The Government is starting consultation on a national interest test for screening major investments by foreign companies.
It says it needs the power to stop purchases that might harm public health and safety.
Overseas investments are screened if they involve sensitive land or businesses worth more than a hundred million dollars.
Associate Minister of Finance David Parker said business investments can be rejected only if the purchaser is unable to prove financial capability or good character.
He said the Government needs to consider other factors dealing with infrastructure assets which are important to the function of the wider economy.
"They're not just a business unit in their own right, they're key to the operation of the wider economy," he said.
"There needs to be discretion for the government in respect of some of those infrastructure assets with monopoly characteristics to say 'no we don't think it's in New Zealand's interests to sell that asset overseas.'"
A broad national interest test would be used only sparingly, he said.
The proposal is part of a second round of changes to the Overseas Investment Act after the government last year banned foreign purchases of existing residential property.
Treasury will hold a series of public meetings throughout the country, including meetings with iwi and professional groups regularly involved in overseas investment.
The consultation document can be found here.