Migrants with money are the focus of new visa settings that the government hopes will boost the economy. Alice Neville explains.

What’s all this then? 

On Sunday, as part of the government’s big plan to kickstart economic growth, changes were announced to the Active Investor Plus visa category, with the goal of making it easier for cashed-up foreigners to bring their lovely piles of money to Aotearoa.

Sounds good, I guess? What’s the Active Investor Plus visa?

We have a bunch of different visa categories that allow people from other countries to live, work, start a business or invest here, and the Active Investor Plus (AIP) visa is the one that lays out the welcome mat to potential migrants with plenty of pūtea, hence its nickname: the “golden visa”.

How much pūtea are we talking?

Since 2022, when the previous government brought in some strict new criteria (which sent applications plummeting), to be eligible for this visa you have to invest “NZ$15 million or the weighted equivalent in acceptable investments in New Zealand”. The “weighted equivalent” bit refers to a system that gives certain more “active” investments greater weight – direct investments (ie a capital injection in a plucky little Kiwi startup, in one scenario) get triple weight, meaning $1 = $3 (meaning you could put just $5 million in and it would count as $15m). Investing in managed funds gets double weight ($1 = $2), while a dollar equals a dollar when it comes to investments in philanthropy and listed equities, ie shares in a company listed on a stock exchange (which can make up only half the total investment). Those mentioned above are the only investments deemed acceptable.

I’m confused. 

Don’t worry, that’s all changing anyway. From April 1, the AIP will be divided into two categories: “Growth” and “Balanced”. Growth is the higher-risk option, requiring a minimum investment of $5m over three years in direct investments or managed funds. Balance is lower-risk and for bonds, listed equities and philanthropy, with a $10m minimum over a five-year period (five-year direct investments or investments in managed funds also come under this category, with a $10m minimum). 

I’m still confused.

Don’t worry, basically all you need to know is that the requirements for this visa are being loosened. Property investment, which doesn’t count towards an AIP visa currently (though a managed fund can hold 20% or less in the property sector), is now allowed, as are bonds (those are when you essentially lend money to the government, a council or a company and are paid regular interest on your investment).

Why do we want foreign investors anyway?

“Foreign investment has the potential to provide jobs for Kiwis, lift incomes by delivering new businesses and investing in existing ones,” said economic growth minister Nicola Willis in the press release announcing the changes. The revamped visa will incentivise investors “to choose New Zealand as a destination not just for their capital, skills and international connections, but to build a life for themselves and their family here”, added immigration minister Erica Stanford. 

Won’t they just buy all the property, send house prices sky high and further munt our already munted property market?

Well there’s the foreign buyer ban, remember.

Oh yeah. Remind me, what’s the deal with that?

In a controversial move intended to alleviate our overheated housing market, the Labour government in 2018 banned most non-ordinarily-resident visa holders from buying existing houses (more on that below). During the 2023 election campaign, National pledged to repeal the ban on foreign buyers for homes of $2m or more and chuck a 15% tax on such sales, with the resulting revenue to be used in part to pay for tax cuts. A spanner in the works by the name of Winston Peters (OK, the coalition agreement with NZ First) scuppered that plan, so the ban remains.

Won’t not being able to buy a house dissuade rich foreigners from bringing their money here to “build a life for themselves and their family”?

That’s widely considered to be a sticking point, yep, as joining the renting contingent doesn’t generally appeal to the very wealthy. A resident visa holder can buy a house in New Zealand only if “ordinarily resident” in New Zealand, meaning they have to lived here for at least 12 months and have been physically present in the country for at least half of that, which might not fit with the lifestyle of your average cashed-up jet-setting foreigner. There could be change afoot, however… 

Please, tell me more.

With pleasure. Peters has indicated he could be open to a softening of the foreign buyer ban for the right (read: rich enough and committed enough) potential migrant. Stanford told RNZ that discussions on that topic were continuing, which the prime minister reiterated at yesterday’s post-cabinet press conference. “When we’re ready to tell you, we’ll tell you,” said Christopher Luxon.

Righto. Are any other changes being made to the AIP visa?

Yep, a “reasonable level” of English is no longer needed, and the time-spent-in-New-Zealand has been reduced: just 21 days in three years is required for the Growth category (so an average of a week per year), and 105 days over five years for Balanced (which can be reduced to as little as 13 days a year if more money is invested).

Interesting. Have any other issues been raised? 

There are some doubts about whether the changes will really “turbocharge our economic growth, bringing brighter days ahead for all Kiwis”, as Stanford put it. Unsurprisingly, Labour was unimpressed, with immigration spokesperson Phil Twyford saying, “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.” 

Business journalist Bernard Hickey of The Kākā (paywalled) was also sceptical, saying most of the money brought in by migrants on this visa would “simply go to the government as purchases of government and local government bonds, rather than investment in actual businesses”.

Writing on the golden visa phenomenon for BusinessDesk, Dileepa Fonseka said that many countries including Spain, the Netherlands and Portugal were in the process of winding back their own schemes. He pointed to research by London School of Economics assistant professor of sociology Kristin Surak that found the effects of golden visas on overall growth in most countries was modest, and there could be negative after-effects, such as in Greece, where golden visas contributed to destabilising the property market.

What else is the government up to in the foreign investment realm?

It’s a key focus, that’s for sure. An investment summit is being held next month to “showcase upcoming infrastructure opportunities for partnership and investment” to about 100 “leaders from global investment and construction companies”, it was announced yesterday. Last month, a new agency called “Invest New Zealand” was unveiled, a “one-stop shop for foreign direct investment” with a focus on increasing capital for “banking and fintech, critical infrastructure like transport and energy, manufacturing, and innovation”.

February 12: An earlier version of this post has been updated to clarify the rules around the foreign buyer ban