IMPORTANT IMMIGRATION POLICY CHANGES FOR ENTREPRENEUR, ENTREPRENEUR PLUS AND LONG TERM BUSINESS VISA CATEGORIES
On 8 April 2013 Immigration New Zealand (INZ) introduced changes to the purely business related categories. In summary, the following material changes have been made:
1. Working capital is no longer considered acceptable to meet base investment requirements;
2. Purchasing an existing business has now been formalised (it was silent in prior policy) although further requirements have been put in place to request that information on the business to be purchased be provided in the Long Term Business Visa (LTBV) application;
3. The benefit test has been upgraded to confirm that “significant benefit” to New Zealand be proved in any LTBV, Entrepreneur, or Entrepreneur Plus application (refer below);
4. Clarifying that the creation of employment to satisfy the “benefit test” must be for at least two full time roles, and the roles are sustainable, and provided to New Zealand citizens/residents.
RETROSPECTIVE EFFECT
The main change which affects many applicants holding LTBVs is the change to the “benefit test” that will now apply when those individuals look to apply for New Zealand permanent residence under the Entrepreneur Category. As many readers of this article will understand, the “benefit test” in an LTBV application is the same set of criteria which is used to determine the eligibility for that applicant to qualify for New Zealand permanent residence under the Entrepreneur Category after two years of successful operation of the business in New Zealand. In essence, applicants are required to demonstrate that they will be able to meet the business benefit test to obtain an LTBV, and as long as they can demonstrate that they have done so in their subsequent application for residency, they will be granted residence.
The issue with the change in policy is not so much the increase in the criteria required to demonstrate benefit to New Zealand, notably the use of the word “significant”, the issue really is that there are many applicants in New Zealand who are on LTBVs who were able to qualify under the old “benefit test”, although quite simply when many now come to look at applying for New Zealand permanent residence under the Entrepreneur Category they will be faced with a higher “benefit test”. That may mean that they may not be eligible to qualify for New Zealand residence under the Entrepreneur Policy.
There is no transitional provision that allows existing LTBV holders to demonstrate eligibility for residence under the Entrepreneur Category using the “benefit test” they secured the LTBV on, or for that matter applicants who have existing LTBVs processing at this point in time who will also be required to meet the new “benefit test” even though the “benefit test” applying to the current application will be at the lower threshold.
It is imperative therefore that individuals who hold existing LTBVs seek immediate legal and accounting advice with the new benefit test in mind. For completeness sake, here is the benefit test applied to Entrepreneur Category applications from 8 April 2013, the highlighted parts are the new added parts to the existing benefit test that applied on and before 7 April 2013:
RETROSPECTIVE EFFECT
(Con’t)“BH4.10 Criteria for a business benefiting New Zealand a. A business is considered to add significant benefit to New Zealand if it can demonstrate that it has promoted New Zealand’s economic growth by for example:
i. introducing new, or enhancing existing, technology, management or technical skills; or
ii. introducing new, or enhancing existing, products or services; or
iii. creating new, or significantly expanding existing, export markets; or
iv. creating sustained and on-going full time employment for New Zealand citizens or residents; or
v. the revitalisation of an existing New Zealand business that has led to significantly increased financial performance;
and b. The business is trading profitably on the date the application is lodged or a business immigration specialist is satisfied that it clearly has the potential to become profitable within the following 12 months.
c. If the associated Long Term Business visa application was made before 30 November 2009 the ‘creating employment’ benefit can also include non-New Zealand citizens or residence class visa holders, with the exception of the principal applicant. Note: For the purposes of BH4.10(
a)(i) and (ii): – “new” means new to New Zealand or the region of New Zealand in which the business would be located; and – “existing” means existing within New Zealand or the region of New Zealand in which the business is located. For the purposes of these instructions, the employment of non-New Zealand citizens or residents is not considered an acceptable example of a business benefiting New Zealand. Effective 08/04/2013”
The other main concern that the writer has is that there is no definition of “significant”, although it is quite likely that INZ will apply a restrictiveand literal interpretation of the policy until case law is able to settle the definition of the word “significant”. Many current LTBV holders therefore are in danger of encountering significant resistance in subsequent residence applications under the Entrepreneur Category within the next two years until this term is adequately defined.
INZ in their amendment circular have advised that the change to the “benefit test” is a “minor” change. It is anything but that for existing LTBV holders. The change could mean the difference between qualifying for New Zealand residence and not, and therefore the stakes are quite high for LTBV holders who have invested significant sums of money into New Zealand business to have the New Zealand Government now change the “benefit test” that applied to them when they are looking to test their eligibility for residence in the future.
Mark Williams
Immigration Partner
Lane Neave Lawyers
For further information or assistance with the immigration process please contact Mark Williams of Lane Neave Lawyers on +64 3 379 3720or email [email protected]www.liveinnewzealand.co.nz
Disclaimer: The content of this article is general in nature and not intended as a substitute for specific professional advice on any matter and should not be relied upon for that purpose.