Buying a business in NZ

Ian Loftus · Posted: Thu Jan 29, 2004 5:34 am Post subject: Buying a business in NZ

Hi Everyone,

I joined the Forum today, great comments and useful info.

Reading through some of the topics, a few people have talked about the move from the UK to NZ taking 18-24 months, which seems like a very long time? I've found a business I really like and I'm in correspondence with the current owners as I write. Can anyone tell me if it will still take up to 2 years to complete checks and all the paperwork etc. even if I can buy the business on a trip over in March?
Also can anyone point me in the direction of a website covering legisation on the above and the first steps I need to take?

This is a small business which I intend to operate with my wife, but build up for the future and our three ankle biters

Krs

melcastiger · Posted: Thu Jan 29, 2004 6:18 am Post subject:

I dont think it would take you this long. I looked into doing this myself. You can apply for a long term business visa it lasts for 2 years I think and then you can apply for residency. There is also an entreprenuer catagory in the skilled migrant catogory, if you look on the immigration web site it tells you there. But (dont quote me on this) I think you will need to establish a business plan to show how it will benefit New Zealand and whether you will create job opportunities for New Zealanders. Plus you will need enough money to buy the business and to support yourself for the two years.

I did speak to a bank in New Zealand about business loans etc, apparently they will only lend money to buy a business if you are a New Zealand resident and you have a property to secure part or all of the loan.

So I suppose providig you have plenty of money you would be ok.

Good Luck!!!!!!!

veronica · Posted: Thu Jan 29, 2004 12:19 pm Post subject:

they are also quite fussy that you have had experience of running a buiness of the same sort too. might be worth phoning or emailing the Wellington LTBV people before you commit to much will try to find the email address for you. veronica

Jamie Smith · Posted: Thu Jan 29, 2004 6:18 pm Post subject: Re: Buying a business in NZ

Hi all

LTBV is for people who can show that they have already owned or presently own or controlled a business.

You then carry forward to do similar business in NZ. A good business plan is necessary, as is thorough research, adequate funds, and evidence of benefit to NZ by way of new jobs created, new channels/products etc, new exports, measurably greater competition. Please note that taking over an existing business is not enough to gain approval unless investment is about NZ$1million. You have to grow it somehow, and by reasonable amount ie 3% annual growth in line with GDP is not enough.

You end up with a self employment permit tied to a general location and industry. 3 years in total , drawn down in two parts so you have to show evidence of business establishment/purchase within 9 months before they give you the full term to 3 years. You then jump into Entrepreneur category for residence after you have owned and operated for 2 years.

You'll need to show that at time you go for PR, the business can support you and family.

You could use your March visit to do the necessary research, but be careful about what you enter into (we can help guide you).

Processing time for UK is about 2-5 months for LTBV, although we have had one through in 2 days (gobsmacked, we were.)

There's more free info at www.benz1.com and www.businessplans.co.nz, or we can set up a free consultation by questionnaire if you meet the ownership/control criteria and then send me a PM. Please note we are not immigration agents, we're business planners.

Good luck

veronica · Posted: Thu Jan 29, 2004 7:39 pm Post subject:

Re the email address for the LTBV peopleat the NZIS, try mail@nzis.dol.govt.nz
cheers Veronica

Ian Loftus · Posted: Thu Jan 29, 2004 9:48 pm Post subject:

Thanks everyone,

You've provided some good and bad feedback!!! The business I'm looking at isn't something I've done before, although its not rocket science, the existing owners have a good handle on the areas were it can grow and some great ideas for other product development and a robust business plan, plus they only run it 4 days a week and are willing to help train etc. How would this effect my application status? (I have managed businesses before, and the nature of the NZ business is my hobby and passion. (Food is a clue)).

The investment part shouldn't be a problem we've lived in the same house for 18 years and the equity is staggering, I would be hoping to invest the NZ$1m you mentioned Jamie. The asking price for the biz is about 1/2 of that, would that leave sufficient funds to buy a house and support the family for two years and assuming the biz grows at more than the 3%? (I would imagine that just extending opening hours would have an impact)

Thanks for the email address V. and will perhaps speak with you Jamie once I get my head around all this stuff.

Thanks again everyone, and any more snippets would be most welcome.

Krs

Jamie Smith · Posted: Fri Jan 30, 2004 1:16 am Post subject:

Issue #1. NZ biz must be related to previous management or employment. If a wholesaler gets knocked back when applying to be a retailer, I'd go very carefully here.

Issue #2, growth would have to be minimum 10-20% per year over 3 years to justify that.

Issue#3. In NZ, if someone only runs a business for half the week, either a) they're making plenty and are in comfort zone or b) they can't justify paying extra opening /operating costs for the modest extra income that would arise. need to check out the local market and competition.

Issue #4, managing a biz must include responsibility for HR, Ops, marketing and finance. It is possible to get approved with less than the full set of skills, but there would have to be strong areas of benefit to compensate for less than ideal match with policy.

If you can stump up with $1m, have a look at Investor category, you get PR up front. You can't live in your investment, so 1/2 is in business, 1/2 in investment property which provides rent from tenant to cover yourt own rental. Works for some, but not everyone likes it.

Cheers