New Zealand's Investor Immigration - Challenges and Opportunities

New Zealand has long been an attractive destination for investor migrants, thanks to its stable political environment, British-based legal system, sound economy, open and friendly society, and the quality of life.

In the 12 years to mid-2022 the Investor 1 (NZ$10m) & Investor 2 (NZ$3m) policies had proved very successful in attracting over 3,000 families, and some NZ$14 billion, of investment into New Zealand.

However, significant policy changes introduced by the previous Government in September 2022, which required investors to invest more “actively”, resulted in New Zealand falling down the pecking order of migrant investor destination countries. The Active Investor Plus (AIP) category requires investors to invest between NZ$5m and NZ$11.25m, and to progressively invest the required amount over 3 years, and to then maintain the full investment for the 4th year. The actual amount to be invested is weighted according to the investment type with the lower investment amount applicable to “direct investments” – investments which are perceived to attract greater risk. The AIP has cumbersome and complex policy settings, is administratively onerous, and involves applicants having to choose from a range of investment options registered with New Zealand Trade & Enterprise (NZTE). Many of these options carry significant and uncertain financial risk and the onus is on applicants to undertake substantial due diligence – on investments, and in a market, with which they have little or no familiarity.

As of the end of October 2024 Immigration NZ had received 97 AIP applications, of which 33 applications had been finalised and resident visas issued. Another 22 applications had been approved in principle and were waiting on their investments to be completed, while 12 applications had been withdrawn. The source countries of AIP applicants are evenly spread between USA (29%), UK & Europe (31% and Asia (40%).

There was a significant spike in new applications (29) in September which was, more than likely, a result of the almost four-fold increase in the INZ application fee from NZ$7,900 to NZ$27,470 (!!!) which took effect from 1 October.

The total of NZ$65m invested to date, after 2 years of the AIP, compares dismally to the annualised NZ$1b a year under the previous investor policies. The current Minister of Immigration, the Hon Erica Stanford, recently stated “We had the golden goose, and now we've got the lame duck” and, as a consequence, she has initiated a review of the AIP which is expected to result in changes in early 2025. While we have seen steady investor interest from the USA following the November election, given the announced review and the general expectation for more “accommodative” investor policy settings in the not-too-distant future, we expect intending applicants to now await the review outcome before progressing any interest.

New Zealand's investor migration landscape also needs to be viewed in the context of global competition. International investor migration firm, Henley & Partners, estimate that around 128,000 high-net-worth individuals will be seeking alternative residence or citizenship in the next year. With several countries reviewing or closing their investor migration programs, including Australia, New Zealand has a golden opportunity to now attract investor migrants – and certainly many more than what we are currently attracting!

New Zealand was ranked last on the 2002 OECD Foreign Direct Investment (FDI) restrictiveness index. The present Government is clearly keen on the need, and importance, for New Zealand to attract more foreign direct investment (FDI) and has already announced plans to change foreign investment laws, while coalition partner, NZ First, has promised a NZ$100b “future fund” which may involve cutting taxes for foreign investors.

As well as changes to attract more investor migrants the Government has also signalled potential changes to foreign investment fund (FIF) rules and a review of the Overseas Investment Office processes. There is also a possibility the foreign buyer ban on the purchase of residential property may be reviewed.

Given New Zealand’s current economic challenges, foreign direct investment is more important than ever to provide new capital, employment, technology, skills and international connections to stimulate our economy, and to our grow our productivity. Changes to New Zealand’s migrant investor-focussed policies are key to facilitating such investment - and can’t come soon enough!