Mr English said the rules had been changed to make it easier for local firms to access scarce global funds and make overseas investment in New Zealand simpler and more attractive.
At the same time, the changes would safeguard the country's most sensitive assets.
The changes were the first part of a two-part review, with the second part focusing on changes to the Overseas Investment Act itself.
Labour Party associate finance spokesman David Parker said the changes put public access to the coast, rivers and lakes at risk.
"Loosening the screening process for foreign investors will let in owners of New Zealand land who do not share the traditional ethic of allowing free access.
"There is no doubting New Zealand needs foreign investment. But making it a buyer's market is not in the best interests of New Zealanders."
New Zealand needed quality foreign investment that guaranteed satisfaction to both the investors and New Zealanders, Mr Parker said.
However, Mr English said the current rules were too complex and too difficult to interpret.
At present, 98% of all applications were approved.
"That is why we have cut red tape for overseas investors. This will make the process simpler, faster and cheaper, meaning more local firms get the investment they need when they need it."
Under the changes, ministers had delegated greater decision-making powers to the Overseas Investment Office, which would be able to decide all applications, barring rural sensitive land or land adjoining waterways.
The changes were effective immediately.
That move alone was expected to reduce the number of ministerial decisions by 40% and cut about two weeks from application assessment times, he said.
Also, several types of transactions of a minor, technical or temporary nature had been exempted from the Act.
Examples included some underwriting transactions and sales within a group of companies with shared ownership.
Those transactions resulted in little or no change to the overseas ownership of sensitive assets.
In the next few weeks, the Government would consider the second part of the review, aimed at improving three main areas of the Act. Issues included:
• Whether the thresholds determining which land and business investments were screened and set at the right level so that only genuinely sensitive assets were captured.
• Providing greater certainty for investors, removing the ability to substantially change overseas investment rules during applications - avoiding the situation seen last year with Auckland International Airport.
• Considerably simplifying the screening of investments in sensitive land, while ensuring that overseas investors were subject to a higher standard than domestic investors.
That would ensure investors did not have to meet arbitrary requirements of government departments and that, where it existed, other legislation was used to address New Zealand's interests.
Mr English said the Government would also consider removing the previous Labour government's strategic asset test, which was never properly defined and created considerable confusion and uncertainty.
"Instead, as a final reserve power, we will consider a new national interest test - similar to those in place in other countries."
