Charge the ultra-rich tens of millions of dollars for a New Zealand passport – Andrew Barnes

Peter Thiel became a New Zealand citizen after only spending days in the country. Photo / Getty Images

THE FACTS

• The Government last week announceed the Business Investor Visa, which will give foreign businesspeople investing $2 million into an existing firm here a fast-track to residency in New Zealand.
• A $1m investment comes with a three-year work-to-residency pathway.
• If the business is worth $1m or $2m, they have to purchase the business. If it was worth more than that, they have to invest at least 25% of its total value.

There is a solution to our perpetually contorted immigration settings – which change with each new Government and then again, typically, inside every term – which is so self-evident that it is nearly laughable.

Last week’s announcement of a new Business Investor Visa is designed well to attract people who will put skin in the game into New Zealand businesses by either purchasing a business (if it’s worth $1 million or $2m) or investing at least 25% of its total value. The carrot here is the fast-tracked residency.

Are we setting the bar high enough when it comes to the long-term value of becoming a Kiwi?

The one thing we have never asked ourselves as New Zealanders inviting others to live here is: what kind of person do we want to attract? Leave aside the money and the skills for a moment – what is the value set and world view we want any new resident or passport-holder to bring in and plant here?

The question is particularly urgent because in the past few months, the current administration has sought to make New Zealand even more alluring to high-net-worth folk, entrepreneurs and investors. The enhanced Active Investor Plus Visa came into effect on April 1 to welcome “experienced, skilled investors to contribute to the growth of New Zealand’s economy” by choosing between two investment categories: Growth, with a minimum investment amount of $5m, and Balanced, starting at $10m.

To make this new, enhanced version of the Golden Visa truly work for our national interests, I suggest a core list of prerequisites:

1: Forget about trying to pick ‘winning’ investment

There is a huge temptation, in this era of technology-driven wealth inflation, to look at the Active Investor Plus Visa through the narrow lens of tech: who is going to bring the next great idea in artificial intelligence (AI) or the gig economy to set up on our shores?

Enormous problems with the extractive gig model aside, that it is the wrong way to look at value. First, what you think is great today may well be obsolete tomorrow, and second, it does not consider the virtues or otherwise of the person with the idea.

The real objective of the Golden Visa should be to pick the people, not the investment – so we need to pivot our focus away from the investment or company per se and towards the kinds of people who are likely to care about contributing to a better New Zealand.

2: Acknowledge that new arrivals may be traditionalists, not techies

Further to that point, some of the most innovative and ambitious newcomers to our country may belong to established sectors, not emerging ones. When I came here in 2012, it was to invest in what was then a troubled 130-year-old company in the “boring” fiduciary services industry. I put in my own money and turned a struggling business into New Zealand’s leading trustee company within 10 years.

Andrew Barnes is the founder of Perpetual Guardian.

The value created (excluding fees to bankers and advisors) is probably greater than the combined impact of hundreds, if not thousands, of tech start-ups, considering their high failure rate.

Putting money into a traditional New Zealand business that grows and expands, supports employees and pays tax is therefore just as valid a contribution as any start-up investment.

3: Attach the Golden Visa to a compulsory charitable investment requirement

Immigration New Zealand confirmed in June that liberalising access to the Active Investor Plus Visa had driven interest upwards: between April 1 and mid-June, there were 189 applications for the visa, versus 116 in the previous two-and-a-half years. Demand for access to New Zealand is huge, but here is the thing – we have the right to make demands in exchange for the opportunities and lifestyle we offer.

The core requirements for everyone who is approved for a Golden Visa should be that a) they have a demonstrated history of being seriously charitable and generous wherever they have lived and worked, and b) they are required to commit a substantial proportion of their qualifying investment to philanthropic activity, the value of which remains in New Zealand – even if the visa-holder does not. This could be in the form of a foundation where they park their money; introductions to charities with which they can form partnerships; and/or investment in Government funds that support the public interest, such as nationally significant infrastructure.

Other countries offering Golden Visas have no compunction about making these demands: the US’s EB-5 Immigrant Investor Programme offers a path to a green card with a current minimum investment of US$800,000 ($1.35m) in a targeted employment area (a rural or high-unemployment zone) or infrastructure project. Italy’s Investor Visa grants a two-year residency with options including €1m ($1.98m) as a philanthropic donation.

4: Ask more of people in the ultra high net worth category

The billionaire Peter Thiel, one of the world’s savviest tech investors and the patron behind JD Vance’s rise to a heartbeat away from the US presidency, controversially spent just 12 days in New Zealand before being granted citizenship by the then Internal Affairs Minister in 2011.

Thiel had never lived here and has not since, but he successfully argued that his entrepreneurship and philanthropy meant giving him a passport was in the public interest.

Around that time, he bought land in Wānaka, made some relatively modest investments in software and fibre optics and donated $1m to the Christchurch earthquake appeal fund.

Peter Thiel. Photo / NZME

With respect to Cabinet at the time, it missed a golden opportunity to set a real market price for the right to be a Kiwi citizen. There will always be demand from people of extraordinary means who want a bunker or a sanctuary in a developed liberal democracy at the bottom of the world. And there is nothing inherently wrong with “selling citizenship”, as the Government was accused of at the time. The fault is in not charging enough.

It will be world’s-smallest-violin news in the minds of many, but the ultra-wealthy are already facing steep security costs, with the security budgets for the chief executives of 10 big tech companies analysed by the Financial Times rising to more than US$45m in 2024. Alphabet, Amazon, Meta, Nvidia and Palantir all increased their protection budget by more than 10% year on year.

Given what they are already forking out, we are entitled to charge for a relatively safe bolthole. The price of a passport for someone of Thiel’s exceptional wealth should start in the tens of millions and that money should be directed to fixed charitable/public interest investments – a Government infrastructure fund, specific charities and philanthropic programmes – that stays here and benefits New Zealanders.

The rich can live anywhere and they want to come here because they like what we offer – so if you are insanely wealthy and you want access to this country, you should pay to play. We have the right to set our own price for the benefit of all New Zealanders.

Sign up to Herald Premium Editor’s Picks, delivered straight to your inbox every Friday. Editor-in-Chief Murray Kirkness picks the week’s best features, interviews and investigations. Sign up for Herald Premium here.