Foreign investors will need to work harder to get NZ residency

Immigration Minister Michael Wood. Photo / Mark Mitchell

The Government's new Active Investor Plus Visa category - designed to attract high-value investors - has officially opened.

The new category will replace the existing "Investor 1" and "Investor 2" Visa categories and completely removes the ability for foreigners to gain residence by investing in bonds and property.

It will reward applicants who commit to investing directly in New Zealand companies with high-growth potential. These companies will need to be "okayed" by New Zealand Trade and Enterprise (NZTE).

"The new Active Investor Plus Visa replaces the previous investor Visa categories, which often resulted in investment into passive asset classes such as bonds rather than investment directly into New Zealand companies," Immigration Minister Michael Wood said today.

The new Visa category will mean those who make direct investments will be able to commit to investing smaller amounts than those who make indirect investments.

Those who make NZTE-approved direct investments will only have to invest $5 million.

Those who invest in private equity, venture capital funds, listed equities and philanthropy will have to invest at least $15m.

The previous Visa categories had attracted more than $12 billion to New Zealand over the past decade.

In July, when the policy was announced, National Party Immigration spokeswoman Erica Stanford questioned why the Government was trying to fix something that wasn't broken, especially at a time she believed the priority should be changing settings to bring in more nurses.

Stanford pointed to Productivity Commission research that suggested migrants use investments in lower-risk assets like bonds and equities as a gateway to the sorts of direct investment in companies the Government wants to see more of.

She accused the Government of making the change on a "hunch" that migrants who start off investing passively don't go on to contributing to the economy in more meaningful ways.

However, Economic Development Minister Stuart Nash said over half of that $12 billion has been in New Zealand government or corporate bonds.

He said this made for a "missed opportunity" to attract "more active investors who can deliver real benefits to our economy over a long period of time".