%20(1).webp){kind=spacer}
On 9 February 2025, the Prime Minister announced changes to the Active Investor Plus Visa (AIPV) category, a visa type created to attract wealthy migrants to consider moving to New Zealand. Such visas have existed since at least 2010, but the government has seen the need to change it.
The reason given is that the AIPV has only attracted $70m in investment in the past two years as opposed the Migrant Investor class visas that provided $2.2b in the two years before the pandemic. However, contacts at NZ Trade and Enterprise (NZTE) have indicated that the old Migrant Investor Class visas also took a few years to get going, as people became familiar with it, so it is may not be the fairest of comparisons.
To better understand any impact these changes may have on immigration to New Zealand, we'll need to quickly cover how the changes impact both the AIPV, and the visa that came before. Migrant Investor Class 1 was a visa that required a minimum investment of $10 million, with no limits as to age or English language abilities. Migrant Investor Class 2 worked on a point system, with points granted for various factors. At the time it was ended, it effectively allowed an investment of at least $3 million, with three years of business experience, a maximum age of 65, and minimal English ability at IELTS 3.0 (as opposed to the IELTS 6.5 that is required to gain residence through employment).
For the applicant to later gain permanent residence at the end of the residence period, Migrant Investor Class 1 required a minimum of 88 days in New Zealand over the three year investment period, depending on the investment. Migrant Investor Class 2 required at least 438 days in New Zealand over a four year investment period, again depending on the investment.
The current AIPV was introduced in 2022 to replace the Investor 1 & 2 class visas. The idea was that the government wanted to have investment that was more "active", which meant that it brought more "skills" to New Zealand rather than just money. It worked through a more complicated scheme where a $15m investment was required, but some investments would get a multiplier effect. For example, investments in startups approved by NZTE would get a 3x multiplier effect, meaning only a $5m investment would be required.
At the same time the government introduced a higher English language requirement of IELTS 5.0, so that applicants could more readily integrate in to New Zealand society.
The overall purpose had merit, on the basis that New Zealand wanted to attract more than just money, but wanted to have the skills that were attached to it. We wanted people to be more actively involved in the operation of businesses in New Zealand, rather than just funding them.
It's questionable to say if it worked or not, and it will depend on who you ask. More correctly, it comes down to whether it hasn't worked, or whether it hasn't been given a proper opportunity to work. The current AIPV was introduced in 2022 - when much of the world was still recovering from the pandemic - with our own border only fully reopening in July 2022. So we are comparing two years from an established visa that had been in operation for more than a decade against a visa that was introduced at the end of the pandemic.
However, that doesn't mean that, with time, it would have gained the same amount of investment that the MIC visas did. That was never going to happen. The difference between them was too great, the demands of AIPV too high to ever see it being as successful. The higher investment amounts, in most situations, were definitely going to be detrimental, as was the English language requirements. The most influential aspects though was the investment categorisation.
The old MICs generally classed all investments as the same. An investment in a startup was the same as getting bonds, even though they had different values to New Zealand. People would enter New Zealand, put their funds in to bonds or invest in relatively well established listed companies through the purchase of shares, and then sit there.
AIPV, and it's multipliers, would allow smaller high risk investments to be used to meet the requirements, while putting less at risk funds at risk. Multipliers range from 3x for direct investments in NZTE approved companies, 2x for NZTE approved managed funds with a focus on riskier New Zealand investments, and 1x for listed equities and philanthropy.
A $5m investment in an NZTE startup would then provide, with the 3x multiplier, enough to meet the $15m investment requirement for AIPV. Those who are more risk adverse can look at $7.5m in those approved managed funds, $15m in listed equities, or a combination of all of the options as long as it gets to $15m after multipliers are counted.
The changes tidy this all up and make it much simpler, in most ways.
It removes the multipliers, leaving people with two options:
They also remove the English language requirements, as well as reducing the time required in New Zealand to as little as 21 days for the $5m investors, and as low as 64 days for $13m investors. That isn't a mistype, but we'll touch on that quickly later.
There are two purposes for the investment period. The first is when the applicant may free those funds from the investment and used them for something else not related to immigration. For those in the riskier investments, those in the $5m category, that will likely be attractive, as these are typically high risk investments, so getting them out will likely be beneficial.
However, it also won't be realistic. Despite what the government requirement is, such investments are usually tied up for longer periods of time. These are not shares that are easily bought and sold, but investments that tie someone to that investment, often for several years longer than the time period required by INZ. While the requirement may be moved to three years, we'd be surprised to see many of the applicable NZTE approved investments that would allow a release of the investment within three years. This makes a reduction in the investment period slightly artificial.
The time in New Zealand requirement for $5m investors will be reduced to just 21 days over the three year period, which is by far the lowest we have ever seen. We'd be surprised if we didn't have investment clients in New Zealand for at least a couple of weeks per year, so this is certainly at the lower end.
For those looking at the $10m safer investment, the base minimum is 105 days within the five year investment period. However, additional investments can reduce this: $11m to 91 days, $12m to 77 days, and $13m to 63 days. We are not sure how many applicants would see an additional investment of $3m being good value to miss out on being in New Zealand for six weeks over five years, but it is an option that the government has introduced for a reason.
When we first saw the AIPV, we saw it as an unrealistic solution to a problem that didn't really exist. While we definitely would love to see more active investments, with skilled people taking more of a role, making it a requirement did not mean we would going to find applicants. While we do believe it's too early to see AIPV as a failure, it certainly was over optimistic as to the number of applicants New Zealand was likely to receive.
It also ignored the other value that investors have. While passive investors may not have as much of an impact as active ones, their presence in New Zealand has other positive outcomes. Their increased expenditure means the creation of jobs, as does the tax they introduce. With such wealthy people, we often see others visiting, also bringing tourism revenue with them. An investment visa applicant provides more to the country than merely the investment amount. While we may have seen a $2b reduction in the investments between the two categories, the cost to the country would have been even larger, as investment applicants bring in other funds to the country.
We have yet to see the new instructions, commenting instead on the small amount of text in a press release and provided by the Minsters involved in the announcement. We have several questions which we'll need answered, and look forward to the fine written rules. If it is exactly as provided, and the rules are written well, this would be a win for New Zealand.
McVeagh Fleming's immigration team assists individuals, families, and businesses nationally and internationally. We speak a range of languages and are here to assist you at any stage of your immigration journey. If we can assist you, please contact our Immigration team at visa@mcveaghfleming.co.nz.
See our Expertise page:
News article by: Arran Hunt
See a video explanation of announced changes
© McVeagh Fleming 2024
This article is published for general information purposes only. Legal content in this article is necessarily of a general nature and should not be relied upon as legal advice. If you require specific legal advice in respect of any legal issue, you should always engage a lawyer to provide that advice.
