By James Hall
New Zealand has long been a haven for investors seeking stability, growth, and a high quality of life. The landscape evolved with the introduction of the Active Investor Plus (AIP) visa in September 2022.
Investor visas have been a significant component of New Zealand's immigration policy, attracting more than 3,000 applicants and families to invest more than 14 billion New Zealand Dollars (NZD) since 2009 through the Investor 1 and 2 visas.
The Active Investor Plus replaced these visas, building on this success by aligning with global trends and focusing on higher-value, higher-reward asset classes while offering a flexible and secure residence-by-investment (RBI) pathway for global investors.
WHY DO WEALTHY INDIVIDUALS CHOOSE NEW ZEALAND’S INVESTOR VISA?
New Zealand isn't just a backdrop for epic movies or a playground for adventure seekers. It can be a sanctuary for individuals seeking a balanced life.
It has stunning landscapes, a temperate climate, and cities that blend the cosmopolitan with the serene. Add to that a robust economy, a transparent and stable political environment, and a society that values diversity and inclusion.
New Zealand consistently ranks amongst the top countries globally in quality of life, healthcare, and education. It's a country that offers financial stability and a community where investors and their families can flourish. For many, the country is not just a destination but a lifelong dream, a place that promises prosperity and well-being.
KEY FEATURES OF THE ACTIVE INVESTOR PLUS VISA
The Active Investor Plus visa comes with several enticing features. Primarily, it encourages investments into high-growth potential companies and approved private equity or venture capital funds. Investing in these areas can reduce the required investment from 15 million NZD to as low as NZD 5 million for direct investments and NZD 7.5 million for approved funds.
New Zealand government guidance and support
New Zealand Trade and Enterprise (NZTE) now takes an active role in the success of this visa program. While Immigration New Zealand (INZ) is responsible for the administrative aspects of visa processing, NZTE takes on a more holistic role.
From the moment an investor shows interest, NZTE provides comprehensive support. This includes disseminating detailed information about investment opportunities and the New Zealand market, helping investors make informed decisions.
The agency also helps in network building. NZTE has a global network of investment experts who assist investors in connecting with local businesses, government agencies, and other stakeholders. This aid is crucial for investors new to the New Zealand market and looking to establish themselves quickly.
By offering this support, NZTE facilitates the visa process and ensures investors have all the tools they need to succeed in their New Zealand journey.
KEY REQUIREMENTS FOR NEW ZEALAND’S RBI PROGRAM
The Active Investor Plus visa is a game-changer in the investment migration landscape. Unlike a one-size-fits-all program, this visa employs a weighting system encouraging investors to channel their capital into New Zealand's high-value, high-growth sectors.
At its core, the visa mandates an investment based on NZD 15 million. However, the actual amount hinges on the type of investment based on a weighting system, which can reduce the actual investment to NZD 5 million. The funds can also be incrementally invested over three years, with the full investment held for another fourth year. The residency requirement is a minimal 117 days in New Zealand and is required over the four-year investment period.
The investment classes and their respective weightings are:
- Direct Investment: For investors looking to invest directly into private businesses, this class receives the highest weighting, a 3x multiplier. An NZD 5 million investment in this category would meet the NZD 15 million requirement.
- Managed Funds: Investments in managed funds (private equity or venture capital funds) are also given preferential treatment and receive a slightly lower weighting of 2x. This means an investment of NZ 7.5 million in approved funds would meet the visa's investment criteria.
- Philanthropy or Listed Equities: These investment classes are also acceptable but come without any additional weighting. Each category is capped at 50% of the NZD 15 million investment requirement. For instance, an investor could invest a maximum of NZD 7.5 million in listed equities to meet the investment threshold, with the remaining investments of NZD 2.5 million in approved direct investments or NZD 3.75 million in approved managed funds.
Besides the investment requirements, this investor visa has a mandatory English requirement for the principal applicant, who must demonstrate an English-speaking background (education using English as the language of instruction) or undertake an English language test. The minimum test scores for IELTS are 5.0 overall and for TOEFL iBT an overall score of 35.
NEW ZEALAND’S INVESTOR VISA COMPARED WITH THOSE OF THE U.S. AND AUSTRALIA
The Active Investor Plus visa is a significant evolution for New Zealand's investor migration approach, with features that make it more appealing than similar programs in countries like the United States and Australia.
It features an Approval-In-Principle process that assesses the applicant's eligibility before requesting investments. Investors are then given an initial six-month window to commence their investments, which can be incrementally made over the first three years and must be fully maintained in the fourth year.
This attribute contrasts with the U.S. EB-5 Immigrant Investor program, where investments must be made upfront, and Australia's visa program, which typically requires investments within a mere 70 days.
Further enhancing its appeal, the Active Investor Plus visa grants holders access to residence benefits, including education and health subsidies. This is particularly noteworthy given that Australia has currently suspended its Business and Investor program, with no clear indication of when it will resume. Even when active, Australia's program required investors to stay on a temporary provisional visa for between three and five years without any residency benefits. Additionally, even upon obtaining permanent residence, there were ongoing requirements to maintain it.
In contrast, New Zealand offers a permanent residence visa without expiration, travel limitations, or ongoing requirements. This is often considered a de-facto citizenship, providing lifelong access to another country without further qualifying conditions. It is a significant advantage, especially compared with the ongoing obligations in Australia, which have proven cumbersome for investors wishing to maintain overseas residency while retaining rights in another country.
A STEP-BY-STEP GUIDE TO APPLY FOR NEW ZEALAND’S INVESTOR VISA
Understanding the requirements. Investors should meet with a Licensed Immigration Adviser for New Zealand to understand the full visa requirements to develop a strategic approach to complete the process. A licensed adviser is critical - the New Zealand government has mandated any individual providing New Zealand immigration advice whether in New Zealand or overseas must be licensed (unless exempted by law).
Applying for the visa.
They must submit their application to Immigration New Zealand. While the application is completed online, it's recommended this is made with the guidance of a licensed immigration adviser. Immediate family members including a married or de facto partner, and dependent children up to 24 years of age can be included in the application.
Obtaining the Approval in Principle. Once submitted, Immigration New Zealand will review the application. If all goes well, the investor receives an “approval in principle.”
Transferring funds to New Zealand.
After receiving the approval in principle, the investor can apply for a work visa, which allows visiting New Zealand to arrange the transfer of funds in the country. Investors have an initial six-month window to transfer their nominated funds, with a possible extension of another six months if needed. The funds must go into acceptable holding investments, such as government bonds or term deposits in New Zealand-registered banks.
Initial investment and residency.
Once the funds are in place, the investor will make their first acceptable investment, officially starting the investment period and the issuance of a four-year residence visa. The minimum investment varies depending on the asset class, ranging from NZD 100,000 for direct investments, NZD 500,000 for managed funds, or NZD 1 million for listed equities or philanthropy.
Transferring further funds from holding investments into acceptable investments.
Investors must have invested at least NZD 7.5 million (or weighted equivalent) by 18 months after the initial investment, and the full NZD 15 million (or weight equivalent) after 36 months.
Visiting or living in New Zealand.
The principal applicant must reside at least 117 days in New Zealand over a 48-month investment period.
Applying for permanent residence.
After 48 months and meeting all conditions, investors can apply for a permanent resident visa. At this stage, Immigration New Zealand will verify that all visa conditions covering stay periods and investments have been met.
An application for New Zealand citizenship can be made after five years, inclusive of the four-year investment visa period. Additional requirements apply, including significant periods of living in New Zealand during these five years.
GLOBAL INTEREST IN NEW ZEALAND’S RBI PROGRAM INCREASES
As of November 2023, Immigration New Zealand had received 41 Active Investor Plus visa applications, with strong interest from the U.S., Europe, and Asia. Ten visas had been issued by then, and a further 12 had been approved in principle. These applications represent a potential investment of more than NZD 430 million, with 59 direct investments and 26 managed funds approved. For the quarter ending September 2023, of the acceptable investments made, 71.47% went into direct investments, 19.04% into listed equities, and 9.48% into managed funds. NZTE works with almost 600 leads globally, indicating robust interest in this new program.
The Active Investor Plus visa significantly evolves New Zealand's investor migration landscape. With its focus on high-value investments and the support of NZTE, it promises to be a game-changer for both the country and global investors.
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