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by Simon Laurent. 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.

last updated 13/12/2022

Attracting migrant capital

by Simon Laurent. 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.

last updated 13/12/2022

26 November 2022 – Details have now been published of the new Active Investor Plus scheme. What might it offer to franchisors, franchisees and migrants? Simon Laurent reports

Overseas investors can now invest in New Zealand companies that are not listed on the New Zealand Stock Exchange, and use this investment to obtain Residence in New Zealand.

This is one effect of the new Active Investor Plus (AI+) Residence category, announced by the Minister of Immigration and the Minster of Economic and Regional Development in September 2022.

The objective of the new policy is to attract skilled and experienced active investors to help build globally-successful New Zealand businesses that align with Government’s objectives by providing resident visas to those who wish to participate in New Zealand’s investment ecosystem and make a significant contribution to New Zealand’s economy.

This is not just waffle. The interpretation of what terms such as “significant contribution” mean will materially affect whether visa applicants can successfully invest, and whether New Zealand businesses (including franchises) will be deemed suitable for that foreign investment.

How can you qualify?

So how can your business qualify to attract a ‘direct investment’ from an overseas investor?

Immigration New Zealand has set out criteria for ‘investee entities’ to qualify for direct investment.

‘Investee entity’ is defined as a body corporate (eg. a company) which is Resident in New Zealand and which is not listed on any securities or stock exchange. A body corporate is a Resident if it is incorporated in New Zealand, has its head office and centre of management in New Zealand, and “has control, by company directors, exercised in New Zealand”. 

An investee entity will be an acceptable direct investment if New Zealand Trade and Enterprise (NZTE) is of the view that;

  1. It has previously received, or will receive, capital from an acceptable managed fund; 
  2. It is listed on the NZTE Live Deal platform (as updated by NZTE from time to time); or
  3. It is otherwise acceptable for the purposes of the Active Investor Plus Visa

The NZTE Live Deals platform website ( displays investment opportunities in New Zealand that investors can express interest to invest in. 

If you are a business owner interested in being listed on Live Deals, contact NZTE through the link provided on their ‘Raise Capital’ page. You can also utilise a free online learning tool hosted by NZTE called InvestEd, to obtain support to raise capital. 

The criteria

There are some quite complex criteria that NZTE will refer to in determining whether an investee entity is “otherwise acceptable for the purposes of the Active Investor Plus Visa” – see (3) above. These include; 

  • Whether the direct investment capital is being used to grow the investee entity, create or save jobs, or deliver economic benefit to New Zealand;
  • Whether approval has been given for an investment which is subject to Ministerial approval under the Overseas Investment Act 2005.

NZTE is also likely to have regard to the Investor Residence Objective set out above, and the published Principles for assessing the suitability of potential investment targets, whose characteristics will be that:

  • They have high growth potential, or contribute to “positive social and economic impacts”; 
  • They are legitimate and verifiable businesses;
  • They do not risk New Zealand’s international reputation – for example, an arms manufacturer would probably fail that test.

How does it apply to franchising?

Now may be the time for your business to be a ‘investee entity’ and secure overseas investment to fund your growth. For example, a franchisor could secure capital to fund expansion into further franchise outlets. A larger franchisee could, similarly, use it to open multiple new units. 

It would, of course, be wise to have some kind of business plan for that sort of expansion in hand to present to NZTE, accompanied by sound financial forecasts to indicate that the expansion would be sustainable.

This scheme does not, on its own, contemplate someone bringing in a master franchise from overseas. This would amount to attempting to start a new business in New Zealand, rather than investing in a New Zealand-based business. Someone wishing to do that would have to apply for an Entrepreneur Work Visa, which is a largely dysfunctional policy and not worth considering.

Overseas investors who directly invest in a New Zealand business, which could include franchises, are required to hold an ownership interest in the investee entity approved by NZTE. At the moment there appears to be nothing to stop a migrant investor from holding a majority stake in the New Zealand operation. It could potentially be a problem because it would amount to running one’s own business in New Zealand, which is the province of the Entrepreneur Visa. As the Active Investor Plus policy is so fresh out of the box, this sort of question has not yet been tested in practice.

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