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Number of Chinese investors applying for NZ residency jumps 48% over past year; competition sees more cashed-up investors make the cut

Business
Number of Chinese investors applying for NZ residency jumps 48% over past year; competition sees more cashed-up investors make the cut

Overseas investors need increasingly deep pockets to become New Zealand residents.

A paper released by PwC, ‘Investor Migrants to New Zealand: Your Questions Answered, reveals the number of people applying for residency through the ‘investor’ visa category has shot up in the last few years.

The number of investor visa applications Immigration New Zealand processed over 2014/15 increased a whopping 12-fold from 2009/10; from 18 to 218.

It processed 57 applications in 2010/11, 82 in 2011/12, 171 in 2012/13, and 194 in 2013/14.

The number of Chinese applicants grew from two to 142 between 2009/10 and 2014/15, while the number of applicants from the UK increased from three to 10, and the number of applicants from the United States inched up from six to nine.  

Much of the growth in Chinese applicants has come in the last year, with the number of Chinese applicants increasing by 48% from 2013/14. 

Given the number of applicants Immigration New Zealand is allowed to accept through this investor category is capped to some extent, PwC says it’s having to turn down an increasing number of applicants.

This in turn has raised the bar, in terms of the amount of money foreigners need to propose to invest in New Zealand, if they want to stand a chance of getting residency.

How it all works  

Digging into the detail a bit more, PwC explains there are four categories foreigners can apply for to get residency through – skills, business, humanitarian and family.

The business category is divided into two sections – migrant investment and entrepreneur residence.

PwC has focused its report on the migrant investment pathway.

To apply for a visa through this category, you have to propose to make investments capable of a “commercial return under normal circumstances”. These predominantly include New Zealand bonds, shares, equity investments, and development initiatives.  

Investment cannot be for your personal use, so buying a residential property for your family to live in isn’t an investment, but investing in a residential property where you’re adding substantive value to it, might be.  

Breaking this down even further, there are two categories investors can apply for visas under.

Applicants that pledge to invest more than $10 million in New Zealand can obtain a visa more easily. They aren’t required to meet a very stringent criteria when it comes to their age, English language ability, minimum number of days spent in New Zealand and the number of years the investment must be kept in New Zealand.

Applicants that pledge to invest more than $1.5 million in New Zealand have to meet a higher standard in respect to the criteria listed above. However the Government caps the number of visas it approves under this category at 300. This includes the spouses and children of the investors (the figures listed above don’t include these family members).

More valuable investments needed

PwC says, “With the huge (and increasing) interest in this category investing the minimum $1.5 million is no longer enough. Applicants who are unable to claim the maximum possible points for fluency in English, business experience, or age will need to have even deeper pockets.”

In fact, PwC points out applications have ramped up so much that applicants who would’ve been able to secure a visa in March, may not stand a chance now.

It notes the Chinese Government in June announced it would further loosen capital controls for outbound investments. It says this will spur even more Chinese investors to express their interest in New Zealand.

It says the score of the lowest ranking successful applicant at a July 8 round of selections, indicated that even if an applicant ticked all the boxes, they’d still need investment funds of at least $2.5 million to make the cut.

PwC partner, Michael Bignell, says from this point applicants need to provide thorough evidence of where there funds are coming from, before they are granted a visa.

He says this is a very high hurdle for applicants to jump over and notes it’s easier to trace financial records for applicants from the likes of Switzerland compared to parts of Asia.  

PwC says 62% of the investor applications (excluding family members) considered in the $1.5 million to $10 million category were approved between 2009/10 and 2014/15.

“On the face of it, this reflects more than $579 million of new capital at various stages of being invested in New Zealand”, it says.

As for the $10 million investment category, 74% of applications were approved over this time, reflecting more than $800 million of new capital being invested in New Zealand.

“Investor migrants can’t buy their way in through residential property”

Bignell says the data shows, “Investor migrants cannot buy their way in to New Zealand through residential property; they have to invest in other productive assets. The house they may live in is over and above their base investment.

“So I think really the [Chinese pushing up Auckland house prices] debate is about people who are not looking to come to New Zealand, but rather are investing in New Zealand in a passive context, just as a New Zealander might buy some houses in America for example.”

PwC notes that while the increasing number of investors wanting to migrate here sees New Zealand benefit from a higher calibre of successful applicants, it recognises the frustrations applicants, who may have spent $10,000 on immigration adviser fees, have when they’re denied.

Bignell notes the 300 person cap on applicants the Government approves for people planning to invest between $1.5 million and $10 million hasn’t been revised since 2009.

He says those who don’t make it through the investor visa scramble may be eligible for an entrepreneur visa. Yet he notes applicants also need to bring a strong business case to the table to make it through this category. 

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25 Comments

These conduits must be thoroughly vetted at their cost and to the extent approvals are independently audited. Then followed up annually for 5 years at random times.

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Follow up audit? essential

There are proposals and promises, and, then there are business plans

An interesting case study would be to review the case of Dong Hua Liu who arrived in New Zealand in 2001 promising to build apartment blocks in Newmarket on land purchased for that purpose. Now 14 years later, after numerous run in's with Auckland City Council, and the law, and causing some angst for a few politicians, nothing has been achieved other than he got citizenship for himself and family

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Hear, hear.

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Translated - LVR limit policy implementation for nearly two years, the New Zealand property market virtual fire rise, not fall.

http://translate.googleusercontent.com/translate_c?depth=1&hl=en&prev=s…

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is it not already? and are not those with vested interests using the same tactics, if you say anything you must be a racist

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So Kiwis want all the benefits of global trade, but none of the costs? We all want our cheap flatscreen televisions, DVD players, sportsgear, clothing, and toys, but it appears none of us wished to consider the wider implications of those that showered upon us this material largess. Did you think they bestowed it upon out of generosity? We have run up global trade deficits for the past three decades and now that the bill comes due, you guys don't want to pay? Suck it up. Its about time the class that foisted the Rogernomic reforms and reaped the rewards suffer alongside the working class who long ago resigned themselves to their fate.

Cry me a river.

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Yeah man. It's really me and my friend's fault for all this. Why when I was 7 years old I was completely aware of everything that Roger Douglas was doing and I backed his economic agenda to the fullest. Nevermind the fact that I could not vote for another four general elections - this was all our fault and we should be made to pay.

The ones missing out are people in their 20's and 30's - young families.

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Although Rogernomics is talked about on the left the Lange governmentalso started the immigration craze with the Burke review of immigration 1986

It is likely that the reduction in export competitiveness has, in turn, slowed productivity growth. There is evidence that a lower exchange rate creates opportunities for high-productivity firms to grow, achieve scale through exporting, and contribute a range of spill-over benefits to other firms. In contrast, what happened is that non-tradable industries such as construction and property and business services expanded rapidly and attracted labour and other resources at the cost of their availability to export industries such as agriculture and food processing..

http://www.treasury.govt.nz/publications/reviews-consultation/savingswo…

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Interesting 25 minute doco on the Chinese property invasion - not racist just economics 101

http://www.aljazeera.com/programmes/101east/2015/01/china-home-invasion…

Cashed up and determined to buy, Jennifer Tao is a real estate agent's dream.

The Shanghai native owns five houses in California and has a property portfolio worth $8m. Tao is one of thousands of wealthy Chinese buying homes abroad - from Californian mansions and Manhattan apartments to Sydney family homes.

China's economic rise has produced a wealthy elite that is increasingly looking to invest, and in many cases, live abroad. Surveys show over half of the country's 70 million wealthiest people want to emigrate.

Some of the world's leading cities are on their wishlists. The most popular overseas destinations for Chinese buyers are the United States, Australia, Canada and the United Kingdom, according to online portal, Juwai.com

Real estate agents say some Chinese buyers do not even bother inspecting properties before signing on the dotted line.

Property developers credit Chinese investment with creating a construction boom in countries like Australia.

But not everyone is putting out the welcome mat. The surge in Chinese buyers has triggered anger in some Australian and American communities, with accusations that China's cashed-up elite is pricing out local buyers.

101 East travels to the US and Australia to examine the rise and fear of China's overseas homebuyers.

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Why would the National Party want to close the door on these kinds of donors?
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11486547
Sell the citizenship, sell the houses, receive the donations, etc

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Democracy for sale. Anything for 30 pieces of silver

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Expected anything else from a former FX wheeler dealer? Corruption is the key. Anyone who disagrees is a racist, ask Hickey. And in any way, the Germans are to blame.

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Money trying to get out of China to escape volatile markets. We shouldn't kid ourselves that the Chinese all want to move to "a much better country like NZ". Are they just looking for a safe haven for their loot. As a place to make money NZ would rate poorly to China. But China is still not a democracy, would you invest money in China, if you were allowed to ?

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We're only a democracy insofar as we do exactly what the powers that be want us to do. If we so happen to elect the wrong councillors whose decisions are contrary to the official diktats of the National Party and its minions in Treasury, they get fired and replaced with unelected commissioners. Comrades Unite! for the greatness of the People's Republic of New Zealand.

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Same for Health Boards, University councils (soon), Polytechnic councils etc etc - all dictated to by the Govt planted reps who can now overrule and bring all institutions, schools etc under direct rule of the central Government. - a bit like China really.

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It's past "bit like" in respect of ECAN.

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Yeah, I think our bureaucrats are being corrupted by $ signs in their eyes. I'm not sure this is good for NZ ,as some parts of our real economy struggle, they are just looking for more ways to extort money from New Zealanders in the hope that they will sell up their businesses to Chinese billionaires, pretty disgusting really.

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The political system in New Zealand has been riddled with corruption since the very beginning.
http://paperspast.natlib.govt.nz/cgi-bin/paperspast?a=d&d=DTN18960520.2…

I have read a very interesting column by the liberal journalist Chris Trotter, on the subject of the Labour Party's public disclosure of Barfoot & Thomson's real estate data and the harsh invective that's been directed at them from all sides of the political spectrum. It appears that in all societies on the periphery of the global world system there has always been a layer of society willing to perform the role of intermediary between foreign interests and the local populace. The Marxists called such people, “comprador bourgeoisie"

“A section of an indigenous middle class allied with foreign investors, multi-national corporations, bankers and military interests.”
http://bowalleyroad.blogspot.co.nz/2015/07/friends-and-allies-what-is-c…

The term certainly suits many amongst the upper echelon of New Zealand who have flagrantly cast their lot with foreign interests especially when one learns that Chinese banks have hired former senior National Party politicians to be director in their firms.

http://www.stuff.co.nz/business/67913792/chinese-banking-giant-breaches…

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The relative absence of blatant cash-in-a-paper-bag corruption makes it all too easy for the powers that be to deny the much more insidious and entrenched style of corruption that we do have.

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Labour's Stuart Nash has offered up figures in today's Sunday Star-Times (page A4 no web info yet) about how few of the intentions of OIO grantees have been followed up in recent times.
One conclusion you can get from this is that their audit is next to useless in both numbers and scope.
The fact is that with their very small budget, the OIO cannot do much, if at all.
Apart from that the audit should be done independently from the Auditor Generals office and be much wider. Also the emphasis on granting of applications needs to have some teeth shown with the potential for assets to be seized and sold off.

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Michael Reddell went to a Pathways Conference

I found the Minister’s speech rather unimpressive. The organisers described it as a “keynote” but it was anything but. Unfortunately, I can’t quote from it, but suffice to say he appeared unimpressed by anyone – be it the Herald, or perhaps even stray bloggers (with long-outstanding OIA requests in for departmental advice on immigration targets) – suggesting that waves of migrants were putting pressure on resources or infrastructure.

http://croakingcassandra.com/2015/07/24/immigration-and-the-evidence-of…

Why the secrecy? What is the National Government hiding? Are they beholden to business interests?
There's a piece of meat for Paddy Gower (if he eats that sort of meat)? Andrea Vance ("Imi-what?")?

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