The Government is relaxing immigration settings to encourage wealthy foreigners to invest in New Zealand businesses.
Video / NZ Herald
The Government is relaxing immigration settings to encourage migrants to invest in New Zealand businesses, acknowledging wealthy foreigners unable to easily purchase New Zealand property “don’t love” renting.
Prime Minister Christopher Luxon announced the changes today at an Auckland Business Chamber event at the Cordis Hotel, saying he was “dusting off the welcome mat” and declaring New Zealand open for business.
Luxon detailed the changes to the Active Investor Plus (AIP) visa category, creating two “simplified” investment categories that will replace its existing “complex weighting system”.
From April 1, the visa would be split into two categories: Growth and Balanced.
The growth category applied to those making “higher-risk investments”, including those directly in local businesses. It would require a minimum investment of $5 million for a period of at least three years. Visa holders in this category would have to reside in New Zealand for a minimum of 21 days.
The balanced category focused on mixed investment, allowed for a minimum spend of $10m over five years and required 105 days spent in New Zealand with the potential to get reductions if investments exceeded $10m.
Several other changes have been made, including stripping away the visa’s English language requirement, which demanded applicants have an English language background. Luxon today claimed the requirement had scared off many potential investors in recent years.
Labour warns the changes are not “the Kiwi way” by allowing a fast-track to residence for wealthy migrants while expressing surprise New Zealand First party leader Winston Peters isn’t opposing the move following his demolition of National’s foreign buyers tax plan it took to the election.
Peters, however, is echoing Luxon in his criticism of the former Labour Government’s ability to attract overseas investment through the AIP visa category and is supporting measures to address declining levels of investment.
Prime Minister Christopher Luxon (left) and Auckland Regional Chamber of Commerce chief executive Simon Bridges (right) at the Cordis Hotel. Photo / Alex Burton
Luxon, appearing alongside Economic Growth Minister Nicola Willis, Immigration Minister Erica Stanford and Trade and Investment Minister Todd McClay, criticised the previous Labour Government during the announcement, saying migrants entering New Zealand under the visa had invested $70m since 2022, which was down on the $2.2 billion invested in the two years prior to the Covid-19 pandemic.
Stanford, speaking to reporters after the announcement, said she had been consulting on the idea for months and expected there were 50 high-wealth individuals keen to sign up “on day one”.
“I’m expecting a huge amount of interest.”
Both she and Luxon pointed to the absence of such a visa in the United Kingdom and Australia, claiming it would give New Zealand an advantage.
“I want regular Kiwis to understand investment like this is fantastic,” Luxon said.
Central to the discussion about overseas investment was the prospect of investors being able to purchase property.
In the 2023 election, National campaigned on a 15% foreign buyer tax on houses worth over $2m, which the party predicted to raise $740m on average per year. The policy was scotched by NZ First during coalition negotiations.
Economic Growth Minister Nicola Willis (left) and Immigration Minister Erica Stanford (right) explain the Government's latest visa changes. Photo / Alex Burton
Stanford conceded the inability for overseas investors to easily buy a house in New Zealand wasn’t ideal.
“They don’t love [renting], but they’re still here.”
Willis argued foreign investors could purchase property under the current rules by becoming permanent tax residents after a “significant period of time”.
Labour immigration spokesman Phil Twyford described Stanford’s changes as “peak shortsightedness” and claimed it would water down domestic economic benefits.
“Allowing people to buy residence by parking their money in a passive investment like property that won’t generate jobs or sustainable economic development for New Zealand doesn’t sit well,” he said in a statement.
“This will stick in the craw for the hard-working migrants who have to crawl over cut glass to get residence. Giving the fast track to residence for the rich with no requirement for economic development for New Zealand, and removing the English language test for the rich but not for everyday migrants, is not the Kiwi way.”
Twyford said he was “surprised Winston Peters doesn’t have more to say about this” as it “flies in the face of what he has fought for decades”.
Speaking to the Herald, Peters fired back at Twyford, saying he too was surprised the former Housing and Transport Minister was still an MP given his failure to deliver proposed Auckland light rail and the 100,000 KiwiBuild homes.
Peters said he supported addressing a “failed system” that had led to such a decline in investment in just a few years.
He denied the prospect of foreign investors buying New Zealand homes was associated with the visa changes and backed his party’s opposition to National’s election policy, saying it was “bound to fail”.
NZ First party leader Winston Peters opposed National's election policy that would have taxed foreign buyers of high-end New Zealand homes. Photo / Mark Mitchell
Sunday’s announcement was welcomed by BusinessNZ chief executive Katherine Rich, who believed the changes would make New Zealand more attractive to investors.
“A broader range of investment opportunities and internationally comparable settings will open the doors for investors that want to call New Zealand home.
“There is an opportunity for New Zealand businesses to leverage these networks for investment and international trade.”
Former Labour Minister Stuart Nash, now founder of consultancy outfit Nash Kelly Global, launched the Active Investor Plus visa in 2022 but today said the coalition Government’s changes amended settings that weren’t “quite right”.
“There are competitor countries that very clearly understand the economic and social value of having these individuals actively participating in their economy, and so are creating investor visas that encourage the super-wealthy to relocate.
“New Zealand is uniquely placed to take advantage of this current level of geopolitical uncertainty, but the first version of the AIP didn’t have the settings quite right to attract the very best. These changes go a long way to remedying this.”
Adam Pearse is a political reporter in the NZ Herald Press Gallery team, based at Parliament. He has worked for NZME since 2018, covering sport and health for the Northern Advocate in Whangārei before moving to the NZ Herald in Auckland, covering Covid-19 and crime.
