BN7.10 Acceptable investments

1. An acceptable investment means investment of funds that:
   1. are not for the personal use of the applicant(s) (see BN7.10.25); and
   2. are invested in New Zealand, in New Zealand currency; and
2. To be considered an acceptable investment under the Growth Category, funds must be invested in either one or more of the following asset classes:
   1. managed funds (see BN7.10.10) approved by New Zealand Trade and Enterprise (NZTE); or
   2. direct investments (see BN7.10.15) approved by NZTE.
3. To be considered an acceptable investment under the Balanced Category, funds must be invested in either one or more of the following assets classes:
   1. any of the asset classes listed under BN7.10(b) as acceptable Growth Category investments; or
   2. listed equities (see BN7.10.1); or
   3. philanthropy (see BN7.10.5); or
   4. property development (see BN7.10.30); or
   5. bonds (see BN7.10.35).
4. An acceptable investment:
   1. is determined at the time the investment is made; and
   2. must continue to meet the requirements to be an acceptable investment during the investment period (except where these instructions provide otherwise) of:
      • 36 months for investments made under the Growth Category; or
      • 60 months for investments made under the Balanced Category.

        Notes:
        - When an investment no longer meets the requirements of acceptable investments, the principal applicant must invest into another acceptable investment as set out in BN9.5, except where BN7.10.10(d) and BN7.10.15(d) applies.
        - Growth Category investors must only invest in managed funds or direct investments, except where BN9.5(c) applies. Balanced Category investors may invest in any asset classes listed in (c) above, except where BN9.5(c) applies.

5. The investment value is determined at the time it is made, except where BN6.15(b) applies, inclusive of investment fees (such as management fees), brokerage fees and transaction fees charged on the funds invested.
6. For the purposes of these instructions, investments held jointly in the name of the principal applicant and a secondary applicant (such as their partner and/or dependent child(ren)) are considered to have been made by the principal applicant

Note: Investment fees do not include legal or advisory costs outside of the investment.

BN7.10.1 Listed equities

1. For an investment in listed equities to be considered an acceptable investment, the funds must be invested either directly or through an exchange traded fund or managed fund, and held by someone licensed by the Financial Markets Authority to provide that service, in the equities of a New Zealand resident entity that:
   1. are listed by a market operator licensed by the Financial Markets Authority; or
   2. are offered through a crowdfunding provider licensed by the Financial Markets Authority; or
   3. are equities in New Zealand registered banks.

BN7.10.5 Philanthropy

1. For philanthropic investments to be considered acceptable investments, the funds must be donated to organisations that:
   1. are a registered charity with at least two years of annual returns; and
   2. have current Inland Revenue donee status.

BN7.10.10 Managed Funds

1. For an investment in a managed fund to be considered an acceptable investment:
   1. the investment must be in either:
      • the managed investment products issued by a managed investment scheme which is on the acceptable managed fund list maintained by NZTE; or
      • a discretionary investment management service which is on the acceptable managed fund list, maintained by NZTE; and

        Note: The criteria for inclusion on the acceptable managed fund list is set out in Appendix 15.

   2. there must be a legally binding, non-revocable agreement between the applicant and the fund manager or a nominee (such as an investment company) made under New Zealand law under which the principal applicant has agreed to:
      • acquire managed investment products in an acceptable managed investment scheme; or
      • receive a discretionary investment management service.
2. For the purposes of these instructions:
   1. managed investment product, managed investment scheme, discretionary investment management service and investment authority have the meanings given to those terms in the Financial Markets Conduct Act 2013; and
   2. the total committed investment funds specified in the legally binding agreement (see (a)(ii) above) are considered funds invested.

      Note: For the avoidance of doubt, actual investment of the funds is not required except as stipulated in the legally binding contract.

3. Where funds have been committed, under a legally binding fund investment contract, but have not yet been called upon by the fund manager, the principal applicant must invest the amount of any committed but uncalled funds into on-call investments (see BN7.5).
4. An investment in a managed fund is considered to be an acceptable investment if it meets the requirements of managed funds under the Active Investor Plus immigration instructions at the time the investment is made and if met at that time, remains an acceptable investment eligible for treatment as a managed fund.
5. For the avoidance of doubt, a managed fund product is not considered an acceptable Growth Category investment unless it is on the acceptable managed fund list maintained by NZTE, but may be considered an acceptable Balanced Category investment under another asset class if it exists for the purpose of raising funds:
   1. to place in listed equities that meet the requirements of BN7.10.1(a); or
   2. for residential, commercial and industrial property acquisition or development and they meet the requirements of BN7.10.30(j); or
   3. to place in bonds that meet the requirements of BN7.10.35(b).

BN7.10.15 Direct investments

1. For an investment to be considered an acceptable direct investment:
   1. the principal applicant must invest in:
      • listed equities that are considered an acceptable investment as set out in BN7.10.1(a) as a wholesale investor; or
      • an equity security in an investee entity; or
      • another financial product (for example, a convertible note, preference share or Simple Agreement for Future Equity) that will be converted, or is convertible, into an equity security in an investee entity; and
   2. NZTE must confirm that the:
      • investment by the principal applicant in acceptable listed equities as a wholesale investor was pre-approved by NZTE prior to funds being invested; or
      • investee entity is an acceptable direct investment.

        Note: The criteria for acceptable direct investments, as determined by NZTE, are set out in Appendix 15.

   3. When the funds have been invested, the principal applicant must:
      • have a direct ownership interest in the entity; or
      • have a sole beneficial interest in a trust whose trustee has a direct ownership interest in the entity; or
      • have appointed a nominee using the bare nominee structure whose sole role is to hold the shares (or other securities in accordance with BN7.10.15(a)(i)) in the entity on behalf of the principal applicant.
2. For the purposes of these instructions:
   1. Equity security means a share in a company or an equivalent interest in a body corporate but does not include a debt security.
   2. Debt security has the meaning given to that term in the Financial Markets Conduct Act 2013.
   3. Investee entity means a body corporate that:
      • is a New Zealand resident entity; and
      • is not listed on any securities exchange or stock exchange.
   4. Wholesale investor has the meaning given to that term in the Financial Markets Conduct Act 2013.
3. If the principal applicant has entered into a legally binding non-revocable contract made under New Zealand law with the investee entity or other legal person to acquire an equity security in an investee entity; or another financial product that will be converted, or is or may become convertible, into an equity security in an investee entity, then the:
   1. terms of that contract must comply with the requirements set out in BN7.5(a)(i); and
   2. principal applicant must place the funds into an acceptable direct investment in order for the funds to be treated as funds invested.
4. An investment in a direct investment is considered to be an acceptable investment if it meets the requirements of direct investments under the Active Investor Plus immigration instructions at the time the investment is made and, if met at that time, remains an acceptable investment eligible for treatment as a direct investment.

BN7.10.20 New Zealand resident entity

For the purposes of these instructions, a New Zealand resident entity is a body corporate that:

1. is incorporated in New Zealand; and
2. has its head office in New Zealand; and
3. has its centre of management in New Zealand; and
4. has control, by company directors, exercised in New Zealand.

BN7.10.25 Personal use of investment funds

Personal use includes but is not limited to investment in assets such as a personal residence, car, boat or other personal assets.

BN7.10.30 Property development

1. For an investment in property development to be considered an acceptable investment, applicants must invest in:
   1. new property developments categorised as:
      • residential property; or
      • commercial property; or
      • industrial property; or
   2. existing commercial or industrial property developments.
2. If the new or existing property developments are located on sensitive land, this will only be considered an acceptable investment if:
   1. consent for the purchase has been granted under the Overseas Investment Act 2005; or
   2. the transaction is exempt from the requirement for consent under the Overseas Investment Act.
3. Evidence that consent has been granted for sensitive land, or that an exemption applies includes:
   1. A notice published by the regulator under the Overseas Investment Act 2005; or
   2. A letter from a New Zealand barrister and/or solicitor with a current practicing certificate issued by the New Zealand Law Society confirming that a class exemption applies.
4. A business immigration specialist may seek further evidence if they are not satisfied that an exemption applies under (c)(ii) above
5. If an investment in sensitive land meets the requirements in (b) above at the time the investment is made, it will be considered an acceptable investment under Active Investor Plus instructions for the remainder of the investment period.
6. For the purposes of these instructions, residential property development(s) is defined as property(ies) in which people reside and is subject to the following conditions:
   1. the residential property must be in the form of new developments on either new or existing sites which contributes to an increase in housing stock available (beyond a single dwelling); and
   2. the residential property(ies) cannot include renovation or extension to existing dwellings; and
   3. the new developments must have been approved and gained any required resource consents by any relevant regulatory authorities (including local authorities), or if resource consents are not available, evidence must be submitted that resource consents have been applied for and accepted by the relevant local authority as complete for processing; and
   4. the purpose of the residential property investments must be to make a commercial return on the open market, including rental returns; and
   5. neither the principal applicant, nor the family or relatives of any person included in the application may reside in the development.
7. For the purposes of these instructions, "family" or "relatives" is defined as the partner, parent, child, grandparent, grandchild, uncle, aunt, nephew, niece or adult sibling of any person included in the application.

   Note:
   -For more information about what may be considered sensitive land, see Schedule One of the Overseas Investment Act 2005.

8. For the purposes of these instructions, commercial and/or industrial property development(s) is considered to be an acceptable investment if:
   1. the property(ies) is not residential or for domestic use; and
   2. the property(ies) is used for business purposes, in that it is:
      • capable of a commercial return; and
      • not vacant land unless plans for development have been submitted to regulatory authorities and work has commenced; and
   3. the purpose of the investments must be to:
      • make a commercial return on the open market; and
      • improve the property, and any associated improvement plans to do so must be submitted to and approved by INZ; and
   4. neither the principal applicant, nor the family or relatives of any person included in the application may reside in the development; and
   5. if a new development, the property(ies) must have been approved and gained any required resource consents by any relevant regulatory authorities (including local authorities), or if resource consents are not available, evidence must be submitted that resource consents have been applied for and accepted by the relevant local authority as complete for processing.
9. For the purposes of these instructions, industrial property includes (but is not limited to) warehouses, manufacturing, distribution, and logistical facilities.
10. Managed funds in property development may be considered an acceptable Balanced Category property investment if the fund:
    1. raises funds for residential, commercial, or industrial property development projects which meet requirements (a) to (i) above; and
    2. is invested only in a New Zealand resident entity; and
    3. is a managed fund investment product offered by a financial institution; or
    4. is invested in equities or debt and managed on an investor’s behalf by a fund manager or broker.
11. If an investment is in a managed fund which is not on the NZTE approved list and has international exposure, only the proportion of the investment that is placed in New Zealand will be deemed an acceptable investment. For example, if 50% of a managed fund is invested in New Zealand, 50% of the principal applicant’s investment will be considered acceptable.

BN7.10.35 Bonds

1. For bonds to be considered an acceptable investment, the funds must be placed in:
   1. bonds issued by the New Zealand government or local authorities; or
   2. bonds issued by a New Zealand Resident Entity traded on the New Zealand Debt Securities Market (NZDX); or
   3. bonds issued by New Zealand firms with at least a BBB- or equivalent rating from internationally recognised credit rating agencies (for example, Standard and Poor's); or
   4. bonds issued by New Zealand registered banks; or
   5. bonds in finance companies, provided the company:
      • is a wholly-owned subsidiary of, and
      • raises capital solely for, and
      • has all its debt securities unconditionally guaranteed by a New Zealand Stock Exchange listed company or a local authority.
2. Managed funds in bonds may be considered an acceptable Balanced Category bonds investment if the funds are placed in bonds which meet the requirements of (a) above.

Note: For the purposes of these instructions, perpetual preference shares and convertible notes are considered to be bonds.

Effective 01/04/2025