OIO changes streamline the investing and consenting processes
The Overseas Investment Office (OIO
) has recently announced five new class exemptions and some other changes to the way it goes about its business. It’s also looking at a few other potential exemptions, all of which – with the right safeguards – should be welcomed.
The new class exemptions came into force on 1 February 2017. They cover:
- Lease renewals
- Situations where land has previously been the subject of an OIO consent, and has remained in overseas ownership and will continue to be used for the same activity
- Transactions due to the Public Works Act 1981
- Situations where a custodian is investing on behalf of another person, and
- Situations where a company is considered an overseas person only because an overseas custodian holds rights or interests in the company’s shares.
The OIO has made various changes to the consent application process; these are all aimed at reducing the overall time it takes to deal with an application, without compromising the quality of decision-making.
There are three key changes to note:
- The OIO is promoting pre-application meetings to discuss things at a high level at an early stage.
- New application templates are being finalised and should be available in February.
- There’s a triaging of applications by senior staff, with more of a risk-based approach to the assessment of applications that come through the OIO’s doors. More complex and higher risk applications may take longer; more straightforward or lower risk applications should be turned around faster.
On the enforcement front, overseas investors should note that the OIO is stepping up its surveillance and investigation function. This will include looking into situations where commitments have been made but not delivered on.
In the background, the OIO is also looking at making changes to some of the existing class exemptions, and also some potential new exemptions. Some of the possibilities include more flexibility for an overseas investor to increase their shareholding in a company without needing consent; exempting certain sale and leaseback transactions from the need to get consent; and also exempting certain transactions where the only sensitive land in question is common property (which can often occur in hotel/resort-type developments). There is a good case for these exemptions and we hope to hear more on them from the OIO in the coming months.