New Zealand has long been a destination for investors seeking to contribute to its vibrant economy. Recently, the performance of the Active Investor Plus (AIP) Visa has come under scrutiny, prompting discussions about its effectiveness and potential alternatives. This blog delves into the key statistics, critical analysis, and future prospects of the AIP Visa, while also exploring the Entrepreneur Visa as a viable alternative.

Active Investor Plus (AIP) Visa: Performance Review

Key Statistics (as of 10 October 2024):

• Applications Lodged: 96
• Applications Approved: 30
• Approved in Principle: 21
• Withdrawn: 12
• Committed Investment Funds: $336 million
• Invested in New Zealand: $56 million
• Nominated (Approved in Principle): $237 million

Investment Breakdown:

• Direct Investments: $16 million
• Managed Funds: $12 million
• Listed Equities: $28 million

Critical Analysis: The AIP Visa program has seen a relatively low number of applications and approvals, with only 96 applications lodged over two years. Of the $336 million committed, only $56 million has been invested, highlighting a significant gap between commitments and actual investments. The preference for listed equities suggests investors favor more liquid and potentially less risky assets.

Conclusion: The AIP Visa program shows weak interest and commitment, struggling with actual investment follow-through. This has led to a review and proposed changes aimed at increasing foreign investment to support New Zealand’s economic growth.

New Investor Visa in the Pipeline

The New Zealand government is considering changes to the investor visa settings, with industry-wide consultations completed in October 2024. The proposed changes aim to remove unjustified barriers to investment and could be implemented as early as February 2025. The primary objective is to ensure that policy settings are attractive and straightforward for investors.

Entrepreneur Visa: A Better Alternative?

The Entrepreneur Visa is emerging as a strong alternative to the AIP Visa. Between July 2023 and September 2024, 26 Entrepreneur Work Visa (EWV) applications were decided, with 19 approved. This visa requires applicants to operate a business in New Zealand, contributing directly to the economy.

Advantages:

• Lower Capital Commitment: NZD 100,000 or above.
• Pathway to Residency: Applicants can apply for a resident visa after operating the business for six months if they invest NZD 500,000 and create at least three full-time jobs.
• Flexibility: No age requirement and fewer restrictions on the type of business.

Challenges:

• Rigid Business Plans: Approved business plans cannot be significantly modified.
• Inconsistent Decision-Making: Lack of clear guidelines for what constitutes “high growth” or “export potential.”

Conclusion

Both the AIP and Entrepreneur Visas offer unique opportunities and challenges for investors. While the AIP Visa has struggled with low interest and investment follow-through, the Entrepreneur Visa presents a more flexible and potentially rewarding option for those willing to commit to operating a business in New Zealand. As the government reviews and potentially revises its investor visa policies, it is crucial for prospective investors to stay informed and seek expert legal advice to navigate these changes effectively.