The first, the Growth category, will focus on higher-risk investments, including direct investments in New Zealand businesses. It will require a minimum investment of $5 million for a minimum period of three years.
The second, the Balanced category, will focus on mixed investments, with the ability to choose ones that are lower risk. There will be a minimum investment of $10m over five years.
Other changes include expanding the scope of acceptable investments and removing potential barriers to investment such as the English language requirement.
Speaking to Morning Report on Monday, Stanford said foreign investors would have to put their money into equity under a new residency scheme, not simply leave it in a bank account.
“Well, it doesn’t sit in a bank account for a start. I mean, that’s a fallacy. It has to be invested in equities or bonds, or into property development or commercial property, or philanthropy. Those are the categories.
“... it’s really important that we have more capital in New Zealand.”
Stanford said investors had not raised the issue of being unable to buy a house under the scheme, although she said “we’re certainly having those conversations”, but instead had brought up the barrier of foreign tax rules.
However, she had confirmed an investor would have to remain in the country for a total of only 21 days to satisfy the terms of their visa under the Growth category.
While an investor under the Balanced” category would have to remain for 105 days.
“If you want to be able to buy a house and become a permanent resident or a citizen, then you need to fulfil the criteria like everyone else, which is a lot more. You need to be a tax resident and spend dozens and dozens.”
Stanford said the requirement for investors to remain in the country was a “turn-off”.
“I mean, these are incredible investors with tens of millions and they flit all around the world. And when they see something like, ‘Oh, I’ve got to spend multiple weeks per year for the first couple of years in New Zealand’, that’s a turn-off.”
Meanwhile, Labour’s immigration spokesman said there was a need for foreign investment, but the Government’s scheme was not a plan for growth.
Phil Twyford told Morning Report the Government had loosened the rules to make it easier for people applying for the foreign investor visa to park their money in passive investments that would not necessarily create any jobs or economic opportunities for New Zealanders.
‘Too many hoops’
Immigration lawyer Nick Mason told Morning Report there had always been a lot of interest in coming to New Zealand, but people were being turned away under the previous active investor category.
“The previous category was just too hard. There were too many hoops to jump through. This will make it much easier.”
“There’s no guarantee that people won’t just be passive and that sort of stuff. But we can’t let the perfect be the enemy of the good. And so ultimately, I think it’s a great thing for the economy.”
While Mason agreed being in the country for only a week a year did not seem like a huge commitment to New Zealand, he said in his experience, people would spend far longer than that.
“I’m not quite sure why it was set at just three weeks because it does seem very minimal. But I guess on the other side, you do have at least $5 million of active investment in New Zealand, whether it’s a managed fund, which is of limited benefit. But if we are making direct investments into New Zealand companies, that’s going to be really worthwhile.”
