BK6.20 Investment funds (26/11/2007)

1. The principal applicant must invest a minimum of NZ$10 million in New Zealand for a period of four years.
2. NZ$2 million of the overall NZ$10 million must be placed in one or more active investments.
3. The principal applicant must:
   1. nominate funds and/or assets equivalent in value to NZ$10 million; and
   2. demonstrate ownership of these funds and/or assets; and
   3. demonstrate that the nominated funds and/or assets have been earned or acquired legally (see BK6.20.1 (c) below).
4. All invested funds must meet the conditions of an acceptable investment set out in BK6.20.25.

BK6.20.1 Ownership of nominated funds and/or assets

1. Nominated funds and/or assets may be owned either:
   1. solely by the principal applicant; or
   2. jointly by the principal applicant and partner and/or dependent children who are included in the residence application, provided a business immigration specialist is satisfied the principal applicant and partner have been living together for 12 months or more in a partnership that is genuine and stable (see R2.1.15 and R2.1.15.1 (b) and R2.1.15.5 (a)(i)). If so, the principal applicant may claim the full value of such jointly owned funds or assets for assessment purposes.
2. If nominated funds and/or assets are held jointly by the principal applicant and a person other than their partner or dependent child, the principal applicant may only claim the value of that portion of funds and/or assets for which they provide evidence of ownership.
3. The principal applicant may only nominate funds and/or assets that they earned or acquired legally, including funds and/or assets which have been gifted to them unconditionally and in accordance with local law. Where nominated funds and/or assets have been gifted to the principal applicant a business immigration specialist must be satisfied that the funds and/or assets being gifted were earned lawfully by the person/s gifting the funds and/or assets.
4. The nominated funds and/or assets must be unencumbered.
5. The nominated funds and/or assets must not be borrowed.

BK6.20.5 Funds and/or assets earned or acquired legally

1. Funds and/or assets earned or acquired legally are funds and/or assets earned or acquired in accordance with the laws of the country in which they were earned or acquired.
2. Business immigration specialists have discretion to decline an application if they are satisfied that, had the funds and/or assets been earned or acquired in the same manner in New Zealand, they would have been earned or acquired contrary to the criminal law of New Zealand.

BK6.20.10 Unencumbered funds

Unencumbered funds and/or assets are funds and/or assets that are not subject to any mortgage, lien, charge and/or encumbrance (whether equitable or otherwise) or any other creditor claims.

BK6.20.15 Funds already held in New Zealand

1. Funds held in New Zealand at the time the application is made may be included in investment funds, however, periods of investment in New Zealand before approval in principle cannot be taken into account when calculating the four-year investment period.
2. Funds held in New Zealand must originally have been transferred to New Zealand through the banking system from the country or countries in which they were earned or acquired legally, or have been earned or acquired legally in New Zealand.

BK6.20.20 Evidence of the principal applicant's nominated funds and assets

1. Principal applicants must provide evidence of net funds and/or assets to the value of the required investment funds.
2. Principal applicants must provide evidence to the satisfaction of a business immigration specialist that the nominated funds and/or assets were earned or acquired legally.
3. All documents provided as valuations of assets must be:
   1. no more than three months old at the date the residence application is made; and
   2. produced by a reliable independent agency.
4. A business immigration specialist may seek further evidence if they:
   1. are not satisfied that the nominated funds and/or assets were earned or acquired legally, or
   2. consider that the nominated funds and/or assets may have been gifted or borrowed without being declared, or
   3. are not satisfied with the valuation provided, or
   4. consider that the nominated funds and/or assets fail in some other way to meet the rules for investment funds.

BK6.20.25 Definition of 'acceptable investment'

1. An acceptable investment means an investment that:
   1. is capable of a commercial return under normal circumstances; and
   2. is not for the personal use of the applicant(s) (see BK6.20.30 below); and
   3. is invested in New Zealand in New Zealand currency; and
   4. is invested in lawful business enterprises or managed funds that comply with all relevant laws in force in New Zealand; and
   5. is either a semi-active or an active investment; and
   6. is not (directly or indirectly) invested in residential property development (see BK6.20.50 below); and
   7. has the potential to contribute to New Zealand's economic transformation goals of innovative, productive, and globally competitive firms.
2. Notwithstanding BK6.20.25 (a) above, where an investment fails to meet one of the acceptable investment requirements, a business immigration specialist may consider, on a case by case basis, whether the failure was beyond the control of the principal applicant and if satisfied that this was the case, may consider the investment acceptable.

BK6.20.30 Personal use of investment funds

Personal use includes investment in assets such as a personal residence, car, boat or similar.

BK6.20.35 Definition of 'active investment'

1. An active investment is:
   1. a direct investment of $100,000 or more, in the establishment of a new lawful enterprise which undertakes significant economic activity in New Zealand, and results in the principal applicant acquiring 10 percent or more shareholding; or
   2. a direct investment of $200,000 or more, in an existing lawful enterprise which undertakes significant economic activity in New Zealand, and results in the principal applicant acquiring 10 percent or more shareholding.

BK6.20.40 Definition of 'semi-active investment'

A semi-active investment is a direct or indirect investment (including managed funds) in the equity of an existing lawful enterprise which undertakes significant economic activity in New Zealand, and does not qualify as an active investment.

BK6.20.45 Managed funds

1. For the purposes of this policy 'managed funds' are defined as either:
   1. a managed fund investment product offered by a financial institution; or
   2. funds invested in equities that are managed on an investor's behalf by a fund manager or broker.
2. In order to be acceptable as a form of semi-active investment a managed investment scheme must be a 100 percent New Zealand equity based fund (ie a fund that invests only in New Zealand companies).

BK6.20.50 Residential property development

For the purposes of this policy, residential property development includes:

1. building, or arranging to build, a household unit for the purpose of selling it; or
2. acquiring a household unit from a person who built it or arranged for it to be built for the purpose of selling it; or
3. acquiring and subdividing land for the purposes of residential property development; or
4. acquiring and/or selling an existing household unit.

Effective 26/11/2007