LaurentLaw Barristers & Solicitors
1st Floor, Target Building, 93 Dominion Rd
Mt Eden, Auckland, 1024, New Zealand
Ph. +64-9-630-0411; Fax +64-9-630-0412
This, our Business & Investor newsletter provides information about immigration which may be useful to potential business applicants under either the Investor or Entrepreneur programmes. There have been some changes since we last went into print . . .
We also produce a separate Corporate newsletter focusing on employers, and a General newsletter offering advice to prospective and recent migrants to NZ. If you would like to receive either of the other newsletters, visit here on our revitalised website.
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Investor Residence - Lifting the Bar
Earlier this year the Government unveiled a suite of new features for the Investor 2 category of Residence. First and perhaps most far-reaching was the increase in the minimum required investment from NZ$1.5 million to $3 million. Presumably this was to weed out a perceived glut of applications which were of relatively low value to NZ. On the other hand, Immigration scrapped the need to show a further $1 million of "settlement funds". The net effect is that the funds requirement for approval has shifted up by only $500,000.
As Investors are only required to spend part of the year in New Zealand anyway (146 days in the last 3 years of the 4-year investment period), there was probably little point in previously requiring someone to prove that they had enough money to settle down here, when there was an even chance that they would not do so right away anyway.
The Investor 1 (or Investor Plus) category remains unchanged. It has a simple rule - bring in $10 million dollars for 3 years, and the Government will welcome you in with open arms. Having said that,
Charities and Angels
The classes of
for the Investor Residence category have been widened in several ways. Immigration now recognises the ability to put money into
, which are defined as either:
- A NZ charity registered with the Charities Commission; or
- some other approved "not-for-profit organisation that provides social, cultural or economic benefits".
While the existence of a registered charity is easy to prove, it is likely that other unregistered non-profit groups will be scrutinised carefully to see if they meet the 'benefits test'. INZ has now capped the amount of philanthropic donation to 15% of the proposed investment for the visa application.
Investors putting money into NZ have historically chosen a very low-risk portfolio. This is understandable when they have to leave the money in place for 3 or 4 years. If a speculative investment loses significant value, then they could fall below the required investment threshold part-way through, and put their Residence in jeopardy. However, the Government's stated aim was to get money into productive and progressive parts of the economy.
To shift the balance, it is now possible to gain 20 bonus points in the Investor 1 Expression of Interest by proposing to put NZ$0.75 million or more into growth investments. If you offer to put NZ$1.5 million into growth investments, then the minimum required investment reduces from $3 million to $2.5 million. Furthermore, the time spent in NZ during the investment period under either Investor 1 or 2 is significantly reduced for those who promise to acquire a certain portion of growth investments.
So what are growth investments? They are all forms of acceptable investment except bonds and philanthropic investments (see above). The list now includes:
- commercial property, which must be capable of a commercial return; and
- angel funds or networks. These are not defined, and presumably "you know one when you see it". It is likely that investment in these schemes will be rare enough that Immigration will deal with them on a case-by-case basis.
Entrepreneur Visas - Still No Picnic
This is not surprising. As we said in our last Newsletter, the EWV is generally the toughest form of visa application out there. We will only agree to go to the trouble - and charge the fees - for an application if we feel very confident that the client is realistic about what their future business will do; and that the scheme really does deliver "significant benefit to NZ".
There are 3 defined ways that a business proposal can offer that benefit:
- Employment for New Zealanders; or
- Export earnings; or
- New or unique products or services.
The comment from Jacqui Lee at our office is that it can be very difficult to prove that a product is truly new to the NZ market. It would require considerable research to demonstrate that competing products or services do not exist. In the age of global commerce and consumerism, this would also probably entail showing that no-one else in the world was offering something similar, which could not then be sourced by New Zealanders online.
We have thus taken the cautious approach of offering to do a scoping exercise, for a fee, in order to recommend whether the client should make the attempt at all. Better this, than asking someone to pay 10 times as much in fees, only to find part-way through that their venture has no chance of passing the stringent EWV requirements.