Investment in New Zealand's economy by overseas companies through New Zealand subsidiaries has increased steadily, with the largest contribution from Australian sources, outstripping both US and UK sources in recent years. At the end of 1991, total foreign direct investment (FDI) in New Zealand was $11 billion whereas as of 31 March 2001 total FDI stock was $49.3 billion. FDI from Australia rose from $4.8 billion to $17.2 billion in the period 1991 to 2001; from the United States, $2.8 billion to $7 billion; and from the United Kingdom, $1.9 billion to $6.7 billion. In 2000/01, FDI flow peaked at $7.7 billion, more than double the rates in the previous four years: $2.9 billion in 1997, $3.4 billion in 1998, $1.78 billion in 1999, and $2.96 billion in 2000. Foreign portfolio investment has been more volatile. A small net outflow of $285 million in 1997 was followed by two years of positive inflow ($927 million in 1998 and $747 million in 1999), and by then a large outflow of $6 billion in 2000. In 2001, according to government's statistics, portfolio investment was a record $3.89 billion.
In contrast, the stock of FDI held by New Zealanders in other parts of the world totaled $14.7 billion as of 31 March 2001.
The legal framework for FDI in New Zealand is laid out in the Overseas Investment Regulations of 1995, administered by the Overseas Investment Commission (OIC). Under the regulations an overseas persons must obtain consent to acquire 25% or more any New Zealand business, property worth more than $30 million; acquisition of land is also restricted.