Not many Court decisions have been made about Entrepreneur visas. The recent High Court decision of Tong v Chief Executive, Department of Labour.is therefore of some interest.
Under his Long Term Bsuiness Visa (LTBV) Mr Tong set up a company with him and his wife as shareholders. Prior to his application for Residence based on the LTBV he had only been in New Zealand for about 100 days out of 30 months – just over 10% of the time. Both Immigration New Zealand and the Immigration & Protection Tribunal determined that he had not been in New Zealand for long enough to satisfy the requirement to have been “self-employed in New Zealand” for 2 years before the Residence application was made. There was apparently no issue about how successful the business had been. This and other cases like it is an object lesson that “the centre of the applicant’s domestic and business life must be in New Zealand” for the 2 years (Residence Appeal 15834 (10 December 2008).
Mr Tong argued to the High Court that this test should be less stringent for people who run their business through a company. The argument goes that although a sole trader has to be “on the ground” most of the time in order to keep their business running, a shareholder in a company, who has other partners as shareholders, can rely on the business being run without him having to be there all the time. He claimed that there should be a separate standard for those running companies (or in partnerships) compared to sole traders.
The Court appeared to have some sympathy for the idea, but pointed out that Entrepreneur Policy as it stands makes no such distinctions. “Self employment” is “self-employment” no matter what business model is used. Furthermore, Justice Woodhouse observed that there was room for flexibility in interpreting Policy – more so than if it was an Act of Parliament – in that “it is a working document providing guidance to immigration officials and to persons interested in immigrating to New Zealand . . .” (Patel v DoL) That is, INZ could (and should) take into account the specific business arrangements and assess each case on its own facts.
This last point should be remembered by anyone putting their own case for an Entrepreneur visa, or representing a client, rather than allowing INZ to apply the self-employment rule without flexibility. At least as importantly, anyone setting up a business in order to get a business visa should think about their lifestyle choices very carefully before they get too far into it. If you do not intend to remain in New Zealand for (say) at least 40 – 50% of the time then your chances of getting Residence later on may be pretty thin.