.
• Cross-lease (a form of ownership common in residential property) – each owner holds an undivided share (as tenant in common) in the freehold of the head title, together with the other owners, and a long-term lease over their own dwelling, plus any areas set aside for their exclusive use.
• Unit titles (under the Unit Titles Act 2010) – the owner of fee simple or leasehold land can subdivide their land to create a unit title development – commonly apartments, townhouses and other multi-unit developments. Each owner holds a principal unit (designed for use as a place of residence or business etc) and the common property is owned and managed by the body corporate. The body corporate is made up of the owners of each principal unit within the development.

Restrictions of buying real property in New Zealand

Under the OIA, “sensitive land” includes:

• all residential land;
• non-urban land of over five hectares; and
• foreshore, lakes, heritage, wāhi tapu and some reserves over 0.4 hectares.

The consent pathways for an overseas person purchasing sensitive land are:

• the “national interest test” – applies to transactions involving significant business assets and sensitive land, other than farm land and most residential land;
• the “benefit to New Zealand test” – applies to transactions involving sensitive land that do not fall within another pathway; the “farm land benefit test” will apply to farmland; and
• the “commitment to reside in New Zealand test” – applies in respect of residential land.

The OIA also includes certain exemptions, some of which apply to all types of overseas investment and others which are only available for particular investment pathways. These are as follows.

• Internal restructuring of any overseas person where there is no material change in ownership.
• Investment in sensitive land by an overseas person if the interest acquired is, or will be, relationship property of the overseas person and his or her spouse, civil union partner or de facto partner who is not an overseas person.
• Transfer of sensitive land from executor to beneficiary under a will.
• Permitted security arrangements (but not extending to the exercise of the security in land).

There are no additional taxes or levies payable by a non-resident purchaser beyond the general land transfer and income tax rules, though the “bright-line” test imposes income tax on gains from the sale of residential property within specified holding periods.

Land Registration System

New Zealand operates a Torrens title system under the Land Transfer Act 2017, with most land titles maintained on an electronic register by Land Information New Zealand (LINZ).

The Torrens title system is based on a single register for each land holding. Evidence of ownership is “lodged for registration” with LINZ, which records all details and interests affecting that piece of land based on the information provided by the lodging party. The Government guarantees the accuracy of the register, and title is indefeasible upon registration, subject to limited statutory exceptions.

Real property in New Zealand is also governed by the PLA (which contains requirements and rules around leasing, enforcement, mortgages and other property matters) and the RMA (which is the core legislation which deals with the management of the environment and planning requirements in respect of real property).

Sale and Purchase Agreements

The New Zealand market predominately uses the Law Association of New Zealand standard form of Agreement for Sale and Purchase of Real Estate (“Standard Agreement”). The Standard Agreement is designed to be vendor-/purchaser-neutral, including standard-form warranties, a compensation scheme for breach of contract by the vendor and standard purchaser conditions. Purchasers may also consider including conditions which allow for:

• general due diligence;
• title investigation;
• reports from valuers, engineers or builders;
• obtaining finance and insurance approval in respect of the property;
• investigation of any leases or other occupation rights;
• reviewing the Land Information Memorandum from the local council; and
• review of the natural hazards databases and the Hazardous Activities and Industries List to identify any existing contamination on the property for which the purchaser could become liable.

Commercial Mortgages

Mortgages are registered on the relevant record of title through LINZ. For order of priority, please see 6.1 Transaction Financing and Security Interests. If the borrower defaults, the mortgagee must comply with the requirements of the PLA when exercising its power of sale. This includes serving a notice on the borrower (and any other parties with a registered or notified interest) specifying the default and (unless an exception applies) giving the borrower a chance to remedy the default.

Where the default is not remedied, the mortgagee may sell the property, take possession and collect rents, or appoint a receiver. In realising an asset, a mortgagee owes certain persons (including the mortgagor) a duty of reasonable care to obtain the best price reasonably obtainable at the time of sale.

Commercial Leases

Commercial leases are governed by the PLA and general contract law. Any renewal rights must be negotiated and included in the lease. Generally, under a lease, assignment and subletting require the landlord’s prior written consent (which cannot be unreasonably withheld), and rent review mechanisms commonly include market review, CPI adjustments, and fixed percentage increases.

A lease can be cancelled for breach by following the procedures in the PLA, which first require a Landlord to serve notice on the Tenant in respect of the breach. For unpaid rent, the rent must be at least ten working days in arrears, and the tenant must be given at least ten working days to remedy. For other breaches, the tenant must be given a reasonable time to remedy. Tenants may apply to the court for relief against cancellation.

Recent Developments

Seismic risk

Parts of New Zealand are prone to seismic activity. Sale and purchase agreements and commercial leases commonly specify the seismic rating of a property, which is set out as a percentage of the “New Build Standard” (NBS) – ie, a building would be considered earthquake prone if it had a percentage rating of less than 67% NBS. Recent legislative reforms have introduced a more proportionate, risk-based approach to seismic risk, including removal of Auckland and Northland from the Earthquake Prone Building regime due to their low seismic risk.

Resource management and planning

The Government is replacing the RMA with two new statutes. The relevant policy direction focuses on a move towards spatial planning, with the intention of creating more standardised national rules and allowing for more permitted activities and fewer consents. Both statutes will be phased in over four years, with the RMA continuing to apply until around 2030.