Business Migrant Update
The long awaited new business migrant policy has finally been released by Immigration New Zealand.
The investor category has been completely overhauled, with the existing categories abolished and two new categories, the imaginatively titled Category 1 (Investor Plus) and Category 2 (Investor), introduced in their place.
Category 1 requires $10 million dollars of investment in New Zealand over a period of three years, with no additional requirements on English, age or business experience. The applicant needs to spend 20% of the last two years of the investment period in New Zealand before being granted residence. This category replaces the Global Investor category which required investments of $20 million dollars for the same privilege.
Category 2 is a points based system, with a minimum requirement of maintaining investment of $1.5 million dollars or more over a period of four years, being aged 65 or younger, achieving an IELTS English score of 3, and possession of an additional $1 million dollars for settlement purposes. This category replaces the Active Investor Category which required a minimum investment of $2.5 million and an IELTS English score of 5. However, under Category 2, meeting the requirements is by no means a guarantee of success, as the points system allows Immigration New Zealand to select the applicants with the highest score or in possession of other special merits, out of an annual quota of 300 places. Successful applicants also need to spend 40% of the last three years of the investment period in New Zealand before being granted residence.
The usual health and character requirements apply for both categories.
The new policies are simple, streamlined, and intended to attract migrants by offering residency for smaller amounts of investment and slightly lower English requirements. This new direction makes sense given that the present global economic environment has tilted wealth towards many non-English speaking countries, some of which are anticipated to play a leading role in the slow but sure global economic recovery. Lowering the English demands makes New Zealand a more attractive investment destination.
In terms of the criteria for acceptable investments, residential properties continue to be excluded due to the dual concern of potentially creating a housing bubble (property owners may disagree), and widening the pool of eligible candidates excessively. However, investments in New Zealand companies' shares, bonds, convertible notes, managed funds invested in New Zealand equities, and, lastly and perhaps most interestingly, central and local government bonds, are explicitly confirmed as acceptable forms of investment. This presents a huge departure from previous policies where the "activeness" of investment was stressed and enforced. Now it seems the government is quite happy to see some idle cash parked at our shores for predictable periods, which will inevitably contribute to public and private lending at a time when the cost of money is at a multi-decades high. By including public debt in the list of acceptable investments, the government may have intentionally or accidentally introduced some demands (and hence a cap on the yield) for government bonds, which are likely to be issued in abundance for years to come to fund the forecasted government budget deficits. At a time when the US president has to go on road shows to market its treasury notes, John Key may have pulled off a low profile coup if his plan of injecting liquidity into the economy through immigration policy achieves the desired effect.
(Interesting side note: assuming the 300 places under Category 2 are fully allocated, with a mean average investment amount of $5 million dollars, $1.5 billion dollars will be introduced into the local economy per annum. This excludes the yet to be identified multi-millionaires who may apply under Category 1, which does not have an annual cap.)
Independent of the changes above, the Entrepreneur Category also receives an optional upgrade. Providing an applicant is investing $500,000 or more in a new or existing business, and undertakes to hire at least three full time New Zealand resident employees, a 'conditional' residence permit will be issued immediately upon the application being approved. How 'conditional' this class of residence permit is remains unknown, as details are yet to be released. However, the existing Entrepreneur Category will not be replaced and remains available to those who prefer not to commit to the extra requirements in order to speed up their applications.
Like an efficient airline, the New Zealand investor immigration policy has been readjusted to cater for the affordability and expectations of different classes of customers. But as any airline operator will testify, getting the supply right is only half the job done, as wildcard factors such as oil price and pandemics will undo well designed plans overnight. In respect of business immigration policies, the wildcard role is assumed by the beast called the global economy, which ultimately dictates the availability of capital. Nevertheless, New Zealand, long regarded as one of the more desirable places to live, has just slashed its entry price. Like the current economic dislocation, it may be an once-in-a-generation event.
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Last updated: 17 August 2009 |
