Guest Post: James Usmar Senior Investment Advisor Hobson Wealth

As the New Zealand economy seeks to establish itself on the global stage once again, Immigration New Zealand is looking to attract new migrant investors who are interested in building businesses, increasing innovation, and making their mark in New Zealand.

In this article, James shares his insights on the Active Investor Plus Visa pathway. 

Understanding investment options 

In 2022, Immigration New Zealand cancelled the Investor 1 and 2 Visa categories – which provided a low-risk, passive pathway to residency – in favour of the new Active Investor Plus Visa category with the expectation it would attract wealthy investors to New Zealand. 

At Hobson Wealth, our team has had a lot of client success with previous investor visa categories, benefiting both New Zealand’s philanthropy and economy. And while the new Active Investor Plus category has seen a slow uptake – likely due in part to its complexity, higher minimum language requirements, and the technical, high-risk nature of the new acceptable asset classes – it is now beginning to gain momentum. 

As at the end of July 2023, New Zealand Immigration has received 29 applications. Of those, three were approved and 15 were approved in principle. We understand that applicants are well balanced geographically with strong interest from Europe, US, and right across Asia including China and ASEAN markets.

The new iteration of the category is a substantial change to the previous system. At a high level, the investment criteria for the Active Investor Plus Visa requires the investor to: 

• invest a total of between NZ$5 million and NZ$15 million (depending on a weighting system that incentivises more ‘active’ investments). 
• invest across three years and maintain the investment for a further fourth year. 

Investment classes

Acceptable investments carry different weightings towards the NZ$15m investment threshold (and an investor may invest across a combination of these: 

• Private business investments will receive the highest weighting (3x), e.g., an investor could meet the required investment amount by investing NZ$5m into direct investments. 
• Private equity or venture capital funds investments will also be upweighted (2x), e.g., an investor could meet the required investment amount by investing NZ$7.5m into private funds. 
• Listed equities and philanthropy investments will receive no additional weighting and each are capped at 50% of the NZ$15m investment requirement, e.g., an investor could meet the required investment amount by putting NZ$7.5m into listed equities and NZ$7.5m into eligible philanthropic causes.

Determining the best pathway or combination of investments will depend on your personal and financial situation. Each carries differing degrees of risk. 

Direct investments in early-stage companies require only NZ$5m, but have the highest level of financial risk, necessitating thorough analysis, hands-on management, and specific business knowledge. 

By combining asset classes – NZ$7.5m in New Zealand listed equities and NZ$3.75m in managed funds – investors can spread risk across markets, companies, and fund managers. This offers reduced overall risk, increased liquidity and the benefits of diversification.

At the end of July, NZTE has 23 approved funds, including a mixture of VC, PE and debt funds. There are currently over 40 approved direct investments, 22 of which are currently on Live Deals. 

Given the complexity of these options, our experience indicates investors want local expert advice to help create a portfolio tailored to their needs. 

Hands-on approach 

Having navigated the complexities of the new Investor Visa process, we believe it’s crucial to seek professional assistance to meet all application requirements. It’s important to find a financial advisor and immigration team that align with each other, have good communication, and share your values as an investor and migrant.

This will ensure your investments align with Immigration New Zealand guidelines, your capital is placed in qualifying assets, and all timings are accurate. This aspect of the new Investor Visa is significantly more complex than previous visas, so any errors could prove costly.

Working together for success 

Hobson Wealth’s dedication to research means we provide tailor-made services resulting in optimal results for every client. 

When our team consults with migrant investors, they receive insights into the investment aspects of the visa process, an overview of the New Zealand economy, and available investment options. Clients are then connected with professional and experienced immigration lawyers like those at NZIL.

Due to the complexity of meeting Immigration New Zealand’s visa obligations – including raising capital at the right time, verifying investments, and tailoring them to our clients’ portfolios – there are a lot of moving parts.  And, having successfully completed our first visa application under the new scheme, we feel a team approach is the best way forward to meeting Immigration New Zealand’s investment criteria. Working closely with your immigration advisor to fulfil all visa obligations ensures the best possible outcome.

Quality financial advice should remove the stress from an applicant’s investment choices and enable them to make strong and well-researched decisions that meet their goals and objectives. 

The future looks bright 

From space tech to agriculture, New Zealand is an exciting place to invest, with plenty of opportunities to make a valuable contribution to the country’s future. 

New Zealand businesses punch far above their weight on the global stage and, with the size of the market here, many business leaders are looking for help, support, knowledge, and experience in different markets. 

Although the Active Investor Plus Visa categories appear more complex, there are early signs of New Zealand attracting innovative investors. These investors will undoubtedly contribute to the growth and success of New Zealand businesses, the economy, and the country.