Foreigners wishing to purchase non-urban land must obtain prior consent for the transaction. Consent is not required in case of an acquisition of a forestry right when the area of the relevant forestry right is less than 1 000 hectares.
On 16 August 2022, the Overseas Investment (Forestry) Amendment Act 2022 entered into force. Among others, the Amendment Act strengthens the rules relating to overseas investment that result in the conversion of land to production forestry. The main modification is the removal of forestry conversions from the Overseas Investment Act 2005’s ‘special forestry test’, and to instead apply the ‘benefit to New Zealand’ test to these investments. The change seeks to ensure that forestry conversions by overseas investors continue to bring broad benefits to New Zealand. The Amendment Act also makes several minor changes and technical clarifications to improve the Overseas Investment Act 2005’s existing forestry provisions.
"16A Benefit to New Zealand test [...]
General test
(1) The benefit to New Zealand test is met if both of the following are met:
(a) the overseas investment will, or is likely to, benefit New Zealand (or any part of it or group of New Zealanders) to the extent required by this section, as determined by the relevant Ministers under section 17; and
(b) if the relevant land is or includes residential land, the relevant Ministers are satisfied that the conditions that the relevant Ministers will impose on the consent in accordance with section 16B will be, or are likely to be, met.
Modified benefit test if relevant land is or includes farm land
(1C) If the relevant land is or includes farm land that in area exceeds 5 hectares, the relevant Ministers must—
(a) give the following factors high relative importance:
(i) the economic benefits factor in section 17(1)﻿(a) and, in particular, the creation or retention of jobs, introduction of technology or business skills, increased export receipts, and increased processing of primary products; and 
(ii) the oversight or participation factor in section 17(1)﻿(f); and 
(b) ensure that the applicant has demonstrated, in relation to 1 or more of those factors, that the benefits of the investment are of a size or nature that represent a substantial benefit to New Zealand. [...]
(2) Subsection (1C) does not apply if the relevant Ministers are satisfied—
(a) that, as a result of the overseas investment, the farm land will, or is likely to, be used exclusively, or nearly exclusively, for forestry activities; and
(b) that, whenever a crop of trees is harvested on the farm land, a new crop will be, or is likely to be, established on the farm land to replace the crop that is harvested (subject to subsection (7)); and
(c) that the non-occupation outcome will, or is likely to, occur in relation to the farm land (where that outcome in clause 17(3) to (5) of Schedule 2 applies with necessary modifications as if the reference to residential land were a reference to the farm land).
[...]
Special test relating to forestry activities
(4) Regulations may provide that the benefit to New Zealand test is also met if the relevant Ministers are satisfied—
(a) that the relevant land is already used when the transaction is entered into, and will continue to be used, exclusively, or nearly exclusively, for forestry activities; and
(b) that—
(i) the relevant land is not residential land only; and
(ii) if the relevant land includes any residential land, the residential land adjoins other land that is included in the relevant land but is not residential land; and
(c) that the non-occupation outcome will, or is likely to, occur in relation to the relevant land (where that outcome in clause 17(3) to (5) of Schedule 2 applies with necessary modifications as if the reference to residential land were a reference to the relevant land); and [...]
(4A) To avoid doubt, the reference in subsection (2)﻿(a) to the use of the farm land and the reference in subsection (4)﻿(a) to the use of the relevant land mean the use that arises under the estate or interest referred to in section 12(1)﻿(a).
[...]
Definitions
(9) In this section,— adjoins includes separated only by a public road (including a motorway or a State highway, and whether or not the road is formed)
forestry activities means any of the following activities in respect of any trees (whether exotic or native) that are to be harvested to provide wood:
(a) maintaining a crop of trees:
(b) harvesting a crop of trees:
(c) maintaining the land during the period between harvesting a crop of trees and establishing a new crop of trees:
(d) establishing a crop of trees.
[...]
16B Conditions for consents relating to sensitive land that is residential land: benefit to New Zealand test
(1) This section applies if an application for consent for an overseas investment in sensitive land is being considered under the benefit to New Zealand test and the relevant land is or includes residential land.
(2) However, this section does not apply (and see instead section 16C)—
(a) to the extent that the relevant land is farm land and the relevant Ministers are satisfied in accordance with section 16A(2); or
(b) where the application is being considered in accordance with section 16A(4). [...]
[...]
16C Conditions for consents relating to sensitive land that will be used for forestry activities
(1) Subsection (2) applies if an application for consent for an overseas investment in sensitive land is being considered under the benefit to New Zealand test, to the extent that the relevant land is farm land and the relevant Ministers are satisfied in accordance with section 16A(2).
(2) If granted, the consent must be made subject to conditions for the purpose of ensuring that the requirements set out in section 16A(2) will be met, subject to section 16A(7). [...]
[...]
17 Factors for assessing benefit of overseas investments in sensitive land
What are the factors
(1) The factors for assessing the benefit of overseas investments in sensitive land are whether the overseas investment will, or is likely to,—
(a) result in economic benefits for New Zealand (for example, the creation or retention of jobs, the introduction of technology or business skills, increases in productivity or export receipts, or a reduced risk of illiquid assets):
(b) result in benefits to the natural environment (for example, protection of indigenous flora and fauna or erosion control):
(c) result in continued or enhanced access by the public, or any section of the public, within or over the sensitive land or the features giving rise to the sensitivity (for example, access for recreational purposes or for the purposes of undertaking stewardship of, or exercising kaitiakitanga in relation to, cultural heritage or the natural environment):
(d) result in continued or enhanced protection of cultural heritage in or on the relevant land (for example, agreement to execute a heritage covenant (or comply with existing covenants), agreement to support entry to wāhi tūpuna, wāhi tapu, or wāhi tapu areas on the New Zealand Heritage List/ Rārangi Kōrero, taking other actions under the Heritage New Zealand Pouhere Taonga Act 2014 to recognise or protect heritage values, or agreement to land being set apart as a Māori reservation):
(e) give effect to or advance a significant Government policy:
(f) involve oversight of, or participation in, the overseas investment or any relevant overseas person by persons who are not overseas persons:
(g) result in other consequential benefits to New Zealand.
Schedule 3 - Exemptions from requirement for consent
Exemptions in respect of overseas investments in sensitive land involving forestry rights
6 Area of forestry right less than 1 000 hectares
[...]
(4) Subclause (1) or (3) (as the case may be) does not apply if, immediately after the relevant forestry investment is given effect to, the sum of the following areas is 1 000 hectares or more:
(a) the area of the relevant forestry right:
(b) the combined area of all unconsented forestry rights—
(i) that related forestry investors acquire (or are treated as acquiring) in the same calendar year as that in which the relevant forestry investment is given effect to; and
(ii) that are for a total term (as calculated in accordance with Schedule 1A) of 10 years or more. [...]
[...]
(7) In this clause, unconsented forestry right means a forestry right that is acquired otherwise than in reliance on any of the following:
(a) a consent:
(b) an exemption in, or an exemption granted under, this Act or the regulations (other than an exemption under this clause)." (Overseas Investment Act (2005 No 82); last amended on 16 August 2022; Sections 16A, 16B, 16C and 17; Schedule 3, Section 6)
----------------------------
"6 Interpretation
(1) In this Act, unless the context requires otherwise,—
acquisition includes obtaining ownership or coming into possession by any means [...]
forestry right means—
(a) a right created in accordance with the Forestry Rights Registration Act 1983; or
(b) any other profit à prendre that—
(i) relates to taking timber from a forest; and
(ii) to the extent (if any) that the profit à prendre relates to other things, would, were the profit à prendre to be treated as a separate profit à prendre in relation to those things, fall within paragraph (b) of the definition of regulated profit à prendre in this subsection [...]
non-urban land means—
(a) farm land; and
(b) any land other than land that is both—
(i) in an urban area; and
(ii) used for commercial, industrial, or residential purposes
[...]
7 Who are overseas persons
(1) The purpose of this definition is to provide that persons are overseas persons if they themselves are overseas persons (for example, not a New Zealand citizen or ordinarily resident in New Zealand or, for companies, incorporated overseas) or they are more than 25% owned or controlled by an overseas person or persons.
(2) In this Act, overseas person means—
(a) an individual who is neither a New Zealand citizen nor ordinarily resident in New Zealand; or
(b) 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
(c) a body corporate (A) if an overseas person or persons have—
(i) more than 25% of any class of A’s securities; or
(ii) the power to control the composition of more than 25% of A’s governing body; or
(iii) the right to exercise or control the exercise of more than 25% of the voting power at a meeting of A; or
(d) a partnership, unincorporated joint venture, or other unincorporated body of persons (other than a trust or unit trust) (A) if—
(i) more than 25% of A’s partners or members are overseas persons; or
(ii) an overseas person or persons have a beneficial interest in or entitlement to more than 25% of A’s profits or assets (including on A’s winding up); or
(iii) an overseas person or persons have the right to exercise or control the exercise of more than 25% of the voting power at a meeting of A; or
(e) a trust (A) if—
(i) more than 25% of A’s governing body are overseas persons; or
(ii) an overseas person or persons have a beneficial interest in or entitlement to more than 25% of A’s trust property; or
(iii) more than 25% of the persons having the right to amend or control the amendment of A’s trust deed are overseas persons; or
(iv) more than 25% of the persons having the right to control the composition of A’s governing body are overseas persons; or
(f) a unit trust (A) if—
(i) the manager or trustee, or both, are overseas persons; or
(ii) an overseas person or persons have a beneficial interest in or entitlement to more than 25% of A’s trust property.
[...]
10 Consent required for overseas investments in sensitive New Zealand assets
(1) A transaction requires consent under this Act if it will result in—
(a) an overseas investment in sensitive land (see section 12):
[...]
11 Consent must be obtained before overseas investment given effect
(1) Consent must be obtained for a transaction before the overseas investment is given effect under the transaction.
(2) The procedure for obtaining consent (including who must obtain consent) is set out in subpart 2.
12 What are overseas investments in sensitive land
An overseas investment in sensitive land is the acquisition by an overseas person, or an associate of an overseas person, of all or any of the following (a section 12 interest):
(a) an estate or interest in land if—
(i) the land that the estate or interest relates to is sensitive land under Part 1 of Schedule 1; and
(ii) the estate or interest acquired is a freehold estate or a lease, or any other estate or interest, for a term of 3 years or more (including rights of renewal, whether of the grantor or grantee), and is not an exempted interest; or
(b) rights or interests in securities of a person (A) if A owns or controls (directly or indirectly) an estate or interest in land described in paragraph (a) and, as a result of the acquisition,—
(i) the overseas person or the associate (either alone or together with its associates) has a more than 25% ownership or control interest in A; or
(ii) the overseas person or the associate (either alone or together with its associates) has an increase in an existing more than 25% ownership or control interest in A; or
(iii) A becomes an overseas person.
[...]
Schedule 1 - Sensitive land
Part 1 - What land is sensitive
Land is sensitive under this Act if—
(a) the land is or includes land of a type listed in table 1 and the area of that type of land exceeds the corresponding area threshold (either alone or together with any associated land of that type), if any; or
(b) the land (land A) adjoins land of a type listed in table 2 and the area of land A exceeds the corresponding area threshold (either alone or together with any associated land), if any.
[...]
Table 1
Land is sensitive if it is or includes this type of land / and that type exceeds this area threshold (if any) [...]
non-urban land / 5 hectares
[...]
Schedule 3 - Exemptions from requirement for consent
Exemptions in respect of overseas investments in sensitive land involving forestry rights
6 Area of forestry right less than 1 000 hectares
(1) A transaction does not require consent for the purposes of section 10(1)﻿(a) to the extent that it will result in an overseas investment in sensitive land (the relevant forestry investment) if—
(a) the relevant forestry investment is the acquisition of a forestry right (the relevant forestry right); and
(b) the area of the relevant forestry right is less than 1 000 hectares.
(2) Subclause (3) applies to a transaction that will result in an overseas investment in sensitive land (the relevant forestry investment) if—
(a) the relevant forestry investment is the acquisition of rights or interests in securities of a person who owns or controls (directly or indirectly) a forestry right that is an interest in land described in section 12(a) (the relevant forestry right); and
(b) the area of the relevant forestry right is less than 1 000 hectares.
(3) To the extent that the transaction will result in the relevant forestry investment, it does not require consent for the purposes of section 10(1)﻿(a) in relation to the relevant forestry right.
(4) Subclause (1) or (3) (as the case may be) does not apply if, immediately after the relevant forestry investment is given effect to, the sum of the following areas is 1 000 hectares or more:
(a) the area of the relevant forestry right:
(b) the combined area of all other forestry rights—
(i) that related forestry investors acquire (or are treated as acquiring) in the same calendar year as that in which the relevant forestry investment is given effect to; and
(ii) that are for a term of 3 years or more (including rights of renewal, whether of the grantor or grantee).
(5) For the purposes of subclause (4)﻿(b)﻿(i),—
(a) related forestry investor means—
(i) the person who makes the relevant forestry investment; or
(ii) any associate of that person; or
(iii) a body corporate related to that person or to any associate of that person (as determined in accordance with section 12(2) of the Financial Markets Conduct Act 2013); and
(b) a related forestry investor (B) is treated as acquiring a forestry right if—
(i) B acquires rights or interests in securities of a person (C) who owns or controls (directly or indirectly) the forestry right and, as a result of the acquisition, B has (either alone or together with B’s associates) a more than 25% ownership or control interest in C; or
(ii) the forestry right comes under the ownership or control (direct or indirect) of a person in whom B has (either alone or together with B’s associates) a more than 25% ownership or control interest; and
(c) it does not matter if a forestry right is acquired (or treated as acquired) by a related forestry investor before the relevant forestry investment is given effect to.
(6) In this clause, area, in relation to a forestry right, means the area of land covered by the forestry right (including any right, whether of the grantor or grantee, to have the original area increased).[...]" (Overseas Investment Act (2005 No 82); last amended on 24 November 2021; Sections 6, 7, 10, 11 and 12; Schedule 1, Part 1; Schedule 3, Section 6)
Overseas Investment Act (2005 No 82); last amended on 16 August 2022; Sections 16A, 16B, 16C and 17; Schedule 3, Section 6
Overseas Investment Act (2005 No 82); last amended on 24 November 2021; Sections 6, 7, 10, 11 and 12; Schedule 1, Part 1; Schedule 3, Section 6

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