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English: Government To Simplify Foreign Investment Rules

Contributor:
Fuseworks Media
Fuseworks Media
Bill English
Bill English

17 March 2009 - The government is reviewing overseas investment rules to make foreign investment in New Zealand simpler and more attractive, while at the same time protecting sensitive land, assets and resources.

Overseas investment can play an important role in economic recovery and job creation, Finance Minister Bill English said today in confirming the Overseas Investment Act review. However, the current overseas investment legislation is cumbersome and the rules are often difficult to interpret.

"While our overseas investment screening regime is not the most important factor for attracting foreign investment, we think there are significant improvements we can make," he said.

"It has taken too long to process some overseas investment proposals - as a result of the complexity of the legislation - which has added to the costs for foreign investors and may have turned some of them away.

"Current rules are complex and processing a sensitive land application involves the assessment of 27 criteria and factors. The process is too long and too uncertain.

"Some progress is being made in reducing the time and we want to reduce it further," Mr English said.

The overseas investment review, foreshadowed at the weekend by Prime Minister John Key, is part of a wider review of bureaucratic red tape led by Mr English and Regulatory Reform Minister Rodney Hide. Regulatory reform also emerged last month as an important theme from the Jobs Summit.

Many investments in land have to be screened under the Overseas Investment Act because they adjoin areas such as recreation reserves.

"For example, we've had a proposal for a rest home to be screened because it was next to a playing field," Mr English said.

There are three broad parts to the overseas investment review - which will be led by the Minister for Land Information, Dr Richard Worth:

Putting in place some immediate measures, such as ensuring that more applications are decided by the Overseas Investment Office, rather than Ministers. This will mean that applications are turned around more swiftly. These measures will not require any legislative changes. Considering changes to the Overseas Investment Regulations - these changes will require Cabinet approval; Considering changes to the scope of the overseas investment screening regime generally, for example whether screening thresholds which determine the sorts of land considered 'sensitive' should be changed. These changes will likely require amendments to the Overseas Investment Act.

Mr English said the review will focus on the most problematic areas of the legislation, so that unnecessary barriers to foreign investment can be quickly identified and removed. Other areas of the legislation that are cumbersome or difficult to interpret will be clarified and amended as necessary.

"In the current economic situation, access to foreign capital is particularly important for New Zealand firms. We also believe that, beyond the recession, overseas investment will make an important contribution to New Zealand's economic growth in the longer term.

"We will ensure that land of particular significance or importance to New Zealand continues to be protected. But issues such as conservation, heritage protection and walking access may already be well covered by existing legislation."

Cabinet will consider recommendations from the review by June 30 2009 and changes to the Overseas Investment Act will be open to public submissions through the select committee process.

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