K3 Insights

New Zealand is making it easier for international investors to enter and grow in the local market with the launch of Invest New Zealand. This new agency is an exciting development and is designed to cut red tape, provide support, and encourage foreign direct investment (FDI) in key sectors, creating more opportunities for businesses and the economy.

A Central Hub for Foreign Investors

Announced by Prime Minister Christopher Luxon in his 2025 State of the Nation address, Invest New Zealand follows successful models like Ireland’s Industrial Development Agency, Singapore’s Economic Development Board and Hong Kong’s InvestHK. The agency’s main goal is to bring in foreign capital investment and provide the necessary support for businesses to succeed in New Zealand’s economy.

Initially part of New Zealand Trade and Enterprise (NZTE), the agency is set to become an autonomous Crown entity. Trade Minister Todd McClay, who will oversee the initiative, has highlighted its role in unlocking global investment opportunities, particularly in high-growth sectors.

What Invest New Zealand Will Focus On

The agency will prioritise:

• Key Sectors: Attracting investment in banking, fintech, transport, energy, and manufacturing.
• Simplified Processes: Cutting red tape to make it easier for investors to get started.
• Research and Development (R&D): Supporting innovation and technological progress.
• Skilled Talent: Creating pathways for highly skilled professionals to contribute to New Zealand’s economy.

A More Open Approach to Investment

This initiative is part of the government’s broader economic recovery plan, which aims to liberalise foreign investment regulations. By streamlining approval processes and reducing compliance barriers, New Zealand is presenting itself as a business-friendly destination.

Prime Minister Luxon summed up the approach by saying: “We need to say a lot more yes and a lot less no in New Zealand.” This shift signals a more open and supportive environment for foreign investors.

New Visa Options to Attract Investors

To support Invest New Zealand, New Zealand is introducing new investor visas from 1 April 2025 to attract foreign capital. The Growth Category requires a minimum investment of NZD $5 million in high-risk sectors, such as direct investments in businesses, with investors spending at least 21 days in New Zealand over three years. The Balanced Category requires NZD $10 million, allowing a mix of investments, including bonds and property development, with a 105-day residency requirement over five years. No English proficiency is needed. Additionally, a new remote work visa will let holidaymakers work while visiting, boosting tourism and attracting global talent.

New Zealand’s Economic Landscape & The Role of Legal Advice

The launch of Invest New Zealand comes at a crucial time, as the country entered a technical recession in Q3 2024, with GDP contracting by 1%, following a 1.1% decline in the previous quarter. To counter this, the Reserve Bank of New Zealand has reduced the official cash rate (OCR) by 125 basis points since August 2024, bringing it to 4.25%, with a further 50-basis-point cut expected on February 19, 2025.

With unemployment rising to 5.1%, the government is looking to attract high-quality investment that can drive growth and create jobs. These reforms are expected to create a more competitive and globally integrated business environment.

Understanding regulatory changes and investment opportunities is essential. Ensuring that investments are structured properly and meet New Zealand’s evolving legal requirements can help mitigate risks and maximise success. This is equally important for local firms looking to make the most of the FDI coming into the country. With New Zealand’s investment climate is evolving rapidly, staying on top of legal, regulatory, and compliance matters is essential. Expert guidance can help investors and businesses navigate the process smoothly and effectively.

For those considering investing in New Zealand, or those who are looking to make the most of this FDI, professional advice can provide clarity on the process and ensure everything is handled correctly. Whether you need help with business expansion, investment structuring, or immigration requirements, having expert support can make a big difference.

If you have any questions about the new visas, how to structure your business to meet legal and regulatory requirements or would just like to have a chat, feel free to email a trusted adviser at K3 Legal or visit www.k3.co.nz to learn more.