Buy your way into New Zealand for £658,000   30 Dec 2009

MIGRATION - As new Zealand emerges from an 18-month recession, the government has relaxed its migration policy to allow potential investors and entrepreneurs to gain permanent residency.

Currently the majority of Brits hoping to live permanently in New Zealand must have a skill that is in demand, such as a medical qualification. But the new investor policy, announced in the summer, gives people with substantial capital the opportunity to emigrate to the Pacific Ocean island and boost the nation's evolving economy.

Under the new policy two types of investor will be able to gain immediate residency. One has no age or business conditions, but requires an investment of NZ$10m (£4m) over three years. The other category requires an investment of NZ$1.5m (£658,000)over four years, plus three years of business experience and an age limit of 65.

Those applying for the second category must also have settlement funds of NZ$1.5m. Applicants must spend a minimum time in New Zealand of 73 days a year for the first category and 146 days a year for the second.

Migrants entering under an investor visa would be able to invest in a range of products including government bonds, corporate bonds, equities and managed funds. They would also be able to take advantage of the country's interest rate, which currently stands at 2.5 per cent, and lack of inheritance tax.

New Zealand is gradually emerging from its longest recession in decades. In September, the economy grew slightly - by less than 0.1 per cent - which marked the first expansion in a year and a half and appeared to indicate that the recession was beginning to bottom out.

Just this week it was reported that wages in the country had risen by more than economists had projected in the third quarter, as companies began paying more to attract and retain workers.

But the jobless rate rose to 6.4 per cent in the same quarter, the highest level since 2000, and the government has predicted that the unemployment rate could further rise to about 7 per cent by mid-2010.

In a bid to accelarate economic progress, the centre-Right government, which was elected last November, has made bringing in business migrants a priority.

Announcing the new investor scheme the immigration minister, Dr Jonathan Coleman, criticised the previous administration for running an investor policy that made unrealistic investment and English language demands. He said the stringent requirements had led to a drop off in business migration.

"The last government's business migration policies have not attracted investment. Since 2007, there have only been 23 migrants bought to New Zealand through Labour's business migration policy," said Dr Coleman.

Under the old policy the minimum amount people were required to invest ranged from $2.5m to $20m.

"Business migration needs to be urgently addressed, and stakeholders' feedback has been extremely positive regarding this new package," said Dr Coleman.

"This fresh approach will ensure we bring more investors, connect them with existing business networks, and create real jobs for New Zealanders," added Gerry Brownlee, the country's economic development minister.

Andrew Lockhart, regional manager for Immigration New Zealand in the UK, said that the reason for introducing the policy was two-fold.

“It provides opportunities for people to invest in New Zealand and brings skills they might have in terms of investment into the country,” he said, adding that he hoped that the new policy would attract wealthy Britons who already have their own successful businesses.

Catherine Tlapek, senior investment manager at Investment New Zealand, said that the country offered a much more diverse range of investment opportunities than people realised.

“People can think we’re just an agricultural shop, but we’re much more than that. We have a strong ICT [information and communications technology] industry, a strong multi-media industry.”

Although New Zealand is in itself a small country, Miss Tlapek pointed out that it enjoys free trade agreements with Australia, Singapore and China.

“We are a gateway to Asia,” she said.

She added that the new policy also held a number of benefits for the country, with the potential to bring in new skills and forge an international business network.

But Gareth Kiernan, managing director of Infometrics, a New Zealand-based economic forecasting company, said that he was "cautious" about the country's immediate economic prospects.

Although the country was technically out of recession, he said immediate growth prospects for the next six months were still “a bit on the fragile side”.

“But overall things are brightening due to monetary and fiscal stimulus, a rebounding housing market and a labour market that hasn’t got as bad as the pessimists were suggesting,” Mr Kiernan added.

He went on to say that he was still “cautious” about the country’s economic prospects as “much of the recent rebound in business and consumer confidence seems to be built on the premise that things can only get better from here, rather than any substantive pick-up in demand so far.”

“However,” he added, “there are early signs of consumer spending starting to turn around. Our Reserve bank seems determined to keep interest rates at stimulatory levels well into 2012, which will feed through into a further upturn in the housing market and more consumer spending.

“Improved demand conditions will also encourage businesses to start investing again from the middle of next year, and we see economic growth topping 3 per cent per annum by early 2011.”

But he questioned the country’s ability to maintain that rate of growth.

“Most New Zealanders haven’t suffered a great deal of pain over the last two years (certainly not as bad as in the US, UK and Europe).

“Households have done a bit more saving in the past, but with the housing market rebounding and unemployment unlikely to get much above 7 per cent, give it 12 to 18 months and we could be back to our free-spending, debt-accumulating ways,” he said.

In terms of sectors with a relatively health outlook, Mr Kiernan said that the agricultural sector was looking “OK” thanks to the recovery in commodity prices and tourism had “some potential to pick up as Asian economies strengthen”.

But he warned that manufacturing would continue to struggle over the medium term.

Source:Telegraph

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