Laurent Lore
Business & Investor Edition
March 2021
As reported in our last newsletter, there is still strong interest in New Zealand from high-net worth people. This is first of all for Residence through investment - more on that below.

Another group is those who want to spend their tourism dollars in a country which is largely free of COVID-19 and the corresponding restrictions on daily life. Unfortunately, entry for tourism is off the cards. We don't see this scenario changing any time soon.

Those who are already here and don't want to leave have benefited from short-term extensions of their Visitor Visas over the last few months. However, Immigration New Zealand is becoming resistant to extending those entitlements, and people are being pressured to make their return travel plans. They can get a further 2 months into April, but there is no indication of anything beyond that.

Many people find real difficulty in getting flights home. Older visitors in particular are afraid of returning to the high risk of infection in countries like the US. There have been calls for relaxation of the normal temporary stay rules to allow those who have plenty of money to support themselves, to be allowed to remain for much longer. Considering that the local tourism industry has lost billions of dollars in overseas spending in the last year, there certainly seems much to gain and little to lose by allowing people to stay on, perhaps for at least another year.

You can subscribe to our law firm blog to see up-to-date commentary on trends in the immigration field,

Simon Laurent
Source of Earnings - Down the Rabbit-Hole
In the Investor Residence vlog, which we published during 2020, I mentioned the challenge for potential investors of proving where they got the money to invest, which is called "nominated funds". There are 2 main points here:

  1. Ownership: Many people who have built up a significant asset portfolio act upon specialist financial advice to distance themselves from those assets. This may be through trust and company arrangements, where they retain a beneficial interest, but legal title rests elsewhere. Immigration rules require all nominated funds to be fully owned by the applicant and/or their partner. This creates real issues for clients, who may have to unravel complex structures in order to regain personal title. Sometimes it may simply not be possible to do so. In that case, we ask people to find other assets to use instead.
  2. Legitimately Earned: The modern fixation on money-laundering looms large in assessments of how people created the wealth which they rely upon. As a result, applicants have to provide proof of how the funds were accumulated. This exercise can go back over decades. Tax returns from salary or business operation, property sale agreements, trails of inheritance, all come under scrutiny. We usually find that clients simply do not appreciate how much work they and their professional advisers will be asked to do in order to pass this test.

Ultimately, the effort is worth making. A key role that we play is to manage our clients' expectations that the Investor route, which appears quite simple on the surface, is challenging and takes time and effort.
The Slow Road to Investor Residence
The message which we have given wealthy potential clients in the last year is that Investor Residence is usually their best option to live in New Zealand permanently. However, it is not a "quick fix". Some have gone away disappointed that they can't get on a plane next month to settle down here. The mere fact that they have a lot of money, and New Zealand ought to want it, is not enough.

The problem is that very few Government staff are processing these applications, and they could take years to be approved. As reported in a recent news article in which I was interviewed, there could be at least NZ$2 billion locked up in potentially successful applications. Over 400 Investor 1 cases are on hand, but only 15 Investor 1 applications were decided in the current financial year. From July 2020 to January 2021, 9 out of the 15 applications were approved. Based on the recent statistics, Immigration New Zealand is deciding on average between 1 and 3 investor applications a month.

So it is necessary to play the long game. Start on the assumption that you may not get here for 1, 2 or 3 years. Then plan what else you want to do with your life in the meantime. In fact, we find that many people we talk to have already taken this on board before they talk to us.

The policy itself is geared toward the view that people of means, planning to reside in New Zealand, will take a while to shift the focus of their lives away from their home country. Others choose to split their time between two or three countries. This is why, for the Investor 1 (NZ$10 million) option, visa holders are only expected to spend 6 weeks per year in NZ in each of the final 2 years of their initial 3-year investment period.

If you want to talk to us about starting this process, come armed with the awareness that nothing will happen overnight. This takes the pressure out of the situation and allows you to consider, thoughtfully, if moving to New Zealand is right for you.