by Iain Macleod
29. July 2009 03:32
The New Zealand Government released its long awaited business investor policy today.
The notable changes are:
- No more global investor policy requiring NZ$20 million invested – investment amounts are now $10m or $1.5million
- Recognition that English language is not as important to the outcomes the Government seeks than under previous policy
- Simplification of where the money must be invested making it easier to satisfy investment requirements
- More sensible investment options available
- Reduction of the time funds must be invested from four years to three in one of the two categories
Today the options for Investors has gone from three categories to two but represents a huge step forward in a policy area effectively killed off by the Labour Government. We now have something that can be marketed to the world and which makes clear NZ is open for business again to the wealthy who have capital to contribute to New Zealand and be available to New Zealanders.
One pathway is now available to what I would term a seriously successful investor at $10 million and the other far more accessible for more people and may in fact satisfy demands for a (semi) retirement visa that have bubbled away under the surface for many years. These two policies have been given the names Investor Plus and Investor respectively.
The Investor Plus category importantly removes the barrier that the high standard of English created in the previous policy which largely resulted in those that were non native English speakers shut out regardless of how successful their business backgrounds and their ability to make serious investments in New Zealand’s future prosperity. This is typical National Party territory and a clear recognition that they are serious about inward direct foreign investment. They realise full well that much of it these days is only going to come from Asia and to be competitive we need to have a policy that is attractive to everyone with the capital and desire to invest here and not just those from a few select countries. It is also a recognition that another immigration policy of the previous Government was an abject failure but finds good balance between what wealthy migrants can offer us and how high we place the bar for them to join us. A nice balance has been achieved in my view.
Under the more plainly titled Investor Policy the importance of English language is down graded (but not totally eliminated) and the amount of investment funds has fallen to $1.5million making it far more attractive. The upper age limit under this category has been increased to 65.
Overall these changes are solid and the Government we believe will not struggle to fill the 300 places (applications, not people) they have allowed under the category.
At last a sensible marketable policy that will not only enable very wealthy to invest in New Zealand and secure residence but under the Migrant Investor policy create an opportunity for the reasonably well off to make New Zealand their new home.
It is not often a new policy is released that we do feel is flawed but it is hard to see too many in this one. There are some however. In particular the Investor Policy has the appearance of a Dutch auction i.e. there is no automatic ‘pass mark’ so investors will not know when they file their applications that they are certain of being selected with any particular numerical points claim. That may well be Government’s intention but we suspect it is a flaw that might come back to haunt them. Migrants want, in fact demand, certainty and rich ones have the luxury of demanding even more as they are mobile and can take their money elsewhere. As yet it is unclear what would happen if for example someone is selected from the pool with say 60 points but the pass mark required to have been selected was only 45 points. Those 15 points represent $750,000 in additional investment funds the 45 point applicant does not need to invest for three years. Would the 60 point investor be able to reduce the points they claimed they would invest to the minimum to get them to 45 points or would they have to submit a new Expression of Interest and start over?
Nobody yet knows but overall this is a good policy and we welcome the return to a policy we can actually market that will be good for the country.
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