As summarised in our previous article, the Government announced a major overhaul of the investor visa programme in July 2022, replacing the previous Investor 1 and Investor 2 visa categories with a new Active Investor Plus visa (‘AIP Visa’).

Although applications for the new AIP Visa category opened on 19 September 2022, much uncertainty remained (and continues to remain) about key aspects of the AIP Visa framework.

New Zealand Trade and Enterprise (‘NZTE’) have since published further information on how they will assess the eligibility of acceptable investments under the AIP Visa.

Acceptable investments guidance limited

Under the AIP Visa, an applicant may invest in New Zealand based direct investments, managed funds, listed equities and philanthropic causes. The recent NZTE update provides guidance on direct investments and managed funds only.

Direct Investments

A direct investment (essentially an investment in a New Zealand resident, privately owned business) must be approved by NZTE.

An application for an approval of a direct investment may be made either before the AIP Visa applicant makes the investment (classified as a ‘current direct investment’), or retrospectively (classified as a ‘historical direct investment’).

The approval process is as follows:

1. Submit an application form to NZTE (separate forms are available for ‘current’ and ‘historical’ direct investments);
2. Await a review from NZTE, who consult with an external advisory panel to help them determine whether the direct investment meets the AIP Visa eligibility criteria (see below for further information regarding the panel);
3. Receive an approval letter from NZTE.

There is no cost to apply for approval as an acceptable direct investment. Any decision made by NZTE is final.

Managed funds

To become an acceptable managed fund, the entity must apply to NZTE.

The approval process for managed funds is essentially the same as for direct investments, save for the following differences:

1. an application fee of NZ$1,500 is payable; and
2. if the managed fund is approved, it will be added to the NZTE Acceptable Managed Funds List. This list will be maintained on NZTE’s website.

NZTE will consider whether the managed fund has met the eligibility criteria. At a basic level it must be a New Zealand resident entity that invests in private New Zealand businesses, with no investment (whether direct or indirect) in listed equities and/or fixed income assets such as bonds.

Importantly, NZTE will consider whether the investment “invests wholly or substantially in entities with a New Zealand connection.” This means that a minimum of 70% of the net committed capital must be made available for the investment in entities with a New Zealand connection.

An approved managed fund must complete an annual re-certification process with NZTE to remain on the NZTE Acceptable Managed Funds List.

Independent Advisory Panel to provide recommendations on investments

The AIP Visa framework allows NZTE to appoint an independent advisory panel to make recommendations to NZTE on whether the investments are acceptable. 

On 25 January 2023, NZTE announced the first independent advisory panel. The panel is comprised of three individuals, Mel Hewitson MNZM, Debbie Birch and Pip Dunphy. The panelists have diverse backgrounds in investments including fund management, capital markets, Māori economic development, banking, finance and investment management. 

The panel will have monthly meetings, the dates of which will be published online. The first meeting of the panel will occur on 20 February 2023. NZTE has indicated that the processing time for applications to determine whether investments are acceptable under the AIP Visa is expected to range between 3 to 6 weeks. 

Next steps

If you would like assistance in relation to the AIP Visa, please get in touch with the Dentons in New Zealand contacts listed here or your usual contact at the firm.

The authors would like to thank solicitors, Charlotte Sutton and Sophie Barton, for their assistance with this update.