Foreign Direct Investment

According to UNCTAD's World Investment Report 2023, New Zealand received USD 7.53 billion in FDI inflows in 2022, up by 88.8% year-on-year and more than double the 2018-20 average. In the same year, the stock of inward FDI into New Zealand has been estimated at USD 93.85 billion, around 38.8% of the country’s GDP. As of March 2023, data from the national statistics office reveals that of the $531.2 billion total foreign investment in New Zealand, 57.5% originated from Australia, the United Kingdom, the United States of America, and Japan, with 28.3% being direct investment, 49.0% portfolio investment, 3.9% financial derivatives, and 18.7% other investment. Of the total stock, 49% is directed towards financial and insurance services, 14.3% towards public administration and safety, and 7.2% towards manufacturing industries.

FDI inflows are attracted by the open and business-friendly economy, low levels of corruption, good protection of property rights, high living standards, political stability, and advantageous tax policy. The Overseas Investment Office (OIO) is the regulator responsible for the administration of the Overseas Investment Act 2005 (OIA), the statute that regulates investments in New Zealand assets by overseas investors. The OIA sets out a consent regime in relation to investments that meet a value threshold or are in respect of certain types of land. Private entities, whether foreign or domestic, enjoy the freedom to own and operate business ventures in New Zealand. The government does not discriminate against foreign investors regarding the establishment and ownership of businesses, though it imposes specific restrictions on foreign ownership of strategic enterprises like Air New Zealand and Chorus Limited, a telecommunications infrastructure provider. In 2021, adjustments were made to the foreign investment framework, streamlining the Overseas Investment Office's screening process. Notably, a "national interest test" is now applicable to foreign government investment in New Zealand, with a threshold set at 25 percent, with certain exceptions. New Zealand’s downsides include vulnerability to natural disasters, geographical isolation, and a limited domestic market. The overall business climate in the country is considered positive, and New Zealand ranks 27th among the 132 economies on the Global Innovation Index 2023 and 6th out of 184 countries on the latest Index of Economic Freedom.