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.
RBNZ: Financial system will benefit supporting economic recovery
The Reserve Bank of New Zealand's published the May Financial Stability Report on 27 May. Adrian Orr, RBNZ Governor, said, whenh releaseing the report, that New Zealand's financial system is in a solid position to both weather the significant economic impact caused by the COVID-19 pandemic and support New Zealand’s recover". “At the outset of the pandemic the banking system had significant capital and liquidity buffers, built up due to both regulatory requirements and several years of favourable banking conditions. These buffers can now be used to support their customers’ long-term economic future. Our economic stress test analysis suggest banks can continue to lend and prosper through a broad range of adverse scenarios,” Mr Orr says.
Step by step guide to Business Debt Hibernation
A step-by-step guide to business debt hibernation has been published on the business.govt.nz website. Links to the relevant forms for "entry notice", "creditor decision notice - approved" and "creditor decision notice - not approved" on the Companies Office website are included on the page, along with case studies and a warning that "[g]etting help from your lawyer or accountant is a good way to ensure you meet your obligations and don’t become liable as a result of any errors in your process".
FMA: Business debt hibernation
The Financial Markets Authority, in a press release, discusses the Business Debt Hibernation scheme (BDH) introduced to help companies, trusts, and other businesses affected by COVID-19 to manage their debts by allowing them to place existing debts into hibernation for up to seven months. To enter BDH, there are a number of conditions an entity must meet, such as director approval and creditor support. Entities need to be aware of several legal requirements, explained in Schedule 13 of the Companies Act. They may also wish to obtain accounting and legal advice to ensure their obligations are met throughout the BDH process.
Government to increase FMA’s funding and levy settings
The Ministry of Business, Innovation and Employment says "The Government is making changes to the Financial Markets Authority’s (FMA) levy to implement an increase in its funding. The funding decision, made through Budget 2020, involves increasing the FMA’s annual operating funding over the next three years." The media release notes: "The increase in the FMA’s operational funding will be apportioned between the Crown and levy payers. The majority of the increase will come from levy payers. Levies for the first year of the FMA’s phased funding increase (2020/21) have now been confirmed, and are available" in a pdf attached to the media release.
COVID-19 debt and insolvency legislation needs more work, says Law Society
Legislation being fast-tracked through Parliament to respond to looming debt and insolvency problems needs refinement and to be supported by comprehensive practical guidance, particularly for the small-to-medium businesses that make up the bulk of New Zealand’s business activity, the New Zealand Law Society|Te Kāhui Ture o Aotearoa has told the Epidemic Response Committee.
Beehive: OIO and New measures to protect New Zealand’s national interest during COVID-19 crisis
Beehive press announcement that the Government is to amend the "Overseas Investment Act to protect key New Zealand assets from falling unnecessarily into foreign ownership as the economy recovers from the fallout of the global COVID-19 pandemic." The changes will include bringing forward the introduction of a national interest test to our most strategically important assets, as well as the temporary application of that test to any foreign investments, regardless of dollar value, that result in more than a 25 per cent ownership interest, or that increases an existing interest to – or beyond – 50 per cent, 75 per cent or 100 per cent in a New Zealand business. The temporary power will be reviewed every 90 days and remain in place only as long as it is necessary to protect the essential interests of New Zealand while the COVID-19 pandemic and its economic aftermath continues to have significant impact in New Zealand.