Refinements to the Active Investor Plus (AIP) visa programme that come into effect on 1 April 2025 have been designed to attract greater levels of investment into New Zealand with the clear objective of stimulating economic growth.
To help achieve this, the types of businesses and managed funds that can now be approved by New Zealand Trade and Enterprise (NZTE) to receive investments from AIP applicants has greatly expanded.
The Government is “going for growth.” There are two parts to that equation for realisation:
- attracting more foreign investors into the country under the new visa settings – something we are already seeing.
- channelling that increased capital into key sectors of the economy.
The current private sector focus seems to still be on the visa settings, not the opportunity that is open for many businesses and managed funds to secure that investment, that under the prior restricted settings was challenging.
Based on the volume of new investors we are seeing enter the AIP system, there are simply not enough existing investment products to meet the capital demand that will soon flow into the country.
As a result, there is a significant, unrealised opportunity for many businesses and managed funds to access the growing level of foreign direct investment that is about to hit our shores.
Refinement of the AIP visa programme
From 1 April 2025, the AIP visa reform will introduce two streamlined investment categories:
- Growth Category: requires a minimum investment of NZD$5 million over a three-year period.
- Balanced Category: requires a minimum investment of NZD$10 million over a five-year period.
Our prior thought piece provided a summary of those changes, and we suggested at the time that the revised settings were positive and would achieve the aim of receipt of greater levels of foreign direct investment. We now have no doubt that the changes will achieve what they have been set to do.
This article focuses on the types of new business and managed funds which can be approved by NZTE to receive Growth Category investments, where the main opportunity lies. Around 90% of new investors we are onboarding under the new settings are focused on this Growth Category.
The role of NZTE
NZTE will continue to oversee what constitutes an “approved investment” for the purposes of the Growth Category by applying updated criteria.
Like before, there are (1) approved Direct Investments for investments directly into businesses and (2) approved Managed Funds for managed investment schemes and other managed funds.
For companies and managed funds looking to attract capital, becoming an approved Growth Category investment with NZTE will allow access to a significant pool of growing capital which needs a near-immediate home.
What has changed?
The criteria for NZTE-approved investments have been modified in several areas:
- Removal of property caps: There is no longer any real property cap for approved businesses or managed funds (compared to the existing AIP scheme where there was a 20% cap in property assets). This significantly opens potential investments into horticulture, forestry, agriculture, and aquaculture where major land interests are often needed to operate. Businesses which previously did not qualify due to a pre-existing interest in land or because they were not considered to be high growth, can now be approved.
- Specific Industries. The updated policy specifically identifies investments in technology, manufacturing, food and beverage, renewable energy, aged care and the primary sector as contributing to the Government’s economic strategy and areas NZTE will be keen to facilitate investment into.
- Increased NZTE discretion. When considering an application to become an approved investment, NZTE may now regard a wider range of positive impacts which flow from the investment. These include increasing economic output, creation or saving jobs, increases in productivity/productive assets, and investment into intangible assets – such as intellectual property and R&D. This means a far wider range of businesses which previously did not qualify, can now qualify.
- Updated Feasibility Requirements. In order to be approved as a Direct Investment, applications for start-ups and greenfield projects will require feasibility studies (along with any other required due diligence) in order to support their application.
- Faster NZTE assessments. NZTE has been streamlined, with application times set to materially reduced from between two or three months to a matter of weeks. To assist that, there will no longer be an external ‘Panel’ to assess applications and, for decision-ready applications, the assessment timeframe for approval could be around two weeks.
Lane Neave – making the complex simple
Our Corporate law experts have extensive experience in this area, having successfully assisted many Direct Investments and Managed Funds obtaining “approved investment” status with NZTE. However, there are a number of pitfalls to avoid to ensure a successful outcome.
If you are a New Zealand business or managed fund seeking capital and want to understand more about how you can apply to access capital within the AIP visa categories, please feel free to reach out to us – the leading legal team in the country in this space.
