new entrepreneur work visa – how does it work

Summer is continuing into fall for now. Warm days and not a lot of rain. Farmers began to worry. The soil in large parts of the country is apparently is dryer now then during last year’s dry spell. Wine makers and grape growers are embracing the weather conditions. Last week they got a scare in the form of tropical storm Lusi who was said to be dumping huge amount of rain in most of the country. Just before harvesting what is said to be one of the best crops in history they became a bit worried.

It is very easy to start your own business over here. A few clicks on the internet and you are done. Of course to be able to do this you must be a New Zealand citizen or resident. Or you must hold one of the entrepreneur visa. These categories were closed rather abruptly in December 2013. The policies have been revamped and will open again on 24 March.

In the past it was relatively easy to obtain the Long Term Business Visa, a temporary visa that could lead to residence if you were able to set up your business and make it profitable within a number of years. There was no investment threshold. This lead to people who had no other visa options to start a B&B or a café. Most of these people probably contributed to the New Zealand economy and to the New Zealand society but with the new policy being announced it is clear Immigration New Zealand wants to see a different kind of entrepreneur coming to this great country.

The new Entrepreneur Work Visa, a three year temporary visa, is based on a points system. You will need 120 points to qualify. There is no Expression of Interest system such as under the Skilled Migrant Category, where you have to submit your EOI into a pool and it will (or will not) be selected in one of the fortnightly draws after which you are invited to apply for residency. This a merely a test you have to pass and if you believe you meet the points requirement you may apply.

As said before the bar has been raised. You will need a minimum of NZ$100,000 in investment capital (and extra working capital) but you only qualify for points from and above the NZ$200,000 threshold. Your age, as long as you are over 18 and under 60 will give you points. You may apply for an entrepreneur visa if you are over 60 and meet the points requirements. You also need previous business experience, either general or relevant to the business plan for at least three years or senior management experience for at least 5 years.

So if you are 40 years old, have 7 years of relevant self-employment experience, you can invest NZ$200,000 and you believe you will need two full time employees you come to 80 points. Nowhere near the 120 pass mark. If you set up your business outside of Auckland you qualify for another 20 points and if you can either up your investment capital to NZ$400,000 or you think you can employ at least five kiwis you meet the threshold. Not very easy.

However there are a few other options to collect points. Immigration New Zealand has put a focus on two aspects. One is export and two is bringing new or innovative products to New Zealand. So if you export goods and forecast you may reach an annual turnover of at least NZ$200,000 you qualify for points. Bringing a new or innovative product to New Zealand will get you 30 points. From this perspective is seems better to start a new business instead of buying an existing one.
There is some debate around what is considered exporting and what new or innovative products are.

Be aware you will have to meet the forecast and projections (e.g. about the number of full time staff you will employ) you make in your business plan to be able to gain residency later on. Also tricky, people who are currently on Long Term Business Visa will have to meet the new residency criteria under the Entrepreneur Plus category.

As a final note, it seems likely there will be a huge drop in the number of applications. Most people will not be able to meet the required 120 points. Maybe in a year’s time the policy will be reviewed and some of the requirements will be slightly amended