New Zealand’s legal system is largely based on the English legal system. The New Zealand legal system comprises two main sources of law.

• Statute law – meaning acts of the New Zealand Parliament (“Acts of Parliament”) and legislative instruments (these are subordinate or secondary legislation; eg, regulations made by the government under powers conferred by an Act of Parliament).
• Common law – this has been developed by judges over time through judicial decisions. The rule of precedent applies in New Zealand, so decisions of higher courts are binding on lower courts, and judges will have regard to other cases that are legally similar. New Zealand has a range of courts that deal with civil and criminal matters. The court system has four tiers (in order of ascending seniority): the District Court, the High Court, the Court of Appeal and the Supreme Court. There are also other specialist courts and tribunals for specific areas of law.

Parliament has supreme authority to override or further develop case law by statute.

New Zealand has no single constitutional document. Many of New Zealand’s constitutional principles exist in common law, and some have been codified in statute (such as the Constitution Act 1986 and the New Zealand Bill of Rights Act 1990).

The exercise, refusal to exercise or purported exercise of a governmental (ie, executive) power or discretion under an Act of Parliament or legislative instrument may be challenged by a person affected by it – this is called “judicial review”. 

Investment by “overseas persons” and their associates in certain categories of assets in New Zealand is regulated under the Overseas Investment Act 2005 (the “OI Act”). The Overseas Investment Office (OIO) is the New Zealand regulator responsible for the administration of the OI Act. Decisions under the OI Act are made either by government ministers or the OIO under delegated authority.

A transaction may require consent from the OIO if an overseas person or associate directly or indirectly acquires an ownership or control interest in:

• significant business assets in New Zealand with a value over NZD100 million (higher thresholds are available in some circumstances);
• “sensitive land”; or
• a fishing quota.

The OI Act also provides for the review of transactions that could pose significant national security and public order risks.

To enforce the OI Act, the OIO has a range of powers:

• to prevent transactions from proceeding;
• to require transactions to be unwound; and
• to impose penalties.

See 7. Foreign Investment/National Security for more information.

The Current Economic/Political/Business Climate and the Near-Term Outlook

According to the World Bank’s “Business Ready” framework, New Zealand continues to rank in the top band for a number of “ease of doing business” dimensions. This ranking reflects New Zealand’s stable governmental and regulatory institutions and its open-market economy.

Consistent with overseas trends, New Zealand’s economy has faced some challenges in recent years, including:

• supply-side disruptions;
• the after-effects of COVID-19-related monetary stimulus, including elevated public debt; and
• the volatility of world commodity prices (New Zealand has a largely export-driven economy).

There are, however, promising indications of economic improvements, with many factors making New Zealand an attractive destination for inbound foreign investment.

New Zealand remains committed to open markets and rules-based trade, given that its economy is largely dependent on international trade. The New Zealand–United Arab Emirates Comprehensive Economic Partnership Agreement (which came into force in August 2025) eliminates tariffs on nearly all New Zealand exports to that market, and aims to promote and protect cross-border investment. A number of other trade agreements have also been signed in the past two years but are not yet in force.

Recent Developments in the Regulation of FDI in New Zealand

In June 2025, the government introduced legislation amending the Overseas Investment Act to streamline the consent process. The Overseas Investment (National Interest Test and Other Matters) Amendment Bill (the “Bill”) is currently before Parliament, with enactment expected by early 2026. The Bill would shift the regime to a risk-based framework, and, as at 24 October 2025, includes:

• consolidating the existing “national interest”, “benefit to New Zealand” and “investor” tests into a single national interest test for investments other than those involving farmland, fishing quota and residential land (where the existing regime will remain), with a statutory timeframe of 15 working days to process low-risk consents;
• delegating most decisions to the OIO, with Ministerial involvement limited to transactions that pose national interest risks; and
• for some investments, OIO consent not being required to increase a greater than 75% ownership interest to up to 100%.

All Transactions

Asset or equity transactions

In broad terms, business acquisitions in New Zealand are typically structured as either equity transactions (eg, acquiring shares in a company that carries on the target business) or asset transactions (ie, acquiring the specific property/assets used in the business). An equity transaction gives the purchaser an indirect economic interest in all of the target entity’s assets and liabilities. If the transaction is structured as an asset sale, the parties can agree which assets and liabilities of the target will be acquired. An asset transaction enables the purchaser to “pick and choose” the desired assets and leave behind potential unwanted liabilities, such as historical tax obligations, as only identified liabilities will be assumed by the purchaser.

Public Companies

Takeovers

A takeover is a regulated form of transaction that involves the acquisition of shares in a “Code company”. Takeovers are regulated by the Takeovers Act 1993 (the “Takeovers Act”) and the Takeovers Regulations 2000 (which include the Takeovers Code) – together known as the “takeovers regime”. A company will be a “Code company” and subject to the takeovers regime if it either:

• is a listed issuer with voting financial products quoted on a licensed market – eg, shares quoted on the New Zealand Exchange (NZX); or
• has 50 or more shareholders and 50 or more share parcels and is “at least medium sized”, meaning that the total assets of the company and its subsidiaries are at least NZD30 million and/or their total annual revenue is at least NZD15 million.

The Takeovers Code restricts any increase in a person’s control of voting rights in a Code company above a 20% ceiling – such increases may only be made by specific methods (eg, by making a formal takeover offer to all shareholders on the same terms). The Takeovers Code also includes provisions designed to ensure transparency of information in the event of a takeover offer.

Schemes of arrangement

A scheme of arrangement (“Scheme”) allows a company a high degree of flexibility to reorganise its share capital with court approval. Schemes may also transfer the rights or obligations of a company. In the context of an acquisition, Schemes are commonly used in New Zealand to transfer the entire share capital of a target public company to an acquirer in exchange for compensation for exiting shareholders.

A Scheme in respect of a Code company requires shareholder approval, including both (i) 75% of the votes cast in each interest class; and (ii) a simple majority of the votes of all shareholders entitled to vote. The basis on which a Scheme is to be put to shareholders must also be approved by the High Court. There is extensive case law establishing the principles that the High Court applies in deciding whether to give that approval. 

The majority of take-private transactions of New Zealand listed companies in recent years have been effected by way of a Scheme. There is a high level of flexibility inherent in the Scheme structure with respect to consideration, conditionality and timeframes, compared to the more prescriptive Takeovers Code processes.

Aside from the regulatory regimes applicable to FDI described in 1.2 Regulatory Framework for FDI and 7. Foreign Investment/National Security, the key regulatory regime that may be relevant is the merger control regime in the Commerce Act 1986 (the “Commerce Act”) – see 6.1 Applicable Regulator and Process Overview. Specific industries (eg, banks, insurers, telecommunications, and oil and gas) are also subject to sector-specific legislation that may require regulatory consents for an acquisition of interests in a regulated business.

The primary legislation that governs companies in New Zealand is the Companies Act 1993, which sets out the powers and duties of directors and the rights and obligations of shareholders. The Companies Act is fairly flexible – see 4.2 Relationship Between Companies and Minority Investors. The government has also announced proposed changes to modernise the Companies Act and further reduce compliance costs.

In addition to companies, other common types of business organisations include limited partnerships (formed under the Limited Partnerships Act 2008), partnerships (formed under common law and the Partnership Law Act 2019) and trusts (formed under equitable principles and the Trusts Act 2019).

For listed issuers, the NZX sets rules for trading and listing on its markets, with the principal rules being contained in the NZX Listing Rules (the “Listing Rules”). The Listing Rules impose mandatory requirements that must be complied with by all issuers listed on the NZX.

The NZX has also published a Corporate Governance Code. This uses a “comply or explain” regime, under which listed issuers must either comply with the recommendations in the Corporate Governance Code or, if they do not comply, explain why in a formal corporate governance statement.

Implications for FDI

One of the key considerations for foreign investors in New Zealand when selecting a corporate or other legal entity form is taxation. As outlined in 9.3 Tax Mitigation Strategies, the acquisition structure (including which legal entity form is utilised) can have a significant impact on what New Zealand tax consequences arise. 

The legal relationship between a company and its minority investors is primarily governed by the Companies Act, which is relatively permissive. In the absence of any additional requirements under the Listing Rules or industry-specific legislation, a company may add to, negate or modify many (but not all) of the governance provisions of the Companies Act by adopting a constitution. A shareholders’ agreement may also include “reserved matters” for which additional approvals are required.

For all companies, Section 174 of the Companies Act gives shareholders a broad right to challenge aspects of the conduct of the affairs of a company that are oppressive, unfairly discriminatory or unfairly prejudicial to them. In addition, Sections 110–115 allow dissenting shareholders in respect of certain key matters to require the company to buy back their shares at a fair and reasonable price.

Minority investors in listed companies have additional protections in the Listing Rules, including that an issuer is prohibited from entering into a “material transaction” (being a transaction involving an aggregate value above 10% of the issuer’s average market capitalisation) with a related party unless the transaction is approved by a simple majority of votes cast by shareholders not involved in the transaction. The Listing Rules also require listed companies to have at least two independent directors and two directors who ordinarily reside in New Zealand (these may be the same individuals, subject to an overall minimum of three directors). The Corporate Governance Code further recommends that a majority of the board be independent directors.

In addition to the OIO approval requirements discussed in 7.1 Applicable Regulator and Process Overview, other disclosure and reporting obligations for FDI when making, holding or disposing of FDI include the following.

• Substantial product holder notices for investments in listed securities – Under the Financial Markets Conduct Act 2013 (FMCA), a person is a “substantial product holder” of a listed issuer if they have a “relevant interest” in 5% or more of a class of the issuer’s quoted voting products (eg, ordinary shares). The term “relevant interest” is defined broadly and includes direct or indirect ownership, control of voting rights and control of acquisition or disposal. A substantial product holder must notify the issuer and the NZX (for public release) when they first become a substantial product holder, when the extent of their relevant interest changes by 1% or more of the total or undergoes a change in nature, or when they cease to be a substantial product holder.
• Financial reporting requirements – Companies that exceed specified asset or revenue thresholds are required to file signed audited financial statements with the Companies Office within five months of each balance date.
• OIO decision summaries – For transactions that require OIO consent, the OIO releases summaries of its decisions on its website in the month following the decision, whether consent was granted or declined. Acquirers may ask the OIO to have sensitive details, such as the consideration paid, redacted on the basis of specified grounds for withholding information, set out in the Official Information Act 1982. These include if disclosure would unreasonably prejudice the commercial position of the applicant in circumstances where there is no overriding public interest in disclosure.

In New Zealand there are both public capital markets, operating through the NZX and other exchanges, and private sources of capital, spanning private equity, venture capital and angel investment.

Besides the more traditional bank financing, private credit funds are also sources of debt financing. The FMCA also provides for peer-to-peer lending services and crowdfunding.

The offer, promotion, issue and sale of financial products (equity securities, debt securities, managed investment products and derivatives) in New Zealand is primarily regulated by the FMCA, which covers:

• fair dealing in financial products and services, including prohibitions on engaging in conduct that is misleading or deceptive or likely to mislead or deceive – or making representations that are false or misleading, or unsubstantiated, in respect of financial products or services (Part 2 of the FMCA);
• disclosure by way of a “Product Disclosure Statement” (similar to a prospectus) in relation to offers of financial products for issue (unless an exclusion applies), and offers for sale in specified circumstances (Part 3 of the FMCA);
• governance of regulated offers of managed investment products and debt securities, and record-keeping duties for all issuers of financial products under regulated offers (Part 4 of the FMCA); and
• dealing in quoted financial products on licensed markets – eg, the NZX Main Board/Debt Market (Part 5 of the FMCA prohibits insider trading and market manipulation, and requires disclosure of relevant interests by substantial product holders, and directors and senior managers of listed issuers).

Any person can trade quoted financial products (via an NZX-accredited broker) on the NZX.

The following key acts and legislative instruments may also be relevant to a foreign investor investing in New Zealand:

• the Takeovers Act and the Takeovers Code (where the target is a “Code company”, which includes a listed company) – see 3.1 Transaction Structures;
• the OI Act and the accompanying regulations (discussed in greater detail in 7. Foreign Investment/National Security); and
• the Listing Rules (where either a relevant party or the target is listed on a licensed market operated by the NZX) – see 4.1 Corporate Governance Framework.

A foreign investor structured as an investment fund would not be subject to any additional regulatory review by reason of being an investment fund. Equally, however, investment funds are subject to the same FDI regulation as other investors (there is no general exception from the requirement for OIO consent by reason of the investor being an investment fund).

New Zealand’s merger control regime is governed by the Commerce Act. The relevant regulator is the New Zealand Commerce Commission (the “Commission”). The Commerce Act generally prohibits mergers or acquisitions that have, or would be likely to have, the effect of substantially lessening competition in a market in New Zealand. 

The Commerce Act also provides for:

• a voluntary clearance regime under which buyers and/or sellers can submit a clearance application seeking confirmation from the Commission that it agrees the transaction would not have, or be likely to have, the effect of substantially lessening competition in a market in New Zealand;
• an authorisation regime under which a transaction that would (or would be likely to) have such an effect (and so would be prohibited) may nonetheless be approved, if the Commission is satisfied that it will in all circumstances result, or be likely to result, in a benefit to the public that would outweigh the lessening in competition that would result, or would be likely to result, from the transaction; and
• the ability of the Commission to seek an injunction restraining a transaction from proceeding if the Commission is concerned that the transaction may substantially lessen competition in any market in New Zealand, and to seek pecuniary penalties and divestment orders (third parties may seek damages), if it is demonstrated that a transaction would have, or would be likely to have, that effect.

Where there is an appreciable risk that the Commission may be concerned that a transaction would be likely to have the effect of substantially lessening competition in a market in New Zealand, it is common practice for sale and purchase agreements to be conditional on clearance from the Commission before the acquisition is implemented. Clearance cannot be granted retrospectively.

The FDI need not have resulted in the foreign investor obtaining total ownership of a New Zealand business for competition concerns to arise. The Commission also considers the effect of any acquisition by “associated persons”. Persons are “associated” if one has a “substantial degree of influence” over the other. This is a factual test for which the proposed shareholding level in the target is not determinative (it can, for example, arise at a minority shareholding level below 10% if other relevant circumstances exist).

There are no specific exemptions for FDI from the merger control regime under the Commerce Act.

Applications

The usual clearance application process starts with the applicant entering into pre-application discussions with the Commission, to outline the relevant markets and rationale for the proposed transaction, enabling the Commission to identify the information that will need to be included in the clearance application for it to be accepted for registration, and to outline key issues and evidentiary requirements to assist the Commission in progressing the application. 

The next step is filing a clearance application in the prescribed form (available on the Commission’s website) and payment of the filing fee (currently NZD3,680). Applications are publicly notified via the Commission’s website (confidentiality may be granted in limited and exceptional circumstances), including a redacted public version of the application. The Commission aims to provide a decision within 40 working days of submission, but complex applications may take in excess of 100 working days.

Investigations

The Commission begins by issuing a statement of preliminary issues and inviting public submissions. It will also undertake its own investigations, including interviews and information requests. The Commission will then either issue a clearance (its target timeframe for this purpose is 40 working days after submission of the application) or publish a further statement of issues and take further submissions. Following further consideration, it will either issue a clearance (its target timeframe for this purpose is 90 working days after submission of the application) or publish a further statement of unresolved issues and take further submissions before issuing a final decision (potentially 100+ working days after submission of the application).

Submissions and determinations are generally made public on the Commission’s website – parties may assert confidentiality or commercial sensitivity in respect of the submission, but ultimately the Commission will determine whether to treat the information as such. The statutory considerations applied in this assessment are the same as for the OIO’s publication of its decision summaries – see 4.3 Disclosure and Reporting Obligations.

If clearance is granted, it provides statutory immunity to the investor in respect of the proposed transaction (subject to the transaction being completed within 12 months of the clearance being granted – outside of this, a new clearance must be applied for). 

As referred to in the foregoing, it is also possible to receive authorisation for transactions that will have, or would be likely to have, the effect of substantially lessening competition in a market in New Zealand but which are likely to result in public benefits that outweigh the lessening of competition. This is similar to, but a more complex and lengthy process than, applying for clearance.

The Commission can investigate any completed transaction for which clearance or authorisation was not obtained, and it conducts market surveillance to this effect. Third parties may also make complaints to the Commission if they believe the Commerce Act has been breached. In practice, the Commission opens investigations on a regular basis.

The Commission must grant clearance in respect of a proposed transaction if it is satisfied that the investment would not be likely to substantially lessen competition in the relevant markets. The Commission uses market concentration indicators as an assessment tool, under which a merger is unlikely to require clearance where, post-merger:

• the three largest firms in the market have a combined market share of less than 70%, and the merged firm’s combined market share is less than 40%; or
• the three largest firms in the market have a combined market share of 70% or more, and the merged firm’s combined market share is less than 20%.

However, the aforementioned concentration indicators have the status of guidance only, and are not safe harbours. Other competition effects, such as vertical and conglomerate effects, also need to be considered. When assessing whether a transaction will, or is likely to, substantially lessen competition, the Commission considers the likely state of competition in the market with the proposed transaction and compares this to potential counterfactual situations (ie, if the transaction did not proceed). The Commission will generally choose the most competitive scenario as the counterfactual to compare against, noting that the counterfactual chosen does not have to be “more likely than not” to occur, but merely “to have a real chance” of occurring.

During this assessment, the Commission also considers factors such as the overlap between existing and future competitors, vertical integration and changes to supply chains, and the potential for co-ordinated conduct among competitors.

The Commission is only able to accept structural remedies in order to approve a merger. Specifically, this means a divestment of assets or shares. Ancillary contractual arrangements can only be taken into account in the context of any such divestment as part of the Commission’s factual consideration. However, the Commission does not accept behavioural undertakings as conditions that might enable it to approve a merger.

If the Commission is alerted to a transaction that may substantially lessen competition in a market (and for which no clearance has been sought), it can launch an investigation. If the transaction has not yet completed, the Commission may also seek an undertaking that the transaction will not be completed until the Commission has completed its investigation. If either party refuses to provide such an undertaking, the Commission can seek an injunction from the High Court in line with the requested undertaking.

If the Commission ultimately forms the view that the transaction would or did give rise to (or is or was likely to give rise to) a substantial lessening of competition in a market, it can seek pecuniary penalties and divestment orders from the High Court. The maximum pecuniary penalty for a body corporate is the greater of:

• NZD10 million; or
• three times the commercial gain resulting from the contravention or (if that cannot readily be ascertained) 10% of the turnover of the person that contravened the Commerce Act and its interconnected bodies corporate.

Overseas Investment Regulation

Investments by “overseas persons” and their associates in certain categories of assets in New Zealand are regulated under the OI Act. The OIO is the New Zealand regulator responsible for the administration of the OI Act. Decisions under the OI Act are made either by government ministers or by the OIO under delegated authority.

In broad terms, an “overseas person” is any person that is:

• not a New Zealand citizen, nor ordinarily resident in New Zealand;
• a body corporate that is incorporated outside New Zealand or is a “more than 25% subsidiary” of a body corporate incorporated outside New Zealand; or
• a body corporate, partnership or trust that is more than 25% owned or controlled by overseas persons.

Companies listed on the NZX have a higher threshold for being an “overseas person” – namely, if overseas persons have a beneficial interest in 50% or more of the listed company’s shares, or if overseas persons who each hold more than 10% of the listed company’s shares between them have the right to exercise more than 25% of the voting rights attached to the shares, or to control the composition of 50% or more of the board, of the listed company.

Transactions Requiring Consent

OIO consent may be required before giving effect to a transaction in which an overseas person directly or indirectly acquires an interest in:

• significant business assets (“Significant Business Assets Consent”);
• sensitive land (“Sensitive Land Consent”); or
• a fishing quota.

The OI Act also provides for review of transactions involving “strategically important businesses” (SIBs), even if the transactions would not otherwise require OIO consent as outlined in the foregoing, under the National Security and Public Order notification regime (the “NSPO Regime”).

The aforementioned consent requirements apply regardless of whether the transaction occurs, or the interest is acquired, directly or indirectly. That is, an overseas transaction affecting a corporate group that has an interest in significant business assets or sensitive land at a subsidiary level may still require OIO consent.

Timeframes

The timeframes for an assessment by the OIO (and ministers, if applicable) of a consent application depend on the nature of the asset involved. For example, the OIO has a target timeframe for Significant Business Assets Consent of 35 working days, whereas a Sensitive Land Consent involving farmland has a target timeframe of 100 working days. These timeframes exclude time while the OIO is waiting for information from, or action by, the applicant. The government has directed the OIO to complete its review of 80% of applications within half of these timeframes. If the current amendment Bill (as at 24 October 2025) is passed, the statutory timeframe for the OIO to grant consent for low-risk applications will generally be 15 working days.

Significant Business Assets Consent

Significant Business Assets Consent will be required where an overseas person or an associate directly or indirectly:

• acquires more than a 25% ownership or control interest in the securities of a person, and the value of the securities or consideration provided for them, or the gross value of the New Zealand assets of the person and its 25% or more subsidiaries, exceeds NZD100 million (consent will also be required at the 50%, 75% and 100% levels, but if the amendment Bill is passed, the requirement for consent before increasing ownership from 75% or more to 100% will only apply if the target is a SIB);
• acquires New Zealand assets used in carrying on business in New Zealand, and the total value of the consideration provided exceeds NZD100 million; or
• establishes a business in New Zealand for which the total expenditure expected to be incurred before commencing the business exceeds NZD100 million.

Higher monetary thresholds are available for some investors from countries with free trade agreements with New Zealand. For example, qualifying Australian non-governmental investors have a higher threshold of NZD676 million, and qualifying EU and UK investors have a higher threshold of NZD200 million.

To receive Significant Business Assets Consent, the relevant investors must satisfy the “Investor Test” (see the following). Some transactions may also be required to satisfy the “National Interest Test” (see the following).

Sensitive Land Consent

Sensitive Land Consent will be required where an overseas person or associate acquires (directly or indirectly) an interest in land that is “sensitive” under the OI Act, where that interest is a freehold estate, or a lease or other interest with a term of ten years or more (including any rights of renewal), or three years if the land is residential land. The criteria for receiving Sensitive Land Consent depend on the type of sensitive land involved.

Residential land

Overseas persons cannot usually acquire residential land unless they are a New Zealand citizen or have a residence class visa (Australian and Singaporean citizens may receive consent in certain circumstances). There are exceptions for new builds, “one home to live in” and land that is only incidentally residential (eg, acquiring a farm business that includes a farmhouse). In September 2025, the government announced a further proposed change to the OI Act, which, if the Bill is passed with this provision included, will allow overseas persons with specified classes of residency visa to buy or build a house valued at NZD5 million or more.

Other sensitive land

Applicants will be required to satisfy the “Investor Test” (see the following) and the “Benefit to New Zealand Test” for acquisitions of sensitive land that do not involve residential land, forestry or farmland.

To satisfy the Benefit to New Zealand Test, the applicant must show that the overseas investment will, or is likely to, benefit New Zealand (or any part of it or group of New Zealanders) to a degree that is proportionate to the sensitivity of the relevant land (including the features of the land and public interest) and the nature of the transaction (including whether the interest acquired is permanent or temporary). The following factors must be considered in assessing the benefit of the transaction:

• economic benefits;
• benefits to New Zealand’s natural environment;
• whether New Zealanders gain or retain access to the land;
• whether historical sites are protected and accessible;
• whether government policy is assisted;
• oversight or participation of New Zealanders; and
• any other consequential benefits.

Farmland

For an acquisition of farmland that exceeds five hectares, the applicant must also show a “substantial” benefit in relation to the factors of “economic benefits” and/or “oversight or participation of New Zealanders”. Farmland is also generally required to be offered to New Zealanders on the open market before it may be acquired by an overseas person.

Forestry

A streamlined alternative is available for certain investments in land used principally for forestry (notably, this is not available for farmland-to-forestry conversions). To satisfy this alternative test, an applicant must use the land nearly exclusively for forestry activities, replant the land after harvesting and not live on the land. While the applicant does not need to show a benefit (as required under the Benefit to New Zealand Test), certain arrangements may be required to be maintained, such as public access and protection of indigenous habitat and historical places. 

Investor Test

An applicant for Significant Business Assets Consent or Sensitive Land Consent must satisfy the “Investor Test”. The Investor Test assesses whether the applicant and the individuals with control are suitable to own or control sensitive New Zealand assets. The assessment relates to specific factors indicating the character and capability of the applicant, including any previous convictions, fines, prohibitions on directorship, civil penalties or material unpaid taxes.

Repeat investors need not satisfy the Investor Test each time they apply for consent, provided that no substantial changes have occurred since the last time they obtained consent.

National Interest Test

The “National Interest Test” allows for consideration of whether some categories of proposed investment that require OIO consent are contrary to New Zealand’s national interest. This applies if the transaction requires OIO consent and:

• involves a SIB (see the following);
• involves a foreign government investor acquiring more than a 25% interest as a result of the transaction (notably, this can capture foreign public sector superannuation funds); or
• the minister determines that it should be the subject of a national interest assessment.

NSPO Regime and SIBs

The government also has powers under the NSPO Regime to review investments in SIBs, even where the investment does not require OIO consent (ie, it does not involve significant business assets, sensitive land or a fishing quota). This includes reviewing a transaction after it has been completed. In practice, this means the ministers could block or impose conditions on a transaction, or order the disposal of the assets in question, should the investment be found to pose significant risks to New Zealand’s national security and public order. However, the government has publicly stated that this power is “expected to be rarely used... The test’s, and the Government’s, starting point is that investment is in New Zealand’s national interest”.

In broad terms, SIBs are:

• critical direct suppliers to the New Zealand Defence Force or an intelligence or security agency (“Critical Direct Supplier”);
• involved in military or dual-use technology;
• involved in ports or airports;
• specified types of electricity, water, or telecommunications providers;
• major financial institutions or involved in financial market infrastructure;
• media businesses with significant impact;
• involved in a strategically important irrigation scheme; or
• a business that develops, produces, maintains or otherwise has access to “sensitive information” relating to 30,000 or more individuals (sensitive information includes the genetic, biometric, health or financial information of individuals, or relates to the sexual orientation or sexual behaviour of individuals).

Mandatory prior notification to the OIO is required for an investment in a Critical Direct Supplier or an SIB involved in military or dual-use technology. Although the OI Act refers to this as a “notification” obligation, it further specifies that the transaction may not proceed without approval (ie, this is in substance a consent requirement). 

For all other categories of SIBs, notification is voluntary. Investors who notify the OIO voluntarily through the NSPO Regime may obtain “safe harbour” from later intervention if the OIO’s initial review finds that the proposed investment does not pose significant risks to New Zealand’s national security and public order. Once the OIO has made such a decision on a voluntarily notified transaction, it may not revisit that transaction except on limited prescribed grounds (eg, if the notification contained false or misleading information).

In granting consent for an overseas investment, the OIO always imposes standard conditions, including that the information provided by the applicant is correct and the applicant complies with any representations or plans submitted in support of the application. The OIO also has wide discretion to impose further special conditions on the consent.

The OIO can block overseas investments where an application for consent has been made. In this situation, the OIO will notify the applicant of its intention to decline the application. The applicant will then have 15 working days to provide further information before a final assessment is made. If OIO consent is required for a transaction, proceeding without consent is a criminal offence.

If an investor breaches the OI Act (eg, by proceeding without consent where it is required), the OIO has a range of enforcement tools available, including issuing disposal notices. Enforceable undertakings may also be voluntarily given to address breaches, in lieu of more serious enforcement action by the OIO.

For more serious breaches, the OIO may (through court action) also seek injunctions, orders requiring compliance with the OI Act, criminal penalties or civil pecuniary penalties. Civil proceedings may result in orders for the disposal of property, and penalties of up to NZD500,000 for individuals, or NZD10 million or three times the quantifiable gain in any other case. Criminal proceedings may result in up to 12 months’ imprisonment or a fine of up to NZD300,000.

A summary of any warnings issued or enforcement action taken by the OIO is made available to the public on the OIO’s website.

As a United Nations member state, New Zealand is bound by the decisions of the United Nations Security Council (UNSC). New Zealand has implemented UNSC sanctions through regulations made under the (domestic) United Nations Act 1946. New Zealand persons are required to comply with such domestic regulations.

In addition to UNSC sanctions, New Zealand also has standalone legislation that imposes sanctions independently of the UNSC, to deal with circumstances where the UNSC is unlikely or unable to act. An example is the Russia Sanctions Act 2022, which imposed sanctions in response to the military actions by Russia in Ukraine. New Zealand legislation also provides for further measures such as travel bans on certain individuals entering the country.

New Zealand does not restrict foreign exchange transactions (other than the usual anti-money laundering procedures in line with international treaties).

Overview

New Zealand-resident companies are taxed on their worldwide income, while non-resident companies and their New Zealand branches are generally taxed only on their New Zealand-sourced income. The current corporate income tax rate is 28%. New Zealand is a party to a number of tax treaties (with 41 currently in force), under which taxing rights are most commonly allocated to the taxpayer’s country of residence (with limited taxing rights generally retained by the country in which the income is sourced, particularly with respect to passive income such as dividends, interest and royalties).

Income Tax

Companies pay income tax in their own right. Income tax paid by companies generally gives rise to non-refundable tax credits for their domestic shareholders, which can be used to reduce (or, in certain circumstances, eliminate) withholding tax on dividends. These are known as “imputation credits” (see 9.2 Withholding Taxes on Dividends, Interest, Etc).

By contrast, for income tax purposes, a partner in a partnership (including a limited partnership) is treated as carrying on the partnership’s activities, having its intentions and purposes, holding its property and being a party to its agreements/arrangements. The partnership itself is generally disregarded. Thus, if a partner disposes of some or all of its interest in the partnership, it is generally treated as directly disposing of a proportionate share of the partnership’s assets and liabilities. This can give rise to a complex disposal (gain/loss) calculation (although a safe-harbour rule can apply in certain circumstances to allow an entering partner to “step into the exiting partner’s shoes”).

Other Taxes

Unlike many other Commonwealth countries, New Zealand does not have a comprehensive capital gains tax (CGT), although capital gains are subject to tax in certain circumstances (eg, financial arrangements and land). Similarly, New Zealand does not currently impose land tax, inheritance tax, wealth tax, gift duty, stamp duty or gross-basis transfer tax.

On 28 October 2025, the opposition New Zealand Labour party announced that for the 2026 general election it will be campaigning on a limited CGT, proposed to take effect in respect of gains made on and from 1 July 2027 at a flat rate of 28%. Broadly, the proposed CGT would tax gains made on commercial and residential property sales, but would exempt family homes, farms, shares/business assets/KiwiSaver, inheritances and personal items. The details of the policy are yet to be released. 

Withholding tax is generally deducted from non-resident companies’ New Zealand passive income, such as dividends, interest and royalties. Rates of withholding tax vary under domestic law; dividends are generally subject to withholding tax at 30%, and interest and royalties at 15%. These rates are often reduced under New Zealand’s tax treaties to 0–15% for dividends, 10% for interest and 5% for royalties. Traditional principles/rules in relation to “beneficial ownership”, economic substance and “treaty shopping” are generally relevant to New Zealand’s tax treaties.

Imputation Credits

New Zealand has an imputation credit regime, which is broadly similar to Australia’s “franking credit” regime. Imputation credits can be “attached” to dividends at a maximum ratio of 28:72, in line with the corporate tax rate (known as “fully-imputed” dividends). To the extent that fully imputed dividends are paid by New Zealand-resident companies to non-portfolio foreign shareholders, the applicable withholding tax is generally 0% under domestic law.

Approved Issuer Levy

In addition, where interest is paid by a New Zealand borrower to an unrelated non-resident lender, it is generally possible for the debt to be registered as a security with the New Zealand tax authority and the Inland Revenue Department, and for a 2% “approved issuer levy” (AIL) to apply in place of withholding tax. AIL is imposed on the New Zealand borrower, and is generally allowed as an income tax deduction (resulting in an effective 1.44% post-tax borrowing cost from AIL).

There are various strategies that can be employed to mitigate New Zealand tax liabilities. These include the following.

• Carefully considering the investment/acquisition structure – with an asset transaction (see 3.1 Transaction Structures), the tax-depreciable cost base of fixed assets can usually be reset based on an agreed-upon purchase price allocation. By contrast, with a share transaction, the tax-depreciable cost base cannot be reset (unlike in some other countries, where applications or elections can be filed to align the tax-depreciable cost base of fixed assets with the purchase price for the shares in the company).
• A recently implemented “Investment Boost” regime allows an upfront deduction of 20% to be taken for the cost of many new depreciable assets that first become available for use on or after 22 May 2025. The standard tax depreciation deduction is still claimable in the year of purchase and in subsequent years.
• New Zealand companies can generally claim tax deductions for arm’s length interest, rents, royalties, management fees, etc, subject to transfer pricing rules and anti-hybrid rules (see 9.5 Anti-Evasion Regimes).
• While debt can be pushed down to New Zealand holding companies, the thin capitalisation (interest limitation) rules operate in substance to disallow a tax deduction for interest to the extent that a foreign-controlled New Zealand taxpayer is too highly geared (unless such gearing is proportionate with the taxpayer’s worldwide group). In general, a foreign-owned New Zealand taxpayer’s interest-bearing debt cannot exceed 60% of its net assets, or 110% of the debt-to-net assets ratio of its worldwide group, without a tax deduction for interest expenditure effectively being denied. Concessions apply to third-party limited recourse debt used in Crown-sponsored PPP projects. The Inland Revenue is currently consulting on two options that could expand this to some private investment by non-resident investors.
• If there is a change in a company’s ultimate shareholding of more than 51%, net operating losses (NOLs) can only be carried forward and used to offset future taxable income if the company has sufficient “business continuity” until the earlier of: (i) the end of the income year in which the company’s tax losses have been used; or (ii) five years after the more-than-51% change in the company’s ultimate shareholding. As such, NOLs have the potential to be a valuable tax attribute that can be priced into M&A transactions in New Zealand.
• As New Zealand does not have a comprehensive CGT, intellectual property can potentially be “exported” to lower-tax countries without a blanket exit charge applying.

Unlike some other countries, New Zealand does not have tax-preferred entities/vehicles that are available to non-resident investors (eg, real estate investment trusts). Investments are generally held through New Zealand companies or, where appropriate, branches or partnerships.

While New Zealand does not have a comprehensive CGT (see 9.1 Taxation of Business Activities), gains from the disposal of capital assets are, in certain circumstances, subject to tax. For example, gains from the disposal of land are taxable in New Zealand if the land is acquired with any intention or purpose of disposal; and tax treaty relief is generally not available (and refer to 9.1 Taxation of Business Activities – Other Taxes regarding the New Zealand Labour Party’s proposed limited CGT). In addition, gains from the disposal of personal property (eg, shares) are taxable under domestic law if acquired with a dominant purpose of disposal, or if acquired and disposed of as part of a profit-making undertaking or scheme. Where such gains are derived by non-residents, tax treaty relief may be available (noting that relief is not automatic, so if there is an applicable tax treaty, its terms must be carefully reviewed).

Foreign-owned New Zealand tax-paying entities are generally subject to specific anti-avoidance rules, including “restricted transfer pricing” rules, thin capitalisation rules (see 9.3 Tax Mitigation Strategies), and hybrid and branch mismatch rules (which were enacted – or revised – in 2018 as part of New Zealand’s response to the OECD’s “base erosion and profit shifting” initiative).

Transfer Pricing Rules

New Zealand’s general transfer pricing rules are based on a notional arm’s length standard, and are intended to prevent non-residents and their New Zealand subsidiaries from eroding New Zealand’s tax base via non-arm’s length arrangements. The “restricted transfer pricing” rules specifically apply to inbound related-party debt of NZD10 million or more, and provide a detailed framework within which interest rates are required to be set by reference to the borrowers’ (and their worldwide groups’) credit ratings, and ignoring certain terms that would otherwise affect pricing.

Hybrid and Branch Mismatch Rules

In addition, the hybrid and branch mismatch rules aim to prevent taxpayers from benefiting from different countries’ tax systems by obtaining “double deductions” for the same expenditure, or taking tax deductions for expenditure in New Zealand that is not captured as income in another country. These rules are similar to the equivalent rules in the UK and Australia.

Permanent Establishment (PE) Avoidance Rule

A PE avoidance rule was also introduced in 2018, which, in general terms, can deem a non-resident to have a PE in New Zealand for tax purposes if its employees or related parties carry out activities in New Zealand to facilitate the non-resident’s sales in New Zealand, where such activities do not give rise to a PE under an applicable tax treaty.

Pillar Two

With effect from 1 January 2025, New Zealand implemented the OECD’s Pillar Two framework by introducing the Income Inclusion Rule (IIR) and the Undertaxed Profits Rule (UTPR). Pillar Two is designed to ensure that profits of large multinational enterprises (MNEs), with annual revenues exceeding EUR750 million, are taxed at a minimum level of 15% regardless of where they are reported. Additionally, a Domestic Income Inclusion Rule (DIIR) will apply from 1 January 2026, targeting New Zealand-headquartered MNEs to ensure consistent treatment of domestic and foreign income under the global minimum tax regime.

General Anti-Avoidance Rule

New Zealand also has a general anti-avoidance rule, and a number of other specific anti-avoidance rules (eg, to prevent dividend “stripping” and inappropriate sharing/use of tax losses).

Employment relationships in New Zealand are principally governed by the Employment Relations Act 2000 (the “ER Act”), which confers a minimum set of employment-related entitlements on employees. Subject to the minimum entitlements provided for in the ER Act and other employment-related legislation, employees and employers are free to enter into “individual” employment agreements on terms agreed between them.

The ER Act also provides legal recognition to unions. Under the ER Act, unions are the only parties able to negotiate, and be a party to, a “collective” employment agreement with an employer. Employees must be union members to remain party to a collective agreement.

Common forms of compensation for employees in New Zealand are cash and KiwiSaver contributions and, less commonly, equity in the employing entity (eg, shares or options to purchase shares). Key statutory benefits for employees in New Zealand include the following.

• Minimum wage rates are set by legislation and are reviewed annually. On 1 April 2025, the adult minimum wage was set at NZD23.50 per hour.
• Employees are entitled to a minimum of four weeks of annual leave each year.
• Employers are required to pay ten days’ sick leave for each 12-month period to employees who are off work for illness or injury. New Zealand’s no-fault Accident Compensation Corporation scheme will also provide up to 80% of an employee’s income on an employer’s behalf for leave resulting from injuries sustained at work.
• Employers are required to make contributions to KiwiSaver (New Zealand’s voluntary national work-based retirement savings scheme) if employees have enrolled in it. The minimum employer contribution rate is 3%. The default contribution rate will rise to 3.5% for employers on 1 April 2026 and to 4% from 1 April 2028.

Share Sale – Change of Control of the Employer

In New Zealand, there is generally no effect on an employee’s employment or compensation in a share sale, as the employing entity remains unchanged (despite a change of control of that entity). Change-of-control clauses in employment agreements are not common in New Zealand, but they can be included as negotiated terms between the employer and employee. These clauses are more common in executive or senior management employment contracts.

In some transactions, employee incentives may be used to ensure a smooth transition and to retain key staff members in the business. Again, such incentives are more common for executives or senior managers.

Asset Sale – Offer of Employment by the Purchaser

As discussed in 3.1 Transaction Structures, in an asset sale, employment agreements cannot be transferred by the employer as of right. Except in the case of “vulnerable employees” (see 10.3 Employment Protection), if the purchaser wishes to employ the target’s employees, the purchaser will need to offer new employment to them. Sale and purchase agreements will often require the purchaser to offer employment on terms no less favourable than the current terms of employment, to limit the vendor’s exposure to costs resulting from termination of employment.

All employment agreements in New Zealand must contain an “employee protection provision” to apply in the event an employer proposes to sell or restructure its business. While this is not a mandatory right to transfer employment, it may include provisions such as that the employer will keep the employee informed and facilitate discussions with the new employer.

In addition, “vulnerable employees” (as defined in the ER Act) are afforded a higher level of statutory protection in the event of an acquisition. These are employees at greater risk of losing their jobs due to their lack of bargaining power, and because they are working in sectors where the work is often contracted or transferred out. The additional protections for vulnerable employees include the right for those employees to choose to transfer over to the new employer on the same terms and conditions of employment.

Depending on the specific sector that intellectual property rights apply to (such as military or dual-use technology), acquisition of intellectual property may amount to investment in a SIB, and may result in the transaction being subject to the call-in NSPO Regime or the National Interest Test under the OI Act (see 7.2 Criteria for Review).

New Zealand provides strong intellectual property protections in line with international treaties. Protections apply in relation to registrable rights (trade marks, designs, patents, geographical indications and plant varieties) and unregistrable rights (copyright).

Applications for registrable rights are assessed by the Intellectual Property Office of New Zealand (IPONZ). Alternatively, an international application can be made identifying New Zealand as a designated country in relation to trade marks, designs and patents. There are no restrictions regarding nationality or residency for applications in relation to registrable rights, but a New Zealand address for service must be provided in an application to IPONZ.

Copyright is an automatic right under New Zealand law. Protection is afforded under the Copyright Act 1994, with the length of protection varying depending on the nature of the work.

The Copyright Act 1994 includes provisions for the protection of literary, dramatic, musical or artistic work that is “computer-generated”, in which case the first owner of copyright is, ordinarily, the person who undertakes the “arrangements necessary for the creation of the work”. This can encompass a work that has been produced by an AI model with parameters provided by a natural person (subject to the terms of use of that AI model).

The Privacy Act 2020 (the “Privacy Act”) is the primary legislation that applies in relation to data protection in New Zealand. The Privacy Act applies a principles-based approach, prescribing obligations for agencies (including businesses) dealing with personal information.

The term “agencies” is defined broadly under the Privacy Act, and divided into New Zealand agencies and overseas agencies. A New Zealand agency includes an individual who is ordinarily resident in New Zealand, a public sector agency, a New Zealand private sector agency (such as a private business), a court or a tribunal. “Overseas agencies” include an overseas entity that is not a New Zealand agency, the government of an overseas country (or an overseas government entity performing a public function), nor a news entity to the extent it is carrying on news activities.

The Privacy Act applies to overseas agencies carrying on business in New Zealand, in respect of personal information collected or held by that agency. The criteria for an overseas agency to be found to be “carrying on business” in New Zealand are broad, requiring a holistic assessment of the agency’s activities. An agency can be “carrying on business in New Zealand” without having a place of business in New Zealand. The Privacy Act applies regardless of where information is collected or held, or where the individual concerned is located.

The Office of the Privacy Commissioner is the primary regulator for data protection/privacy in New Zealand and is responsible for undertaking investigations in relation to suspected breaches of the Privacy Act. Where a settlement cannot be reached between the entities, the matter may be referred to the Human Rights Review Tribunal (HRRT). The HRRT may grant a range of remedies including orders restraining or requiring the performance of an activity, and payment of damages.

The Consumer and Product Data Act 2025 established a Consumer Data Right, enabling customers in certain sectors to securely share data and initiate actions like payments with accredited third parties, to promote competition and choice.