A Cabinet Paper introduced last fortnight takes a closer look at the flaws in the Long Term Business Visa (LTBV) regime, suggesting radical changes to plug the existing loopholes.
LTBV will be renamed as ‘Entrepreneur Work Visa’ (EWV) and Entrepreneur Visa will be called, ‘Entrepreneur Residential Visa’ (ERV).
The ‘Entrepreneur Plus Visa’ will be disestablished.
The new policy is expected to be made effective by the end of this month.
Poor performance
According to Immigration New Zealand (INZ), LTBV holders (as at the end of 2010) were on average deriving only 34% of their income from their business. Officials said that migrants were establishing business not to boost for their commercial potential but only to meet minimum immigration requirements. Some of these businesses were sold to new LTBV applicants after their original owners obtained permanent residence.
Studies show that a majority of migrants own and manage businesses with very limited growth prospects. They also tend to gravitate towards the large cities like Auckland.
According to INZ, the overall approval rate dropped from 89% in 2009-2010 to 71% in 2013.
Currently there are 39 proposals developed to enable immigration authorities to choose migrants who can create high growth and innovative businesses through a new selection mechanism.
Smooth transition
The minimal change system will ensure that there is no disruption to the fragile Application Management System to facilitate smooth transition.
INZ will develop an online eligibility calculator for prospective applicants to assess the chance of success prior to submitting a formal application. Potential applicants would be encouraged to use a web-based tool to test their eligibility, helping them to know where they stand.
The new point system aims to provide a ready reckoner on how to improve the quality of the applications and not discourage them.
Minimum capital
One of the requirements suggested is that business migrants must invest a minimum of $100,000 in their business excluding working capital.
INZ has the discretion to waive this minimum requirement if the officials are convinced that the business proposal has the potential to demonstrate a high level of innovation or it has high, short-term growth prospects as an export-oriented entity.
However, business plans can be changed only once after the visa application is lodged.
Other criteria
The new proposal takes into consideration other criteria including age, level of capital invested, level of turnover, business experience, intention to export, ability to create more jobs, level of innovation.
The focus would be on quality and not quantity.
While applicants must score 120 points, the Immigration Minister would have the discretion to award bonus points.
ERV will be granted to migrants running their business for at least two years, those investing at least $500,000, creating at least three jobs for New Zealanders.
LTBV will be closed five days before the new policy is announced to avoid a surge in low quality applications.
Applications lodged under the existing policy will be processed as per the existing rules and terms.
There will be a fast-track provision within the ERV for applicants who have successfully run their business for six months, invested at least $500,000 and created at least three new jobs for New Zealanders.
Saif Shaikh is a Licensed Immigration Adviser and Director of Immigration Advice NZ Ltd based in Auckland. He can be contacted on (09) 2724424; Email: saif@ianzl.co.nz
www.immigrationadvicenz.com
