Foreign Direct Investment

According to UNCTAD's World Investment Report 2024, New Zealand received USD 3.56 billion in FDI inflows in 2023, down by 54.8% compared to the previous year. At the end of the same year, the total stock of inward FDI was estimated at USD 99.12 billion, around 39.8% of the country’s GDP. As of September 2024, data from the national statistics office reveals that of the NZD 572.3 billion total foreign investment in New Zealand, 57.5% originated from Australia, the United Kingdom, the United States of America, and Singapore, with 27.7% being direct investment, 51.6% portfolio investment, 3.8% financial derivatives, and 17% other investment. Around half of the total FDI is directed towards financial and insurance services, with minor shares for public administration and safety, and 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%, with certain exceptions. New Zealand’s downsides include vulnerability to natural disasters, geographical isolation, and a limited domestic market. In early 2025, the country launched Invest New Zealand, a new agency designated to reduce red tape, offer support, and boost FDI in critical sectors, thereby creating more opportunities for businesses and stimulating economic growth. The overall business climate in the country is considered positive, and New Zealand ranks 25th among the 133 economies on the Global Innovation Index 2024 and 11th out of 184 countries on the latest Index of Economic Freedom.