Overseas Purchasers - How buying a business might assist with your immigration to New Zealand

POSTED BY Ben Morrison
Olivia Porter
07 December 2015

posted in Business | Overseas investment

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If you are based overseas and wish to migrate to New Zealand, buying a business in New Zealand may assist with that aspiration.

Entrepreneur Work Visa


An Entrepreneur Work Visa will allow you to move to New Zealand and buy (or establish) your own business. To be approved for an Entrepreneur Work Visa, you must:

  • make a minimum capital investment of $100,000 (although Immigration New Zealand can waive this requirement in certain situations for businesses in science, ICT, or other high value export-oriented sector);
  • score at least 120 points on a scale that awards points for business experience, job creation, export business potential, providing unique or new products/services to New Zealand, the level of capital investment and age – you can also get bonus points if the business is located outside of Auckland;
  • have a business plan for your business;
  • not have been involved in bankruptcy or business failure in the last 5 years;
  • not have been involved in business fraud or financial impropriety;
  • in addition to your minimum capital investment of $100,000, have sufficient funds to finance your business and maintain yourself and your partner and children in New Zealand;
  • must meet certain health and character requirements - your partner and children will also need to meet those requirements;
  • meet English language requirements; and
  • buy or establish a business that would not constitute an “unacceptable risk” to the integrity of New Zealand’s immigration or employment laws or policies.

An Entrepreneur Work Visa is initially issued for 12 months, during which time you are able to buy or establish your business in New Zealand (this is known as the “start-up stage”). After the start-up stage, you can be issued a further 24 month visa once you have shown that you have taken steps to establish your business.

After you have been self-employed in your business for 2 years (or 6 months in limited situations) you may be able to then apply for a residence visa.

Overseas Investment Considerations

As an overseas purchaser, it is vital that you ascertain whether you need the prior consent of the Overseas Investment Office (OIO) under the Overseas Investment Act 2005 (Act).

A transaction that will result in an overseas investment in sensitive land or an overseas investment in significant business assets will require consent under the Act. An acquisition of fishing quota or an interest in fishing quota will also require consent.

Sensitive land includes:

  • non-urban land of more than 5 hectares;
  • 0.4 hectares of most Islands;
  • 0.4 hectares of land earmarked for conservation, reserves, parks etc.;
  • foreshore or seabeds;
  • 0.4 hectares of lake beds;
  • 0.4 hectares of historic places type land (including land with historic Maori connection);
  • land which is greater than 0.2 hectares which adjoins the foreshore; and
  • land which is greater than 0.4 hectares which adjoins certain types of protected land (such as reserves, parks, certain esplanade reserves and esplanade strips).

It is important to be aware that an overseas investment in sensitive land includes acquiring a leasehold interest in sensitive land where the term of the lease (including rights of renewal) exceeds 3 years.

In terms of significant business assets, you will need consent if you are acquiring business assets worth more than $100 million.

For the purposes of the Act, an individual is an overseas person if he or she is neither a New Zealand citizen nor ordinarily resident in New Zealand. To be ordinarily resident in New Zealand, you must hold a residence class visa and either:

  • be domiciled in New Zealand; or
  • be residing in New Zealand, with the intention of residing here indefinitely, and have done so for the immediately preceding 12 months.

Companies and trusts can also be an overseas person depending on their ownership and governance structure. Generally speaking, if an overseas person or overseas persons have 25% or more interest in the transaction, it will be an overseas investment.

If you do need OIO consent, or it is possible you may need consent, you should ensure your business sale and purchase agreement is conditional on you obtaining such consent. The process for obtaining OIO consent can take many months, so it is important to leave sufficient time to satisfy such condition.

Conclusion

Immigration requirements and the Overseas Investment Act are two extremely important areas to consider when purchasing a business as an overseas person. Considering these matters in advance can save significant time, cost and liability.

Image courtesy of Christchurch City Libraries

POSTED BY Ben Morrison
Olivia Porter
07 December 2015

posted in BusinessOverseas investment

VIEWED 5017 TIMES

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