For the introduction of the kiwi saver scheme in April 07, the NZ Government is changing portfolio investment rules – making investment in NZ and Australian shares free of tax on gains, but tightening up tax of gains on shares elsewhere.  These offshore share value gains will all be taxed annually on an imputed unrealised return of 5% p a.  We have negotiated a carve out for the venture capital industry, and for other investors in young companies which move their incorporation from NZ to raise more money so they can grow internationally.  See pages 12 & 13 of the IRD publication on Offshore Investment Tax.