Investor Visa Changes
As part of the government’s Immigration Rebalance strategy, plans are underway to replace the investor 1 visa, which requires a $10 million investment over three years and the investor 2 – $3 million over four years. They are being replaced with a new active investor visa requiring $5 million – 50 percent of which has to be active investments in companies – and a $15 million minimum threshold for non-active investments.
Blaming investors for policy failures
During the government announcement, Stuart Nash essentially blamed migrant investors for the failure of the previous policy because they kept on investing in bonds – despite the fact that current rules require Investor applicants to make an “acceptable investment”, which includes bonds.
“Applicants who make acceptable direct investments, among other requirements, will be eligible for the new visa with a $5 million minimum investment and receive the highest rating which is a lower minimum amount than those who choose more indirect investments. The minimum amount required for indirect investments will be $15 million,” said Economic and Regional Development Minister Stuart Nash.
He then announced that investors would have one week before the existing categories are closed. Between 80 to 100 invitations went out to people in writing from the New Zealand Government to invite them to apply for residence under the investor two category with a deadline of four months. Then all of a sudden they get an email to say they’ve only got a week, and after that the invitation is cancelled. It’s a really bad look for New Zealand. What Stuart Nash has effectively done is burn down the house in order to replace it with the ‘house that Jack built’.
Throwing the baby out with the bathwater
The original investment policy has produced $12 billion worth of investment pre-Covid with around $22 billion sitting in the pipeline – which mean it’s actually been a success. So if it’s not producing the type of investment the government wants, why not just change the rules for acceptable investment – why burn down the entire house to replace it with something else? It really is a classic case of throwing out the baby with the bathwater.
Frustratingly, Stuart Nash has made this change without speaking to any migrant investors. I see that as a gross failing on his part – it equates to launching a new product without having done any market research with your target customer.
The policy details are still to come, so watch this space for further updates.