Figures show 60% of investments made by would-be residents (including Kim Dotcom) under 'Investor Plus' immigration scheme put into NZ govt bonds

By Alex Tarrant

Government bonds have been the major recipients of investments made by 10 foreigners who had residency applications fast-tracked because of their wealth, figures supplied to interest.co.nz by Immigration New Zealand show.

Sixty percent, or NZ$60 million, of the NZ$100 million invested in New Zealand since 2009 by 10 immigrants who gained residency through the government's 'Investor Plus' scheme went into government bonds, including NZ$10 million from German-born Kim Dotcom, who was arrested north of Auckland last week on allegations of copyright infringement and money laundering.

Twenty percent, or NZ$20 million, of the NZ$100 million invested in local assets was invested in private companies; Seventeen percent, or NZ$17 million, was put into private sector bonds; and three percent, or NZ$3 million was invested in shares of listed companies.

The Investor Plus scheme was introduced in 2009 by then-immigration minister Jonathan Coleman, and economic development minister Gerry Brownlee as part of the government's overhaul of the previous Labour government's business migrant schemes.

An applicant had to put at least NZ$10 million in an acceptable local investment (see below) to apply for residency, with that investment having to last for at least three years. Another requirement was the applicant had to spend 73 days of each of the three years in the country, which has since been reduced to 44 days. There were no age requirements, no language requirements, no business experience requirements and no minimum requirement for settlement funds.

An applicant would have to pass a 'good character' test, and pass certain health requirements. They also had to demonstrate their investment funds were legally earned or acquired.

See an Investor Plus application form here.

The overhaul by Coleman and Brownlee also introduced an 'investor' category, for which the migrant would have to be 65 or younger, have a minimum three years business experience, invest NZ$1.5 million for four years, spend 146 days in the country in each of the years, have NZ$1 million of settlement funds, and be of an English speaking background.

Also introduced was the 'Entrepreneur Plus' category, for which a migrant would have to invest NZ$0.5 million and create three full time jobs in New Zealand.

See Alex Tarrant's July 2009 article: Have your say: Easier for rich migrants to get NZ residency.

What is an acceptable investment?

Immigration New Zealand defines an acceptable investment as:

An acceptable investment means an investment that:

• is capable of a commercial return under normal circumstances, and
• is not for the personal use of the applicant(s) (see What is meant by personal use of investment funds? below), and 
• is invested in New Zealand in New Zealand currency, and
• is invested in lawful enterprises or managed funds that comply with all relevant laws in force in New Zealand (see Managed funds below), and
• has the potential to contribute to New Zealand's economy, and 
• is invested in either one or more of the following: 
• bonds issued by the New Zealand government or local authorities, or 
• bonds issued by New Zealand firms traded on the New Zealand Debt Securities Market (NZDX), or 
• bonds issued by New Zealand firms with at least a BBB- or equivalent rating from internationally recognised credit rating agencies (for example, Standard and Poor's), or 
• equity in New Zealand firms (public or private including managed funds), or
• bonds issued by New Zealand registered banks, or
• equities in New Zealand registered banks, or
• residential property development(s) (see Residential property development below), or
• bonds in finance companies.  

Note:  

For the purposes of these instructions, convertible notes are considered to be an equity investment.

New Zealand registered banks are defined by the New Zealand Reserve Bank Act 1989.

Where an investment fails to meet one of the acceptable investment requirements, we may consider, on a case by case basis, whether the failure was beyond the control of the principal applicant and if satisfied that this was the case, may consider the investment acceptable.

We may consider bonds in finance companies as an acceptable investment where the finance company:

• is a wholly-owned subsidiary of,
• raises capital solely for, and
• has all its debt securities unconditionally guaranteed by
• a New Zealand Stock Exchange listed company or a local authority.

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