The OECD ranks New Zealand as among the most restrictive foreign investment regimes in the developed world - which dispels the popular view we are easy pickings for investors, says think-tank the New Zealand Initiative.

An NZI report analyses the Organisation for Economic Development's Foreign Direct Investment regulatory restrictiveness index published in April. This shows New Zealand has the sixth most restrictive foreign investment regime of 55 developed economies.

NZI research fellow Luke Malpass said the view that New Zealand was really open for anyone to come and invest was not true.

The index measures statutory restrictions on a country's FDI, including screening and prior approvals, key personnel and equity and operational restrictions. Most of New Zealand's negative rating comes from its screening of investment applications, he said.

"New Zealand relies more than any other OECD country on ministries and ministers second-guessing investment intentions and possible outcomes on the most contrived criteria."

Of the 55 countries measured, 35 didn't have screening restrictions.

Malpass said though New Zealand's foreign investment regime restricted investment only in "sensitive land", this category is absurdly broad. It includes any rural land of more than 5 hectares and anything larger than 0.4ha near inland water.

New Zealand also had the most restrictive regime on the index in manufacturing, which badly needed capital, Malpass said.

The merged entity of two think-tanks - the New Zealand Business Roundtable and the New Zealand Institute - the NZI argues for abolishing the screening rules altogether, as recommended by the OECD and supported by Treasury.

A spokesman for Finance Minister Bill English said the Government was aware of criticism the foreign investment regime was too restrictive, yet others criticised it as too liberal. The Government had no plans for change.

New Zealand Council of Trade Unions policy director Bill Rosenberg said other than land and fishing quotas, most investment in New Zealand was "virtually uncontrolled".

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