Overseas investors are being offered off-the-plan Auckland apartments in a new property-for-residency scheme.
Conrad Funds Management is making the offer to investors seeking New Zealand residency and willing to buy a $750,000-plus Auckland apartment to qualify.
The Financial Markets Authority says it has no issues with the offers but people should get independent advice before buying in.
The business, associated with Robert Holden's Conrad Properties Group, has issued the offer documents on two big Auckland apartment projects: Union & Co rising on Union St and The Vincent at 106 Vincent St.
Patrick Middleton, Conrad Funds Management chief executive, said inquiries had so far come from potential investors from Singapore, Hong Kong and France, but no investments had yet been sold as the products were new.
Conrad is marketing the schemes under the headline "qualify + purchase 'off the plan' apartments + New Zealand residency", advertising lower-priced university fees, "free state schooling subject to a small fee for children and healthcare for family".
But all the offers come with a warning saying that that usual investment rules do not apply and that those considering it should get independent legal advice.
Financial Markets Authority spokesman Andrew Park said Conrad Funds Management was a licensed managed investment scheme manager under the Financial Markets Conduct Act.
However, Conrad Funds' offer came under the wholesale exclusions allowed under the law, he said.
Offers made to wholesale investors are one of allowed exclusions, and there is a requirement to provide a prescribed warning statement in a document that contains the key terms of the offer - as has been done here. The offer and the provider are still subject to the fair-dealing provisions in the law, he said.
"We can't see any compliance issues in this offer. They're targeting wholesale investors who are deemed more sophisticated or professional investors, we'd still recommend getting some advice," he said referring to the funds seeking minimum $750,000.
Middleton said the business was licensed on June 16 last year.
"To date, CFML does not have any investors. It has received firm inquiries from several potential investors who have yet ot finalise their investment," Middleton said.
Marketing started in August and inquiries are coming from the United States, Canada, Europe and Asia, he said. Investors must put $2.5m into a company which buys the Conrad CBD apartment. Deposits are held in trust and that money is not used to fund the development, Conrad says.
Asked whether the funds were an immigration enticement, he said: "We do not regard this scheme as an inducement. CFML Residential Funds are an investment choice for wholesale investors who have a choice of investments such as New Zealand bonds, shares and property," Middleton said.
Conrad Properties has five residential towers now under construction in Auckland, he said: Park Residences at 35 Albert St, Victoria Residences at 75 Victoria St West, Ivory Residences at 10 Lion Pl in Newmarket, Union & Co at 15 Union St and Queens Square at 438 Queen St.
Conrad says criteria for the residency scheme includes being 65 years of age or under, having a level of competency in English, having at least $3m in legally earned funds and more than three years of business or management experience.
On the immigration front, Conrad told investors in marketing material that a licensed New Zealand immigration advisor would require information to manage the immigration application.