The Government is worried investors are being put off by complex rules for overseas investment in New Zealand, Finance Minister Bill English says.
On Tuesday it announced a review of the Overseas Investment Act with the aim of simplifying the process.
Mr English says at present, the legislation is cumbersome and the rules are often difficult to interpret.
The majority of applications for investment in New Zealand are approved. But there is provision for government ministers to block investment deals, as happened last year when a Canadian bid for a stake in Auckland airport was vetoed.
Mr English says the Government is concerned New Zealand will miss out on foreign investment because of the cost and time involved in the application process, and because investors are not sure what the Government will do at the last minute.
Some immediate measures are to be put in place to reduce the time it takes to turn applications around.
Mr English says land of particular significance will continue to be protected but the review will look what sorts of land should be considered "sensitive" under the act.
He says overseas investment could help with job creation during the recession and expects recommendations from the review to go to the Cabinet by the end of June.
The Labour Party says the Government is priming the country's strategic assets for sale to overseas interests.
