The Treasury has advised the Government that foreign investors would need to be involved in the partial privatisation of state-owned energy companies.
But it does not rule out putting restrictions on foreign ownership to ensure domestic investors are first in the queue to buy shares in the companies.
In the Budget, the Government announced it would sell up to 49% in Meridian Energy, Genesis, Mighty River Power and Solid Energy and sell down its shareholding in Air New Zealand.
In official papers released on Thursday the Treasury says experience from previous sales suggests there can be substantial New Zealand ownership.
It warns however that any incentives to encourage domestic participation should only be used if needed.
If the Government wants to get a good price for the partial sales, the Treasury says, then overseas investors have an important role to play.