Further to a previous post giving early warning of the sudden shut-down of the Long Term Business Visa policy in December 2013, the new replacement Instructions have now been unveiled. They open on 24 March 2014.
It’s a points-based system in which you have to score a minimum of 120 to get through. Points are awarded for:
- experience either running your own business or being a “senior manager” in someone else’s
- how many jobs for New Zealanders your business venture will create
- Projected turnover (for export businesses only)
- a business that provides “new or unique products”
- amount of capital investment – note that this means investment in hard assets and not simply working capital sitting in a bank account
- setting up the business outside Auckland (bonus points)
Although I previously thought that the “new or unique products” criterion was a non-negotiable component of any Business Visa application, it now appears that it is only another way to earn points. Nevertheless, it is influential because it scores 30 points. So is the points table for setting up an export business – you can earn 80 points for showing a turnover of more than NZ$1 million.
The graduated points system is prescriptive – you get 20 points if you employ 2 people, and 30 points if you employ 3 people. I foresee that applicants must be very careful about the claims that they make in their Business Plan about what the business will achieve, and how it will do it. If it later turns out that the business turnover was not as high as promised, or it could not employ as many people as claimed, then future visas will probably be declined and you will have to start all over again.
There are some controversial elements of the policy which have been carried over. For instance, any applicant must invest a minimum of $100,000 in “capital” which cannot include “working capital”. According to this policy, working capital is “tied to assets used in the on-going maintenance or day-to-day running of a business.” This means that a funds reserve in a bank account to secure the financial viability of a business cannot be counted as “capital”, even though any accountant and competent business owner would put such funds on the Asset side of the ledger. Immigration believes that capital is bricks and mortar. So, bad luck for all those IT start-ups whose assets would amount to some PCs, desks and a Ping-Pong table.
Time will tell whether many migrant entrepreneurs will jump at the new visa Instructions. Immigration wants to attract the brightest, richest and best. My feeling is that anyone who has that level of enterprising spirit would be better of taking the easy (passive) route of Investor Residence.