NEW ZEALAND Law and Practice Contributed by: Fiona Ashby, Luke Bowers, Daniel Erickson, Jessica Phillips, Natalie Foster, Shelley Slade-Gully, Tina Liu and Theresa Le Bas, Tompkins Wake
2.4 Right to Appeal Challenging OIO Decisions
consent or notification and clearance without first obtaining the consent or clearance can expose inves - tors to significant legal risk, including the potential for the relevant Ministers or the OIO to require unwinding of the transaction and impose fines. Investors who are uncertain whether their transaction requires con - sent or notification should seek specialist legal advice before completing any transaction. 2.3 Commitments Required From Foreign Investors National Interest If the assessment of a transaction identifies a risk to New Zealand’s national interest, the OIO or Minister of Finance has broad discretion to impose conditions to manage that risk. The Investor and Benefit to New Zealand Tests Where the Investor Test applies, the OIO can grant consent even if certain disqualifying factors are pre - sent, provided it is satisfied that the investor remains suitable to own or control sensitive assets. The OIO has broad discretion to impose conditions to manage disqualifying factors, plus standard con - ditions it will typically impose to ensure future issues are captured. For transactions where the Benefit Test applies, the investment must demonstrate substantial benefits, such as job creation, export growth, technol - ogy introduction or environmental protection. These commitments are assessed as part of the consent process and may be reflected in conditions attached to any approval granted. The nature and extent of required commitments will depend on the type of investment and the consent pathway under which the application is made. Conditions on Consent Where consent is granted conditionally, investors must satisfy any imposed conditions relating to, for example, ongoing employment levels, environmental stewardship or the purpose for which land is used; failure to comply with such conditions may result in enforcement action. Investors should engage early with the OIA process to understand and plan for any conditions that are likely to be imposed.
Where the OIO or the relevant Government Ministers decline to grant consent, investors may seek to chal - lenge the decision through judicial review in the High Court. New Zealand’s administrative law framework permits affected parties to challenge government decisions on the basis that the decision-maker failed to follow correct procedures, applied the wrong legal test, or acted unlawfully. Scope and Timing Judicial review focuses on the legality of the decision- making process rather than the substantive merits of the decision, meaning the reviewing court considers whether the correct process was followed and the law correctly applied. Applicants considering a challenge must act promptly, as judicial review proceedings are subject to timing requirements. Specialist legal advice should be sought immediately upon receipt of an adverse OIO decision, to assess the grounds for challenge and the prospects of success. 3. Corporate Vehicles 3.1 Most Common Forms of Legal Entity Limited Liability Company The most common business structure for foreign investors is the limited liability company, which pro - vides a separate legal entity status and limits share - holders’ liability to their investment. At least one director must live in New Zealand or Australia (if they are also a director of an Australian company), and a minimum of one shareholder is required, with no resi - dency requirements. The limited liability company is well suited to a broad range of purposes, from day-to- day trading operations to greenfield investments and holding structures. Subsidiary and Branch A subsidiary offers local incorporation, enhanced market credibility, and liability protection, though it involves higher compliance costs and more complex regulatory requirements. A branch provides lower operational costs and easier management integra - tion with the parent company, but exposes the parent company to liabilities in New Zealand and requires
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