Immigration Minister Michael Woodhouse says changes to the migrant investor policy will encourage investments that provide greater economic benefits for New Zealand. The government has confirmed that is setting new investor criteria from May 2017. The changes include:

  • Doubling the funds Investor 2 migrants must invest to $3 million
  • Removing the need for Investor 2 migrants to hold $1 million in settlement funds
  • Recognising higher levels of business experience and English language skills through changes in the points system
  • Increasing the annual cap of approved Investor 2 migrants from 300 to 400.
  • Rewarding investment in growth-oriented investment with incentives such as bonus points, priority processing, and a financial discount.

The word from my sources is this change was expected to be announced in February 2017, with the same implementation date.

I suspect the timing of the release is to ensure the news slips under the radar while there is some other political distraction drawing people’s focus (read: PM’s resignation).

The reason for the stealth  – the Investor categories have been the most successful in bringing income and cash flow into New Zealand so they certainly don’t want to cause jitters in the market they are trying to attract! 

I have been in practice for 20 years and seen many versions of Investor categories come and go. The current ones are the most successful. It has generated an impressive level of inflow of capital. But the NZ government wants more. My sources say the target is NZ$7billion per annum. 

However like all predecessors the Government has got dissatisfied with the type of investment made by applicants under this category. In a prior iteration of this category the Government became frustrated that Investor applicants were only placing the funds in term deposits and not making active investments. And here we are again! 

That is no surprise given the profile of the Investors they are dealing with. The Investors are often at a stage in life where they have made their money from being entrepreneurial in their home country. Now they have built a “nest egg” they can use for investment, and migration to NZ (possibly with the intention of entering semi-retirement) they are in a conservative mode wanting ensure those funds are not eroded.

Bear in mind these are people moving to a new country, shifting a significant level of asset. They are less likely to be familiar with the New Zealand market. As a consequence they will be risk averse in terms of the style of investment. That is particularly so given that “maintenance” of the investment is a condition of the residence visa, which if breached, results in a deportation liability being created.

So you have to ask – is this applicant going to take the risk of placing their funds in an investment that they consider “risky” in a market which is unfamiliar to them and face a threat to their residence?

 Now it may be they change their investment over time one they are more familiar with the market, but that will only be borne out by history and the government will need to monitor investor applicant’s “behaviour” to establish if the change delivers results. They will most likely do that through the surveys they ask applicants to complete. 

The change in the minimum investment of NZD$3million is not significant. To get through the system currently and score enough points for the an Expression of Interest to be selected usually requires most applicants to make that level of investment. 

The removal  of needing prove a further NZD$1million in settlement funds should boost the numbers. It is likely to allow some of those whose EOI’s have not been un – selected because of a lack of investment funds to now move ahead. 

I suspect the change to english is to encourage more applications from outside the China market which has an incredible decline rate in this sector, and is possibly an attempt to appeal to emerging markets. The reference to higher level of business experience is most likely to be intended to give preference to the entrepreneurs rather than those who have acquired their wealth through senior management experience. Possibly this is inspired by a hope that they will apply that entrepreneurial spirit to our economy. 

Overall the changes sound good. But it’s all in the detail of the actual criteria. I can’t wait to see it!

Aaron Martin 

If you want to know more about investment category visa applications get in touch to see how we can assist you on a pathway to residency.