Rich overseas investors could inject much-needed private capital into the economy in exchange for a safe haven from coronavirus, according to an expert in entrepreneurship.
Peter Thiel was awarded citizenship after spending just 12 days in New Zealand. Photo: AFP
The Times in London suggests rich Americans are turning to New Zealand for sanctuary during the Covid-19 pandemic.
A lecturer in Entrepreneurship and Strategic Management at the University of Otago, Tadhg Ryan-Charleton, said that could be turned to our advantage.
"I do think it's a promising idea because for many new and small businesses, at the very early stages - before you really get to a stage where traditional lenders become part of the conversation - you really are reliant on private capital," he said.
"Private capital is individual business investors or else a venture capital firm - that doesn't exist in this country to the same degree as it does in other areas."
New Zealand entrepreneurs come up with great ideas full of technical know-how but their ideas do not always reach their potential because of the lack of investment capital, he said.
"I do think there will be advantages if we could find a way in the current climate, to perhaps fast-track private capital into these ecosystems.
"But there are drawbacks and there are things to be very aware of. When we are perhaps touting residency or some kind of visa in exchange for capital, we have to be very careful that we're getting the right type of investors."
That would mean encouraging investors who were willing to work with start-ups and small businesses, he said, rather than trying to use their overseas experience as a guide in a New Zealand context.
They would also need a long investment horizon as companies could otherwise feel pushed into accepting the first offer to be bought out.
"We want people who are in this for the good of the businesses that they're investing in and for the good of the founders and the entrepreneurs who will become their partners," he said.
"We don't really want to frame this as a two or three-year investment, as a quick fix or a quick trade for a visa. We do want the right type of people and I think that's important.
"I wouldn't see it myself as visas to the highest bidder - I think we're thinking about what does our economy need at the moment and private capital and support for new and small businesses, it has to be pretty high on that list."
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The co-founder of PayPal, Peter Thiel, was controversially awarded citizenship in 2011 after spending 12 days in the country.
New Zealand has since been linked with other rich foreigners seeking a bolthole from toxic political and environmental crises in their home countries.
The Association for Migration and Investment said New Zealand was already an attractive emigration option, and that had only increased after the country's success in curbing the march of Covid-19.
"The government needs to be seriously looking at attracting investors into this country because we are going to need injection of funds," said its chair June Ranson.
"The prime minister was actually asked about this and she said it was only just buying a passport. It's not just buying a passport, these people and the injection of their money in this country actually helps to create jobs.
"And I think that's just not thinking ahead. New Zealand's going to be a very desirable country. Why don't we want their money? We do.
"I just think we need some bigger thinking."