In our previous blog, we explained the challenges of the current entrepreneur visa, including long delays at each stage and high decline rates. We also mentioned that a review is ongoing.
On 27 August, the Minister of Immigration and Immigration New Zealand announced the first outcome from that review.
The new Business Investor visa will be introduced and will provide a NZD $1 million investment pathway over 3 years for work to residence, or a NZD $2 million pathway for a 12-month fast track category.
This visa is for investment in profitable existing New Zealand companies, not start-ups.
Here are the eligibility requirements:
- Applicants must purchase at least 25% of the equity.
- The existing company must employ at least 5 staff, and early media reports suggest that at least 1 more staff member must be added.
- The existing businesses must be running for at least 5 years, meet a financial threshold, and employ at least five full-time staff.
- The applicant will need to show that they have at least NZD $500,000 to support themselves and their family.
- They will need to be 55 years or younger when they apply (whereas there is no age limit for the current entrepreneur category).
- They will need English at IELTS 5 equivalent, unless they are from Canada, the US or the UK.
- They must meet normal health character and business experience requirements.
- The work visa (and dependent visas for family members) will be for up to 4 years – residence is applied for during that time.
Some businesses are excluded
There are some important exclusions, including the following:
- Drop-shipping.
- Gambling.
- The manufacturing of tobacco or other nicotine-based products, including vaping.
- Adult entertainment.
- Convenience stores (e.g. corner stores and dairies).
- Businesses that offer immigration advisory services, or that were purchased from a Licensed Immigration Adviser (LIA), or where an LIA is materially involved.
- Discount or value stores (for example, NZD $2 shops).
- Fast food outlets.
- Franchised businesses.
- Home-based businesses (businesses only operating from a residential address).
Questions yet to be answered: More details in October
Announcements are not Immigration Instructions. The full details of this new category, including its start date, will be announced in October this year.
Detailed rules about requirements for time in New Zealand while running the business are yet to be provided. However, early media reports have suggested that 184 days a year may need to be spent in the country.
Currently, applicants for the entrepreneur category need to be in New Zealand full-time and cannot commute between New Zealand and other countries.
It is also not clear whether New Zealand Trade and Enterprise will retain its existing role of visiting proposed businesses. Their role is to look at growth or export potential.
Goodbye entrepreneur category
The current entrepreneur work visa category is closed to new applicants. Existing Entrepreneur work visas, however, can be renewed and/or progress to residence.
In reality, as our research shows, there are very small numbers.
Will startups be added?
The Minister of Immigration is separately looking at a category for those wishing to set up a new business with scalable and innovative ideas. An announcement is yet to be made in this space.
Summary
Good news for those with significant capital to invest:
- Focused on higher quality well well-established and profitable businesses.
- Due diligence in the NZ business will be important.
- Now has an age limit of 55 years.
We’ll know more in October, so watch this space!
If you’d like to receive an update in October, please email Ri***********@*************co.nz.
In the meantime, the Active Investor Plus Growth Visa remains the premium business product on the market for those with the equivalent of NZD $5 million to invest.
Contact our friendly team for advice.