By Uglobal Staff
In a country where sheep outnumber people six to one, New Zealand’s wide-open spaces, natural beauty, and quality of life are among its many lures. The country also has a thriving business environment.
New Zealand is ranked in the top 10 for protecting investors, starting a business, and for ease of doing business.
New Zealand offers an Investor 1 and Investor 2 Resident Visa program that include an applicant’s spouse and dependent children under age 24. Under the Investor 1 Resident Visa, applicants must invest $10 million in New Zealand dollars within three years to apply for residence. There is no age limit for applicants and no business experience or language requirements. If a minimum of NZ$2.5 million is invested, applicants are eligible to spend 88 days in the country at any time over the three-year investment period.
The Investor 2 Resident Visa is for experienced business professionals age 65 and younger who have NZ$3 million in assets or funds, who must invest NZ$3 million in New Zealand and keep it for four years. There is a language stipulation that requires English-speaking skills, or an International English Language Testing System test report with an overall band score of three or higher or English fluency.
Applicants must spend 146 days per year in New Zealand, or 438 days at any time over the four-year investment period, if a minimum of NZ$750,000 is invested in growth investments. They can travel in and out of New Zealand for the first two years of the period of investment.
“The program benefits New Zealand by enabling us to bring in additional capital and, often, experienced investors. The benefit for the investors seems to be investment into a stable economy and the ability to live in New Zealand,” said Nicola Tiffen, an immigration lawyer with Cavell Leitch law firm, which has offices in Christchurch and Queenstown in New Zealand.
The length of the application process can vary said Tim McSweeney, senior solicitor for Auckland-based Turner Hopkins Solicitors. McSweeney said it can vary depending upon the lead times of Immigration New Zealand and the individual application itself, which, for example, could take longer if additional information or evidence verifying the origin of investment funds is needed.
“Immigration New Zealand needs to establish that the funds used in the investment are ‘legally earned or acquired,’ so this step can take some time. But, generally, once submitted, an application is processed within six to seven months,” said McSweeney.
McSweeney said his firm has seen a general decline in the number of people applying under the Investor Category since the changes to the policy late last year that “saw the minimum investment under the Investor 2 category moving from NZ$1.5 million to NZ$3 million.” However, Tiffen, said her office has seen an increase in participation in the program over the last few months.
McSweeney said the benefits of the program are that New Zealand stands to gain the skills of successful and innovative business people as well as an injection of funds into the local economy. He said investors have many benefits as well.
“Upon being issued with a residence visa, an applicant has significant privileges, including access to New Zealand’s health system and free schooling for children to high school level,” McSweeney said.
Acceptable investments include those that bring a commercial return; are invested in New Zealand in the local currency and contribute to the economy, are not for personal use; and are invested in lawful enterprises or managed funds. They include bonds issued by the New Zealand government or local authorities; firms traded on the New Zealand Debt Securities Market; firms with at least a Better Business Bureau or equivalent rating; and bonds issued by registered banks or finance companies.
Other acceptable investments include equity in New Zealand firms that are public or private, equities in registered banks, residential property development(s) and commercial property, eligible New Zealand venture capital funds, philanthropic investment, and angel funds or networks’ investments.
Tiffen said, from her experience, what investors invest in varies considerably.
“Many invest in New Zealand equities. Many invest in government bonds, but recent changes to the criteria are steering applicants away from this. Others invest in residential and commercial property development,” she said.
Foreign investment in New Zealand reached $404 billion as of June 30, according to Stats NZ, New Zealand’s official data agency. Equity investment by foreigners reached a record high of $113.2 billion.
Applicants who are granted residency under either of the investor programs are eligible for New Zealand citizenship after they have spent at least 1,350 days in New Zealand during the preceding five years, with at least 240 days in the country in each year.
“To qualify for citizenship, an applicant has to effectively spend at least seven months in New Zealand over a five-year period, after the first grant of residence,” said Tiffen.
Silicon Valley investor Peter Thiel, who has citizenship in Germany and the United States, spent just 12 days in New Zealand over a period of five years before becoming a New Zealand citizen.
While Thiel did not meet the “presence in New Zealand” or “intention to continue to reside in New Zealand” requirements, he was granted citizenship because of “exceptional circumstances” that are in the public interest. Thiel’s investments in New Zealand include technology company Xero and a fiber optic cable between New Zealand, Australia, and the U.S.
“The public interest in Mr. Thiel’s situation stems from him applying his skills in New Zealand through setting up a venture capital fund and investing in and providing assistance to New Zealand companies,” Department of Internal Affairs officials wrote.