KEY POINTS:
A Government bid to attract more millionaire migrants gives the richest first dibs on places, fast tracks their applications and removes most of the obstacles other aspiring residents face.
In return, the millionaires have to actively invest a portion of their money by buying into or setting up
local businesses to boost employment and the economy.
Immigration Minister David Cunliffe, launching the policy yesterday, said the new arrangement - capped at 300 investors plus family members a year - would start in November and was designed to attract serious investment here as well as ensure such investors used their money in local businesses to boost the economy and create jobs.
Under the new policy, investors cannot leave the "active" portion of their funds in bank accounts - they must either directly or indirectly invest money here. However, investment in residential property developments is banned for the active funds.
The remaining funds must be in a "semi-active" investment, which could include the migrant investing in a local company without becoming a significant shareholder or in managed funds.
Mr Cunliffe expected the total number of residencies under the policy to be about 1000, once the 300 millionaires included family members.
The new policy was prompted by a slump in the number of investors from more than 1000 a year to just 18 this year after a rule change in 2005 which allowed the Government to hold $2 million in funds for five years and control the type of investment businesses..
Association for Migration and Investment chairman Bernard Walsh said immigration policy alone would not result in a flood of millionaires.
"We are competing against many other economies for investors, and without more harmonisation between immigration and taxation laws and general investment policies, I don't think this will be enough to attract the kind of investor we are hoping to get."
Mr Walsh, an adviser who specialises in business and investor migrants, said the new policy did remove many of the flaws of the existing policy by allowing investors to make a commercial return on the money, rather than handing it over to the Government. Other incentives were the dropping of the language and age requirements.
National immigration spokesman Lockwood Smith said Labour was mopping up the mess it had made with its initial 2005 policy but the new policy was a step in the right direction.
"An important element is the active investment component, rather than making people put it into Government bonds which no entrepreneur wants to do."
Business New Zealand productivity specialist Nicholas Green said the changes provided more incentives. "Changing from a requirement to invest with the Government to investing in New Zealand businesses is more realistic and more likely to result in innovation and productivity improvements."
