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 on potential need for regulation of new money forms
The Reserve Bank of New Zealand (RBNZ) is seeking feedback on its proposed approach to the opportunities and challenges from new forms of private money such as cryptoassets, including stablecoins. The objective is for New Zealand to have a reliable and efficient money and payments system that supports innovation and inclusion. RBNZ will be offering stakeholder webinars and other opportunities to discuss the paper in February and March with feedback closing on 3 April 2023.
Anti-Money Laundering Laws Reviewed
The Ministry of Justice has conducted its required reviewed of the Anti-Money Laundering and Countering Financing of Terrorism Act, five years after the 2017 amendments took place. The review concluded that the Act provides for a generally sound regulatory regime, but that there are some issued that prevent the regime from performing at its best. Most significantly, the report found that the regime is not sufficiently risk based or sufficiently resourced. Ultimately, this means that the regime is not as effective as it could be, and it is harder (and likely more expensive) than it needs to be for businesses to comply with the Act, which undermines efforts from businesses to detect and deter money laundering and terrorism financing.
Concerns Tax Bill will add compliance costs for some taxpayers
There are concerns that new tax legislation is going to overcomplicate matters for online platform providers and overseas workers coming to NZ. The Taxation (Annual Rates for 2022-23, Platform Economy and Remedial Matters) Bill (no 2) would require platform providers to provide the IRD with information about the people who earned income via their platform from providing accommodation, personal services, vehicle rentals, or the sale of goods. However, the cost to gather this information has allegedly been underestimated. The proposed legislation would also require international employees coming to work in NZ to become responsible for meeting their tax obligations, a change that is expected to impose high compliance costs. The Bill is proposed to come into force 1 January 2024. Some advisers have asked for this to be pushed back by at least a year in order for the new rules to be refined.
Better protections for Kiwis using Buy Now, Pay Later
Better checks to stop vulnerable consumers landing themselves in Buy Now, Pay Later (BNPL) debt traps are on the way, Commerce and Consumer Affairs Minister Dr David Clark announced on 2 November. The Government has agreed affordability checks should apply to Buy Now, Pay Later loans above a certain threshold, meaning borrowers will receive the same kind of protections as borrowers using other credit contracts – such as credit cards and personal loans. The Ministry of Business, Innovation and Employment will commence consultation on the details, including the proposed threshold of $600, later this year. It is intended that final regulations will be made in 2023.
Thematic review of use of the wholesale investor exclusion
The Financial Markets Authority has released a report of its findings from its thematic review of wholesale offers of financial products, along with guidance for offerors and those who provide confirmation for eligible investor certificates. The Financial Markets Conduct Act 2013 prescribes how offers of financial products can be made to potential investors, subject to a number of exclusions. One of these exclusions is for offers made to wholesale investors. Such offers do not require the standard disclosure, governance and financial reporting requirements that apply to regulated offers, on the basis that wholesale investors have sufficient knowledge and experience to assess an offer. In recent years, the FMA has noted an increase in complaints and concerns raised about wholesale offers of financial products indicating, increased investor participation.
Fair Pay Agreements Bill passes third reading in Parliament
Legislation setting up a legal framework for collective bargaining across entire industries is set to become law. The Fair Pay Agreements Bill has passed its third reading in Parliament. The bill provides a framework for collective bargaining across occupations - like cleaners, supermarket workers and security guards - rather than just between unions and employers. Negotiations with employers could be initiated by 1000 employees or 10 percent of the workers under the proposed coverage.