Thirty-one visa applications from foreign millionaires are under consideration, mostly from North America and Europe. Photo: RNZ / Samuel Rillstone
Immigration lawyers are worried by a dramatic drop in the number of millionaires receiving so-called golden visas.
The visa category gives wealthy investors residence in New Zealand, but was overhauled in July 2022 to encourage direct investment in local companies.
Since then just 20 people have received the Active Investor Plus visas, down from a couple of hundred a year under the previous scheme.
The approved foreign millionaires had invested $17 million in New Zealand by the end of January - half directly in local companies, the rest in managed funds and the sharemarket.
New Zealand Trade and Enterprise said another 31 applications were under consideration, most from North America and Europe.
That was a change from the previous scheme, which attracted mostly Chinese investors. The change in demographics was due in part to stricter English language requirements.
Immigration lawyer Nick Mason said it was a stark drop and New Zealand was missing out on investment.
"There's a massive amount of capital that's not coming into NZ, certainly hundreds of millions if not cracking into the billions."
Immigration lawyer Nick Mason. Photo: Supplied
He said the new investor category was too difficult to navigate.
"If you have investors looking at options they're going to go for an easier option, they're going to go for Canada," he said.
"Once I've explained to them what's involved they've gone cold pretty quickly. It needs to be borne in mind that these people have options and NZ is just one of those."
The Active Plus golden visa opened in September 2022 . Applicants have to invest at least $15m over three years, or $5m if the funds go directly to a New Zealand business.
At the time, the then-Economic Development Minister Stuart Nash said the previous visa categories attracted more than $12 billion over 10 years but much of it was passive investment in shares and bonds.
Marcus Beveridge from Auckland's Queen City Law says the country needed investment, but the tap had been turned off.
"It's basically a massive decline in interest in New Zealand and the rules are seen as too cumbersome and too difficult and having a direct investment of $5 million into New Zealand business is seen as too risky."
Australia shut down its investor visa earlier this year and Beveridge said that could have resulted in more interest in New Zealand.
"It's a real pity because if we'd played our cards right we could have had, not a tsunami, but a large number of entrepreneurs and millionaires coming into the country at a time when we're in a difficult economic situation," he said.
"We can turn that tap on and we can turn it off. If we turn it on we will get a large number of applicants coming through again. Given that China comprised over 90 percent of that market, the question is do we want that again and if so what can we do with that money?"
Most of the wealthy investors now applying for visas are from North America and Europe. Photo: Supplied/AFP
New Zealand Trade and Enterprise general manager of investment Dylan Lawrence said the numbers were actually on track.
He said the scheme aimed for 50 new investors each year, investing about half a billion dollars in the country.
"This is like the emergence of a new billion-dollar fund into the market and for the benefit of NZ businesses. If we're able to replicate that every year to two years then we're going to see a considerable lift in the impact on New Zealand businesses from this visa."
Lawrence said the difference between the current scheme and the previous one was where the money is going.
"It's more complex because we're asking the investors to invest into managed funds, into direct investments, as opposed to just put them in passive vehicles like bonds," he said.
"We're also asking them to have a greater understanding of the English language so that they're able to also provide value and contribute to the businesses that they're investing into."
He said that meant the right investors were being approved.
"We believe New Zealand residency is something that should be cherished and not sold cheaply and we want to bring investors in that align with the values of the country and the intent that we're trying to achieve and help grow economic prosperity for all New Zealanders."
However, Immigration Minister Erica Stanford said the drop in wealthy investors wanting to move here was a concern.
"It's particularly concerning to me that we've had numbers of investors drop off a cliff and we need to get those numbers up again so there'll be some work done around that."
The timing is uncertain for any changes to the investor visa. Stanford has already announced reforms to family visas this term, and changes to the beleaguered Accredited Employer Worker Visa scheme.