NEW ZEALAND Law and Practice Contributed by: David Weavers, Alex MacDuff, Matt Consedine and Verniel Virtucio, Russell McVeagh
2. Regulatory Environment 2.1 Licensing and Regulatory Approval New Zealand Private Credit Lenders Under the Financial Service Providers (Registration and Dispute Resolution) Act 2008 (FSPA), a New Zea - land lender will likely be required to register as a finan - cial service provider in relation to financial services they provide. Registration under the FSPA is straight - forward, quick and inexpensive, and is not considered a barrier to entry. Foreign Private Credit Lenders A body corporate that is incorporated outside New Zealand that commences “carrying on business” in New Zealand must apply for registration under the Companies Act 1993 (the “Companies Act”). An over - seas company that is registered under the Companies Act is not subject to most of the general provisions of the Companies Act, but is subject to some special notification and financial reporting requirements. A foreign private credit provider may be required to register as an overseas company under the Compa - nies Act, depending on the particular circumstances. The registration requirements of the FSPA described above will apply to a foreign private credit provider that provides loans to persons in New Zealand. How - ever, an exclusion may be available if the provider does not have a place of business in New Zealand and does not provide the services to any retail client in New Zealand. If the provider is carrying on business in New Zealand (see above), then they will likely be a reporting entity for the purposes of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AMLA). A reporting entity under the AMLA does not receive the benefit of this exclusion. The above assumes that services/products are pro - vided to certain wholesale investors only and not retail clients, consumers or natural persons. Private credit providers may be subject to other rules and regulations beyond the scope of this summary.
2.2 Regulators of Private Credit Funds The Financial Markets Authority is the primary regula - tor of financial markets in New Zealand. 2.3 Restrictions on Foreign Investments There are no general restrictions on foreign investment in private credit funds. In general terms, the Overseas Investment Act 2005 (OIA) (and related regulations) regulates investment by overseas persons in sensitive land (which includes residential land), significant business assets or fishing quota. New Zealand private credit funds would typically not hold sensitive assets and so foreign investment in a fund would not typically require approval, consent or notification under the OIA. The question ultimately turns on the particular circumstances of the individual investment. 2.4 Compliance and Reporting Requirements New Zealand Private Credit Lenders Local funds will be subject to the standard compliance and reporting requirements that apply to all entities of the same type (such as the requirements generally applicable to companies under the Companies Act). Such requirements are not considered to be onerous. There are limited reporting and compliance require - ments under the FSPA, but, again, these are not con - sidered to be onerous. Local funds will likely be subject to the AMLA, which includes requirements in relation to customer due dili - gence, suspicious activities reports, record keeping and maintenance of an AML programme and compli - ance officer. Other than the general provisions above, there are no statutory compliance and reporting requirements that apply specifically to private credit providers. Other requirements would arise if funds are being raised from retail investors. Foreign Private Credit Lenders If a foreign private credit lender is required to be regis - tered as an overseas company under the Companies
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