New Zealand is known to be one of the least densely populated countries in the world and offers an excellent quality of living, safety, political and economic stability, excellent education, exquisite landscapes, and more. It’s no wonder that it consistently ranks as one of the best countries in the world based on several metrics.

As such, many investors might have considered New Zealand as an immigration destination. With that in mind, we’ll look at New Zealand Investor Visa.

What is the New Zealand Investor Visa?

The New Zealand investor visa is a program that allows applicants to obtain temporary residence in New Zealand with a view of, ultimately, obtaining permanent residence and citizenship. As we’ll show in more detail below, New Zealand currently has two investor visa schemes that are going to be replaced by a single scheme later in 2022.

What are the Benefits of the New Zealand Investor Visa?

There are several benefits to obtaining a New Zealand investor visa. Some of these include:

• Quality of living. New Zealand offers an excellent quality of living with a stable economy, low unemployment rate, good salaries, a higher than average life expectancy and a safe environment. In fact, New Zealand is ranked as the ninth happiest country and the tenth safest country in the world.
• Political stability. New Zealand is politically stable and the possibility of wars or unrest is low.
• Solid legal system. New Zealand has an excellent legal system that is based on English law and provides social protection to the country’s residents.
• Education. New Zealand offers good education with enough schools and spaces for extracurricular activities.

Requirements and Minimum Investments

New Zealand has operated two different investor visa categories for more than 12 years. These were the:

• Investor 1 resident visa. Under this category, an applicant needed to invest at least NZ$10 million in New Zealand over a three-year period. Based on this investment, the applicant could then apply for New Zealand residence under this category. This category also had no language requirement, business experience requirement or age requirements.
• Investor 2 resident visa. This category of investor visa was aimed at experienced entrepreneurs and business people who could invest at least NZ$3 million in an acceptable investment over a period of four years. This program also had more stringent requirements than the program mentioned above and applicants had to be under the age of 65 years. Other requirements included the applicants having an English-speaking background, being competent users of English, or obtaining a band score of three or more in an International English Language Testing System (IELTS) test. Under this category, applicants would qualify based on a points-based system that assesses eligibility.

For purposes of the above categories, an acceptable investment was an investment in NZ$ that can provide a commercial return, and invested in a lawful enterprise or managed funds. The investment had to have the potential to contribute to the New Zealand economy and should not have been for the personal use of the applicant.

However, the effect of these programs was often that migrants invested in shares and bonds rather than in New Zealand companies. In other words, migrants invested in passive investments. As such, these investments were not capable of generating high-skilled jobs and economic growth.

For this reason, the New Zealand government has now introduced the new Active Investor Plus visa category that will open on 19 September 2022 and replace the Investor 1 and Investor 2 visa categories. As a result, any applications under the Investor 1 or Investor 2 categories will no longer be accepted after 27 July 2022, but applications currently in processing will be finalised. Let’s now look at the Active Investor Plus Visa in more detail.

Active Investor Plus Visa

The Active Investor Plus visa category aims to encourage greater economic benefit to New Zealand companies by limiting the amount that applicants can invest in passive investment. As such, unlike the previous categories, applicants can now invest a maximum of 50% in listed equities and the category excludes bonds and properties.

The category requires a minimum investment of at least NZ$15 million. However, it aims to use a weighting system that will incentivise direct investment in New Zealand companies. In terms of this system, direct investments will receive a weighting of three times per dollar investment. This means that an applicant who wants to apply under this category using only direct investments will be eligible with an investment amount of NZ$5 million.

In contrast, the category uses lower weightings for indirect investments. For example, the category gives a weighting of two times to investments in private equity funds, venture capital funds, or listed equities. Similarly, it gives a weighting of one time for investments in philanthropy. And, as mentioned earlier, this category limits indirect investments by limiting the investment in listed equities to 50% of an applicant’s total investment and it excludes bonds and properties from being eligible asset classes.

The category also aims to improve flexibility for applicants. Firstly, it allows applicants to invest over a three-year period and they will be able to maintain their investments up to the end of the fourth year. Moreover, applicants only need to spend at least 117 days in New Zealand during the course of the four-year investment period.

As far as other eligibility requirements go, these will be confirmed by the government soon. However, at this stage, it’s clear that the Active Investor Plus visa category will include an English language requirement. In terms of this, applicants would need an IELTS score of at least 5.0 to ensure that they can share their skills and expertise and engage with the New Zealand investment network.

Dual Citizenship

To determine if dual citizenship is possible, we should first consider whether it’s possible to obtain citizenship using an investor visa. Here, it’s important to note that it’s impossible to obtain citizenship or permanent residency by way of investment. As such, the programs mentioned above only allow the applicant to obtain a temporary residence permit that is valid for the period of the investment.

Two years after the date on which the temporary residence permit is issued, the New Zealand Immigration Service will check to determine if the applicant still complies with the requirements under the investor visa. If the applicant does, they will receive permission to continue to travel freely.

At the end of the period of the investment, the applicant can obtain permanent residence in New Zealand. So, for example, with the Active Investor Plus visa category, the applicant will be eligible to apply for permanent residence after a period of four years. When permanent residence is granted, the applicant can live work and run a business without restrictions and receive free healthcare.

Applicants can apply for New Zealand citizenship after living in the country for five years in terms of a residence permit or permanent residence. When applying, the applicant will need to prove that they have spent at least 1350 days in New Zealand during the preceding five years with no less than 240 days spent in the country every year. New Zealand allows dual citizenship and, as such, once citizenship is granted, applicants do not have to give up their first citizenship.

Tax Advantages

Like many other countries around the world, New Zealand uses a progressive income tax system which means residents pay more tax the higher their income. Here, income tax varies between 10.5% and 39% depending on the resident’s income. In turn, companies pay tax at a rate of 28% and value-added tax at a rate of 15%.

However, unlike many other countries, New Zealand levies no taxes on capital gains, gifts, property, land, transport, or inheritances.

Fees

The fees for New Zealand investor visas vary based on the applicant’s country of citizenship, the visa category applied for, and the applicant’s physical lactation at the time of application.

Visa-Free Travel

Once investors obtain a New Zealand passport, they can travel visa-free to 186 countries and territories around the world including the UK, Australia, South Africa, Japan, and Canada.

Conclusion

Hopefully, this post provided some insights into the older New Zealand investment visas and the Active Investor Plus visa being introduced in September 2022. To learn more about these visas, other immigration programs, or our range of services, visit Smart Citizenship for more details.