more nzis stupidity

rodders · Valued Member Joined: 25 Nov 2003 Posts: 134

Lose 1c and you're out, millionaire told

A British entrepreneur has been told he will lose his New Zealand residency if the capital value of his investment in this country falls below $1 million in the next two years.

Nick Allan gained permanent residency under the investor category, which requires applicants to have a minimum of $1 million to invest in New Zealand but do not necessarily want to directly run a business.

In March, Mr Allan moved to Wellington and put $1 million in a bank term deposit account. But he wants to use part of the money to invest in, and mentor, start-up small businesses. He has four projects lined up.

However, at the end of a four-year application process, an unexpected interpretation by the Immigration Service of minimum investment rules has put the brakes on those plans.

In a letter, which confirmed a residence visa would be issued, the Immigration Service pointed out that the "value of the funds must not go below $1 million at any time during the two-year investment".

When Mr Allan challenged that interpretation, the service cited a rule that investment funds "the same as, or greater than, the amount of funds and assets nominated" in the application for residence must remain in an "acceptable investment" for two years.

That meant that if the capital value of his investment dropped so much as a cent below $1 million, he could be kicked out of New Zealand.

"If I bought $1 million of New Zealand Telecom shares at $5.70, and the very next day they went down to $5.69, I have failed," Mr Allan said.

Or, "you put $100,000 in (a new business) and we spend just 1c on one paper clip the next day without any income coming in", the investment would fall below the threshold.

Investor migrants are not allowed to top up their investment with extra money from overseas to remain above the $1 million.

Instead, an Immigration Service official told Mr Allan that "it would be naturally assumed that you would have to put more money in than $1 million to cover the brokers' fees" – despite there being no suggestion of that in the rules.

Mr Allan said the Immigration Service appeared to be making ad hoc interpretations of the rules.

"There is no sensible option for migrant business investors like me to invest in New Zealand business because, while the risks of investing might be acceptable, the risks of failing to achieve the Immigration Service's criteria are not," he said.

The policy appeared to favour passive investment rather than active investment that would generate economic growth, Mr Allan said.

"The worst place for my money, for both New Zealand and myself, is to have it sitting in a deposit account earning 3.4 per cent interest after tax."

Immigration Service spokesman Brett Solvander told BusinessDay that the service had no choice but to enforce the rules "hard as that may be".

Most migrants put the money in a term deposit account, Mr Solvander said.

Anyone who lost their residence as a result of their capital falling below the threshold could appeal to the immigration minister.

But that meant putting his long-term fate in the hands of the minister "and whether he had fallen out of the wrong side of the bed. It is just a joke", Mr Allan said.

PricewaterhouseCoopers chairman John Shewan said if the Immigration Service's interpretation of the rule was correct, the rule needed to be changed.

Mr Allan's plans were the kind of investment the Government was targeting with the policy. "He is exactly the type of person that we should be attracting," Mr Shewan said.

http://www.stuff.co.nz/stuff/0,2106,2897355a13,00.html

rodders · Valued Member Joined: 25 Nov 2003 Posts: 134

maybe something's going to be done about it now.

Government reviewing $1m migrant rules
06 May 2004

The Government will review immigration investment rules after the Dominion Post revealed that a business migrant risked losing residency if his New Zealand investments dipped below $1 million in the next two years.

British entrepreneur Nick Allan gained permanent residency under the investor migrant category, which requires applicants to have a minimum of $1 million to invest in New Zealand.

He has since been frustrated in his efforts to set up business by Immigration Service rules which say the "value of funds must not go below $1 million at any time during the two-year investment."

Mr Allan said the policy favoured passive investment rather than active investment that would generate employment and economic growth.

"The worst place for my money, for both New Zealand and myself, is to have it sitting in a deposit account earning 3.4 per cent interest after tax," he said.

A spokeswoman for Immigration Minister Paul Swain said the minister was aware of concerns about the business migrant policy.

"The business policy is under review and the minister expects to make an announcement when the review is complete about any changes," she said.

Immigration Service spokesman Brett Solvander said the policy was being looked at by legal experts, who were considering the impact of making changes.

Mr Allan, 38, from Bristol, decided his future lay in New Zealand after making his fortune with a design and brand communications business.

http://www.stuff.co.nz/stuff/0,2106,2898508a13aT,00.html