HomeReportsBureau of Economic and Business Affairs2023 Investment Climate Statements...New Zealand

# 					2023 Investment Climate Statements: New Zealand			

 In this section										/

													EXECUTIVE SUMMARY											

                -  EXECUTIVE SUMMARY 
                -  1. Openness To, and Restrictions Upon, Foreign Investment                    -  Policies Towards Foreign Direct Investment 
                  -  Limits on Foreign Control and Right to Private Ownership and Establishment 
                  -  Other Investment Policy Reviews: 
                  -  Business Facilitation 
                -  2. Bilateral Investment and Taxation Treaties 
                -  3. Legal Regime                    -  Transparency of the Regulatory System 
                  -  International Regulatory Considerations 
                  -  Legal System and Judicial Independence 
                  -  Laws and Regulations on Foreign Direct Investment 
                  -  Competition and Antitrust Laws 
                  -  Expropriation and Compensation 
                  -  Dispute Settlement                      -  ICSID Convention and New York Convention 
                    -  Investor-State Dispute Settlement 
                    -  International Commercial Arbitration and Foreign Courts 
                  -  Bankruptcy Regulations 
                -  4. Industrial Policies                    -  Investment Incentives 
                  -  Foreign Trade Zones/Free Ports/Trade Facilitation 
                  -  Performance and Data Localization Requirements 
                -  5. Protection of Property Rights                    -  Real Property 
                  -  Intellectual Property Rights 
                -  6. Financial Sector                    -  Capital Markets and Portfolio Investment 
                  -  Money and Banking System 
                  -  Foreign Exchange and Remittances                      -  Foreign Exchange 
                    -  Remittance Policies 
                  -  Sovereign Wealth Funds 
                -  7. State-Owned Enterprises                    -  Privatization Program 
                -  8. Responsible Business Conduct                    -  Additional Resources 
                  -  Climate Issues 
                -  9. Corruption                    -  Resources to Report Corruption 
                -  10. Political and Security Environment 
                -  11. Labor Policies and Practices 
                -  12. U.S. International Development Finance Corporation (DFC), and Other Investment Insurance or Development Finance Programs 
                -  13. Foreign Direct Investment Statistics 
                -  14. Contact for More Information 

## EXECUTIVE SUMMARY

The New Zealand economy has bounced back strongly following the Covid pandemic. Loosened mobility restrictions in April 2022 saw a surge of economic activity and cross-border movements. Positive economic indicators followed. Unemployment hit a multi-decade low of 3.4 percent while GDP expanded by 3.4 percent. However, hints that the economy had begun to overheat became more pronounced with inflation soaring to 7.3 percent in the year to December 2022, well outside the Reserve Bank’s target band of 1-3 percent, resulting in a steady tightening of interest rates that are meant to achieve an engineered recession.

New Zealand has an international reputation for an open and transparent economy where businesses and investor can make commercial transactions with ease. As a small country that relies on trade and the rule of international law, major political parties are committed to facilitating investments that are productive, sustainable, and inclusive. While a broad range of investments in various sectors are welcomed, the New Zealand government is prioritizing investments that target opportunities in decarbonization, particularly in the public transport sector, as well as waste and plastics.

In February 2023, New Zealand was granted excepted foreign state investor status from the United States, following the United States granting New Zealand provisional status in January 2022. The formal excepted status will deepen trade ties and make it easier for New Zealand investors to invest in the United States.

In August 2022, the government announced the Research and Development Tax Incentive, which supports businesses that undertake research and development activity in excess of $650 million in New Zealand. Businesses undertaking eligible activities that aim to advance an innovative and sustainable economy will be provided a 15 percent tax credit.

With minimal direct trade exposure to Russia and Ukraine, New Zealand has felt the impact of Russia’s war of aggression through derivative means. Higher energy prices have weighed on real incomes, and exporters anticipate reduced demand from major trading partners that have larger trade exposures. The disruption of commodities key to production in New Zealand, such as fertilizer and wheat (along with crude oil and natural gas) have contributed to supply disruptions and inflation.