When do the changes introduced by the Overseas Investment (Forestry) Amendment Act 2022 apply?
The Overseas Investment (Forestry) Amendment Act 2022 came into force on 16 August 2022. However these new rules do not apply to transactions entered into before that date, or to applications for consent made before that date (regardless of when the transaction is entered into).
For information on investing in forestry prior to these changes taking effect:
Investing in forestry and forestry rights (before 16th August 2022)
What is investing in forestry?
Investing in forestry can take the form of buying or leasing land to plant a forest on, buying or leasing an existing forestry operation, or acquiring sensitive land for both forestry and another purpose, such as farming. Investing in forestry rights means buying the rights to establish, maintain and harvest trees on someone else’s land.
Do I need consent?
You must apply for consent if you are an overseas person and you want to:
- buy or lease land that is currently planted for forestry, or land to be used for forestry, or
- buy more than 1000 hectares of forestry rights in a calendar year.
Who can invest without consent?
You do not need to apply for consent to buy forestry rights if:
- you are buying less than 1000 hectares of forestry rights per calendar year, or
- you are an Australian citizen or an Australian entity (in certain circumstances).
Note: Even if you do not need consent, you may still need to notify us of the investment.
Find out if you need to notify us of a transaction
Help and advice
To confirm which requirements apply to you, or talk through your options, please contact us.
Contact the Overseas Investment team
Types of forestry consents
There are 3 different consent options, depending on what you intend to do with the land:
Special forestry test
This is the most streamlined test. It is for investors who are buying existing forestry land.
Assessment criteria
Under this test, you are required to:
- use the land exclusively, or nearly exclusively, for forestry activities
- replant after harvesting, unless you are exempt
- not live on the land
You will also need to implement and maintain certain arrangements for the land, including:
- public access
- protection of habitat for indigenous plants and animals
- protection of historic places
- log supply arrangements.
You do not need to include a comparison between the benefits your investment will bring and those provided by the vendor or a New Zealand investor.
Fee
Find information on the OIO fees framework.
General benefit test
The general benefit test may be used if you intend to convert farm land to forestry, or if you plan to use the land only for forestry activities but cannot meet all of the criteria of the special forestry test.
Assessment criteria
Applications under this pathway are assessed against the benefit to New Zealand test, under which the investment must be likely to result in benefit to New Zealand, measured against 7 benefit factors. (Benefits are compared to the current state).
Under the general benefit test you are also required to:
- use the land exclusively, or nearly exclusively, for forestry activities
- replant after harvesting, unless you are exempt
- not live on the land.
The 7 benefit factors are:
- Economic benefits
- Benefits to the natural environment
- Public access
- Protection of historic heritage
- Advancing a significant Government policy
- Oversight or participation of New Zealanders
- Consequential benefits
As each application needs to be assessed on its own merits it is possible that a combination of benefits will need to be demonstrated to be granted consent for a forestry investment. It is also important that the application clearly explains how New Zealand will benefit from the investment. The extent of benefit required to be demonstrated is proportionate to the size and sensitivity of the land to be acquired.
More detailed information about the Benefit to New Zealand test can be found at the link below
Benefit to New Zealand test
Evidence that supports any claims that the land to be acquired will be used for production forestry will also be required to support the application. This may include, but is not limited to;
- Copies of agreements with forest managers
- Copies of feasibility or forest suitability reports prepared by independent third parties;
- Forest management plans that deal with planting, silviculture, harvesting plans and other relevant activities, including maps and forecast costs and timing;
- Specific evidence of other production forestry experience;
- Details of any resource consents required and the advice relied on, and copies of any resource consents applied for;
- Copies of any other relevant advice or documentation.
Fee
The fee for this consent application depends on the complexity of the application and whether the decision to grant consent lies with Ministers.
Find information on the OIO fees framework.
OIO fees and penalties
Farmland benefit test
The farmland benefit test may be used if you intend to buy farm land for both forestry as well as another purpose, such as farming, or you intend to plant a permanent forest, such as manuka to support beekeeping activities.
Assessment criteria
Applications under this pathway are assessed against the farmland benefit to New Zealand test, under which the investment must be likely to result in benefit to New Zealand, measured against the same 7 benefit factors. Benefits are compared to the current state. Additionally, high relative importance must be given to the economic benefits factor and the oversight and participation of New Zealanders factor which must provide substantial benefits to New Zealand.
Fee
The fee depends on the complexity of the application and whether the decision to grant consent lies with Ministers.
Find information on the OIO fees framework.
OIO fees and penalties
Standing consents
Investors in forestry or forestry rights may choose to apply for a standing consent. This allows them to apply for consent before identifying the property or land they want to buy. Standing consents are only available for acquisitions of existing forest.
A standing consent covers a predetermined number of transactions and may have an expiry date.
Assessment criteria
Standing consents are for quality investors with a proven track record. To be granted a standing consent, investors will need:
- to have detailed business plans well advanced
- to meet specific conditions
- to justify the need for a standing consent over one-off consents
- to notify the Overseas Investment Office each time they use the standing consent to enter a transaction.
Pre-application meeting
Before applying for a standing consent, you must have a pre-application meeting with us.
Fee
Find information on the OIO fees framework.
OIO fees and penalties
Apply
The Apply section contains information and resources to help you apply for consent online. We recommend you seek expert legal advice as early as possible and book a pre-application meeting to discuss the requirements before making an application.
Apply
Seek expert advice
Pre-application meetings
Tips for speeding up our application process
Legislation
The Overseas Investment Act 2005 outlines the criteria for consent for overseas investments in forestry:
Conditions for forestry consents - Part 2, Section 16 (c)
Exemptions involving forestry rights - Schedule 3
Standing consents - Schedule 4