Govt wants to cut red tape around overseas ownership

Limits and controls on overseas ownership of New Zealand companies and land could be relaxed as the Government seeks to develop a screening regime which cuts red tape and encourages more foreign investment.

The review of the 2005 Overseas Investment Act was announced by the Prime Minister when he spoke at Act's conference on Saturday.

The review's terms of reference will be detailed by Finance Minister Bill English this week.

While a new regime needed to protect "sensitive" land, assets and resources, John Key said, aspects of the act and attendant regulations were not working efficiently or effectively.

It was important to send the "right signals" to potential foreign investors.

Consistency and predictability was needed in the way the legislation was written and applied, particularly regarding what was or was not a "strategic asset".

Law firm Chapman Tripp this month said the act was intended to provide greater protection to "iconic" sites while ensuring a liberal foreign investment regime and reducing compliance costs where feasible.

However, technicalities in the act were preventing it from achieving the second and third objectives.

Land Information New Zealand had noted the number of applications for consent had risen rather than fallen as originally predicted and turnaround times were up substantially.

It had advised that the effect of these in combination was "reducing the attractiveness of New Zealand as a place to invest".

The act regulates the acquisitions by overseas persons of 25 per cent or more ownership or control interests in sensitive New Zealand land, significant business assets where the value exceeds $100 million, and fishing quota.