CHRISTCHURCH – The New Zealand government is moving to establish a permanent regulatory exemption scheme designed to attract global technology firms and accelerate the adoption of emerging industrial tools.
Minister for Regulation David Seymour has proposed the creation of “Innovation Trials,” a framework that would allow companies to temporarily bypass specific regulations within defined regions. The move aims to pivot the country toward a “regulatory sandbox” model, reducing the administrative friction that currently prevents high-capital sectors from entering the domestic market.
This approach mirrors the regulatory sandbox pioneered by the United Kingdom’s Financial Conduct Authority in 2016. Such frameworks allow firms to test new products under relaxed rules and direct regulator supervision, a strategy now utilized across several OECD member states to foster fintech and healthtech growth and, increasingly, to manage the policy risks created by fast-moving technologies.
While the New Zealand Financial Markets Authority has previously piloted a fintech-specific sandbox, the proposed “Innovation Trials” would expand this capability across multiple sectors and sit alongside existing oversight by agencies such as the Civil Aviation Authority and Medsafe, rather than replacing them.
The scheme targets several high-growth industries:
- Autonomous Transport: Driverless vehicle deployment and urban mobility pilots operating under time-limited exemptions.
- Precision Agriculture: Heavy-lift drones and automated farming systems designed to address labour shortages and productivity constraints.
- Biotechnology: Clinical trials and cell-cultivated food production, where regulatory uncertainty has been cited as a barrier to investment.
- Digital Finance: Artificial intelligence and next-generation payment systems that can be monitored in a controlled environment before full market entry.
The proposal comes amid concerns that New Zealand’s regulatory speed is deterring foreign direct investment and pushing global firms to test new products in competing jurisdictions first. In discussions with Uber regarding the introduction of driverless cars, Seymour stated that the company indicated “they wouldn’t be trialling their technology, they would be trialling the New Zealand Government.”
The Minister identified the Civil Aviation Authority (CAA) as a primary example of regulatory inertia. Under current rules, agricultural drones weighing more than 25kg cannot be operated on farms without a certification process that Seymour noted can cost up to $2,000 and take over a year to complete.
Despite the Ministry for Regulation identifying these drones as candidates for a trial-which would suspend weight limits on specific farmland to collect data-the CAA has instead placed the matter on a two-year work programme. Seymour argues that, without a formal mechanism like Innovation Trials embedded in the government’s wider regulatory stewardship framework, such delays are likely to persist.
“A front door for innovation, not a back door.”
Seymour argued that such delays place domestic producers at a competitive disadvantage. “In two years, there will almost certainly be new technology which puts Kiwi farmers even further behind the 8-ball,” he said, adding that a rules-based trial system would make it harder for agencies to leave proposals in indefinite review.
The strategic objective is to link regulatory flexibility directly to national productivity and wage growth. By creating a “published, permanent pathway” for any company globally to apply for exemptions, the government intends to move away from ad hoc ministerial favors toward a transparent corporate governance framework with clear eligibility criteria, time limits, and reporting obligations.
Officials say the trials would still be bound by core safety and consumer-protection requirements under New Zealand’s primary regulatory statutes, including oversight by the Parliamentary and Cabinet processes that govern changes to delegated legislation. The government also wants Innovation Trials to generate structured evidence that can inform future rule changes, rather than one-off exemptions that quietly expire.
The proposed framework seeks to provide companies with a guaranteed timeline and a clear legal path to prove technical viability. This shift is intended to attract investment in sectors Seymour described as being “worth billions,” while giving regulators a structured window to assess real-world impacts before deciding whether to permanently change the underlying rules.
The proposal now awaits formal integration into the government’s regulatory reform agenda and subsequent Cabinet consideration, where ministers will need to decide how Innovation Trials interact with existing sector-specific regimes and the wider push to streamline New Zealand’s regulatory system.