Residence through investment

There have been a lot of changes to immigration rules since our borders closed to the world in March 2020. The good news is that our borders have finally re-opened; however, the ability to migrate to NZ, whether temporarily or permanently, has changed. There’s a summary of the current visa and residence conditions here. 

A new category is the Active Investor Plus (AI+) scheme, which will open on Monday, 19 September. The stated aim of this policy is to encourage direct investment in New Zealand businesses. For example, it will no longer be possible to park funds in Government bonds.

AI+ uses a weighting system depending on the types of investment target that you choose. To qualify, you must put between NZ$5 million and $15 million into one or more of 4 classes of investment:

1. Direct investment into private NZ businesses - that is, not just buying shares in listed companies. This gets a 3 x weighting;

2. Private equity funds or venture capital funds. This gets a 2 x weighting;

3. Listed equities such as shares - no extra weighting, and a maximum of $7.5 million; and

4. Philanthropic investments into charities etc., and a maximum of $7.5 million - no extra weighting.

At the extreme ends of the scale, you would meet the policy by putting $5 million wholly into direct investment, or $15 million into listed equities or philanthropy. Or you could create a mixed portfolio in-between, although more precise detail on how this will work is not yet available.

The old Investor 1 and 2 categories required all investments to be made at the outset, and kept in place throughout the whole of the 3- or 4-year investment period. AI+ allows you to make investments during the first 3 years - that is, not all at once. You must also maintain the total investment throughout Year 4 as well.

The AI+ programme is administered by NZ Trade & Enterprise, although visa applications will still be processed by Immigration NZ. NZTE also gives access to information about potential investment opportunities which may be worthwhile exploring. However, our advice to investor migrants is not to make any investments until a Resident visa is approved, or about to be approved.

Other Requirements

The fine detail of the AI+ policy has not yet been released. There are two criteria which we do know about now.

The first is that successful applicants must be in NZ for 117 days over the total 4-year investment period. That amounts to under 4 months, or about a month a year. This is a slight uptick from the 88-day minimum over 3 years under Investor 1.

Secondly, all applicants must prove English ability equivalent to IELTS 5.0 or above. This is more onerous than the IELTS 4.0 imposed by the previous Investor 2 Instructions, and some in the industry have seriously questioned the logic behind it, given that so many business and finance dealings do not rely upon English alone any more. After all, the aim is to attract the investors’ money, not to ‘assimilate’ them into being Kiwis at the outset.

Again, we have no specifics about how this rule will be applied. For example, hopefully nationals of English-speaking countries will not have to sit a test and can instead use their education or business experience to meet the threshold. 

As the policy opening date approaches in late September, we hope to have more to share with our readers.

About the author

Laurent Law have been immigration specialists since 1996 and offer help with NZ visas, business and investment residencies, legal assistance for immigration consultants and litigation services.  

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