(Bloomberg) — The New Zealand government said it will relax investment rules in an effort to attract more foreign capital and boost productivity growth.
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The Overseas Investment Act will be amended next year to reverse the presumption that putting money into New Zealand is a privilege and that investors must justify their transaction to the government, Finance Minister David Seymour said in Wellington on Saturday.
“The new principle is that investments can proceed unless there is an identified risk to New Zealand’s interests,” he said.
The Organization for Economic Co-operation and Development considers New Zealand’s foreign direct investment rules to be among the most restrictive in the developed world. The government believes that removing barriers to foreign capital can improve the country’s poor productivity growth and raise wages.
Workers in countries with more capital are paid more, Seymour said. “They work with better tools and technologies and are therefore more productive,” he said. “Other countries have more capital than us because we have some of the most obstructive foreign investment laws in the world.”
The government has agreed to the principles of the reform, including accelerating the assessment process, on the basis that investments can proceed unless risk factors are identified, Seymour said.
The minister will develop detailed proposals with the aim of adopting legislation before the end of 2025.
“Attracting more foreign investment is a key part of the government’s economic strategy,” Seymour said. “The decisions taken by Cabinet will ensure New Zealand is a player again, rather than sitting on the bench.”
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