NZ fourth best country for foreign investment

NZ got the highest score in that category of all the countries included in the index. Photo / Jason Dorday

New Zealand has been named as the world's fourth most attractive foreign investment destination by a US economic think tank.

Singapore, Hong Kong and Finland were ranked first, second and third, respectively, by the Santa Monica-based Milken Institute.

The institute ranked 136 countries using a zero to 10 score scale across four categories - economic fundamentals, ease of doing business, quality of regulations and rule of law.

New Zealand got a 4.95 score for economic fundamentals, 8.21 for ease of doing business, 8.50 for quality of regulation and 9.60 for rule of law, which was the highest score in that category of all the countries included in the index.

Foreign direct investment in New Zealand had reached $97.3 billion by the end of June 2014, up from $89.7 billion a year earlier, according to Statistics NZ.

Sweden was the fifth-ranked country in the index, followed by Canada, Norway, Britain, Ireland and Malaysia.

Australia was ranked 15th, in between Iceland and Denmark, while the United States was ranked 18th.

Guinea, in West Africa, was the lowest-ranked country, ahead of Burundi, Angola, Haiti and Benin.

Other research, however, tells a different story about this country.

It emerged last year that New Zealand had slipped from 73rd to 146th on a United Nations ranking of prospective countries to invest in over the past decade.

Local think tank the New Zealand Initiative blamed overly restrictive entry regulations, which include a need for investors to become residents.

The relatively low economic fundamentals score this country received from the Milken Institute is likely to have been influenced by strict entry regulations.