By Anthony DeMarco
The New Zealand government has made changes to its investor visa program to attract more high-value investors “who will bring growth opportunities to New Zealand businesses,” the country’s immigration office said in a statement Wednesday.
The new Active Investor Plus visa category is set to replace two categories that have been in use for more than 12 years and has attracted passive investments. The government said this new visa category is designed to spur direct investment into the country’s businesses.
“The new visa settings will attract active and high-value migrants who will bring their international expertise to help New Zealand businesses to grow, which increases local employment and directly benefits the economy,” Stuart Nash, New Zealand minister for Economic and Regional Development said in a press conference Wednesday.
Active Investor Plus replaces two existing visa categories
The new Active Investor Plus category is replacing Investor 1 and Investor 2 categories.
Eligibility requirements for the new category include a minimum NZD$5 million ($3.1 million) direct investment. It also caps passive investment in listed equities to 50%, excluding bonds and property. The new visa category will open for applications September 19.
Applications under the Investor 1 and Investor 2 categories will not be accepted after July 27, the immigration office said in its statement. All applications in the current pipeline will continue to be processed. The immigration office said that investor immigrant applications with Expressions of Interest (EOI), valid Invitations to Apply (ITA), and applications for Investor categories 1 or 2 will be contacted by the immigration office about what they need to do.
Marcel Booiman, a New Zealand immigration advisor, says the sudden end to the previous investor categories left applicants and immigration officials scrambling to finish applications before the deadline.
“My first reaction to the announcement that the lodgment deadline for all ITA’s was moved to July 27 was one of disbelief and a bit of anger. It could have been so easy just to let the Investor 2 program end by honoring the ITA’s still out there and stop selecting EOI’s. There are apparently many hundreds Investor 1 and 2 applications in the queue to be assessed, so a few dozen more (at most) would not have made much of a difference,” Booiman says.
“It was common knowledge that the Investor category was under review, so changes to the program itself are not a surprise. The surprise is that they have essentially closed the current program immediately, without any concern for people that were working to put an application together. These are complex applications with many documents required. Given the low number of ITA’s sent out in the last months it would not have been difficult to stop selecting EOI’s but at the same time honor the ITA’s that were already sent.”
Booiman said the sudden deadline left him scrambling to complete an Investor 2 application for a client who received his ITA just a few weeks ago.
“It was a mad dash to the finish line, but we were able to put a good application together despite the rush. The clients have however decided last night not to lodge their application after all. They felt this move by the NZ government signaled to them that they and their investment was not welcome, and that the government has shown itself to be an unreliable partner.”
Boosting direct investments through new system
The Active Investor Plus visa category will incentivize direct investment in New Zealand firms through a weighted system. Direct investments will receive three times weighted per dollar invested. This system has a minimum investment requirement of NZD$15 million or weighted equivalent, meaning that applicants who seek to make direct investments will be eligible with NZD$5 million.
This system sets lower weightings for indirect investments, such as private equity or venture capital funds (2x) and listed equities and philanthropy (1x). It limits the scope for indirect investment by capping investment in listed equities to 50% of total investments. It excludes bonds and property from being eligible asset classes.
This system will allow investors to invest over a three-year period and require them to maintain their investments for a fourth year. Investors need to spend at least 117 days in New Zealand over the course of the investment period.
“The number of days an investor needs to be in New Zealand during the investment period is significantly lower, but the minimum investment amount is higher, and direct investments will require the investor to be more hands-on than before,” Booiman says. “I am surprised by the decision to lower the number of days an investor needs to be in New Zealand over the course of the investment (117 days). Four month-long vacations over a four-year period is hardly a commitment to New Zealand society from my perspective. The old Investor program required investors to live in New Zealand for at least 1 ½ years.”
The new system will also introduce an English proficiency requirement. Those wanting to obtain immigrant investor visas will have to score at least 5.0 in the International English Language Testing System (IELTS). Nash says this will ensure investors are able to share their knowledge and skills and be able to engage in the New Zealand investment network.
The managing of the investments and the investors will be moved to the New Zealand Trade and Enterprise government agency, Nash said. Visas will still be managed by the government’s immigration department.
The eligibility criteria for each investment class have yet to be confirmed, the immigration office said in its statement.
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