The Overseas Investment Act 2005 is a piece of national legislation doused in controversy. It is complex, time-consuming, and difficult to navigate. And yet, since 2005, there have been markedly few attempts to alleviate its onerous requirements.

Suffice to say, a fresh look at the overseas investment regime is well overdue.

Much of the antagonism towards the legislation revolves around the slow, cumbersome and unpredictable investment application process. But all applications are assessed on a case-by-case basis; key to a robust regime is ensuring the legislation operates efficiently, with clear guidelines and explicit reasons for why an application may be declined.

It was a relief then, to see a government press release last week, announcing future changes to the overseas investment regime aimed at improving its efficiency.

Some of the current constraints facing the Overseas Investment Office and impeding the timely processing of applications include limited resources and insufficient staff numbers. Land Information Minister Louise Upston announced that boosting investment application fees between 8 and 166 percent will enable LINZ to “hire more staff to reduce the time it takes to assess applications and improve monitoring and reporting”.

Fees as they stand are not inconsiderable, averaging around NZ$20,000 per application. But for a potential investor looking to purchase an asset worth upwards of $100 million, they probably care less about higher fees and more about faster application processing times and getting on with business.

While government has conceded to this change, it does not mean they should not also consider other, more substantive and potentially more effective changes.

“The reality is,” as MinterEllisonRuddWatts Chairperson Cathy Quinn recently argued, “that New Zealand has relied on, and continues to need, foreign investment to grow and develop New Zealand business for the economic prosperity of our nation”.

Quinn’s recommendations for overhauling the existing regime broadly align with the Initiative’s policy recommendations. Our first priority is to adopt a general policy of non-discrimination towards overseas investors. Foreign investors should be neither subsidised nor discriminated against as compared to local investors. Further, the legislation should consider the sale figure received by the vendor as a benefit in assessing applications. Better still would be to narrow the definition of ‘sensitive’ land as public opinion permits.

All the same, this is a small victory towards an improved investment regime and, hopefully, the first step towards legislation that better reflects the major role foreign investment naturally plays in a small, open economy like New Zealand's.