Mayne Wetherell has produced a guide to doing business in New Zealand to provide overseas investors, and their advisers, with information about investing here.
The guide summarises inbound investment, immigration, investment structures, financial services regulation, tax, securities, takeovers, intellectual property, employment, land law, and trade practices.
Useful links to market events and commentary.
Insolvency Practitioners Register Goes Live
The recently enacted Insolvency Practitioners Regulation Act requires all insolvency practitioners to be licensed, and meet regulated minimum standards of honesty and competence, in order to take on any insolvency engagement (e.g. liquidation, receivership or administration). The publicly accessible Register identifies if an insolvency practitioner is licensed and has relevant information on their professional history, allowing businesses to make informed decisions about insolvency engagements. The Registrar of Companies has published minimum standards, conditions and requirements for ongoing competence for the licensing of insolvency practitioners, and minimum standards for the accreditation of bodies.
Beehive: New Zealand first in the world to require climate risk reporting
New Zealand will be the first country in the world to require the financial sector to report on climate risks, the Minister for Climate Change James Shaw announced today. The new regime will be on a comply-or-explain basis, based on the Task Force on Climate-related Financial Disclosures (TCFD) framework, which is widely acknowledged as international best practice. Businesses covered by the requirements will have to make annual disclosures, covering governance arrangements, risk management and strategies for mitigating any climate change impacts. If businesses are unable to disclose, they must explain why. In total, around 200 organisations will be required to disclose their exposure to climate risk. This includes large Crown Financial Institutions, such as ACC and the NZ Super Fund. If approved by Parliament, financial entities could be required to make disclosures in 2023 at the earliest.
Companies Office: Safe harbour for company directors to expire 30 September
The Companies Office reminds company directors that the temporary "safe harbour" from their insolvency-related duties will expire on 30 September 2020 as planned. "The Government introduced a temporary change to the Companies Act earlier this year to ease pressure on company directors facing significant liquidity problems as a result of COVID-19. Company directors who have made use of the safe harbour are encouraged to start preparing for their insolvency related directors’ duties resuming on 30 September. Any company director who has concerns about meeting these duties is encouraged to seek legal advice. "While the safe harbour will no longer be available after 30 September, the Government can re-instate the provision quickly should there be a need to do so. "Other forms of financial support are still available for business in difficulty as a result of COVID-19, such as Business Debt Hibernation (BDH), which is available until 24 December 2020.
Reserve Bank’s action plan to assist economic recovery
The Reserve Bank has been buying government bonds on the wholesale market to bring down retail interest rates and put more money into the economy. Last week it increased the size of the programme to a maximum $100 billion from $60 billion over the next two years. Chief economist, Yuong Ha said any move to negative interest rates from possibly early next year would be contingent on the health of the economy. So far, the Reserve Bank's bond buying programme has made a big difference to the country's economic recovery from the COVID-19 pandemic.
Infrastructure Funding and Financing Act passed into law
The Infrastructure Funding and Financing Act establishes the Infrastructure Levy Model, which the Government has developed in partnership with high-growth councils. A key feature of the model is the establishment of an entity called a Special Purpose Vehicle (SPV), a financing tool that enables debt finance to be raised from the private sector and ring-fenced from a council’s balance sheet, not affecting their debt levels or credit rating. The SPV will be responsible for financing and constructing the infrastructure and, post-construction, the infrastructure will be transferred to the relevant council for its ongoing operation and maintenance. A central element of the model is the levy paid annually, for up to 50 years, by the future homeowners who benefit from the infrastructure, to fund the finance raised for its construction.
Metlifecare comes to agreement with EQT to buy its shares for $6 a share
Metlifecare Limited has entered into a new Scheme Implementation Agreement (SIA) under which Asia Pacific Village Group, an entity owned by EQT Infrastructure IV Fund and managed by EQT Fund Management S.a.r.l., has agreed to acquire all Metlifecare’s shares for NZ$6.00 per share. The parties have also agreed to discontinue all litigation and settle all disputes related to the original SIA with the parties to cover their own costs in relation to the litigation.