Overseas investors face new costs, closer scrutiny in buying New Zealand assets

Foreign investors wanting to buy New Zealand assets will face a steep rise in regulatory charges and closer scrutiny of land purchases, the government announced Thursday.

The hikes in charges come as part of a review of the Overseas Investment Office (OIO), which has been mired in controversy over allegations of "rubber-stamping" approval applications and failing to carry out good character tests on foreign buyers.

The government said the changes would enable the OIO to assess applications faster and shore up investor certainty.

The changes were expected to take place in mid-2016 and would see OIO fees restructured and increased by between 8.7 percent and 166 percent for different application fee types.

Changes would also be made to the policy that underpinned the overseas investment regime before the end of the year, once the regulatory process had been completed, Minister for Land Information Louise Upston said in a statement.

Increased fees would enable the OIO to hire up to 25 percent more staff to reduce the time it took to assess applications and improve monitoring and reporting, she said.

"Fee increases will also allow the OIO to undertake more responsive monitoring and enforcement, with site inspections of some high risk land investments," said Upston.

Finance Minister Bill English said the government welcomed beneficial overseas investment and was committed to ensuring the efficient operation and continual improvement of the system.

"We've heard concerns from investors that the rationale for screening certain investment types is unclear and decisions by the OIO are taking too long," English said in the statement.

On Tuesday, Upston said an investigation would be conducted into how the OIO carried out the good character test, one of its considerations in deciding whether to give consent for a land purchase by overseas buyers.

This followed revelations concerning the sale of a 1,317-hectare station in the central North Island's Taranaki region to Panama-registered firm Ceol & Muir in 2014.

Documents obtained by the opposition Labor Party showed the brothers who owned Ceol & Muir, Rafael and Federico Grozovsky, citizens of Italy and Argentina respectively, had been found criminally responsible for chemical dumping from their Buenos Aires tannery.

source:XINHUA