Yun Jessica Meng, Licensed Immigration Adviser at IMME Limited, shares her opinion on QDII buyers as the economy calls for visa procession to be done efficiently.
Since COVID-19, New Zealand has become a destination of high-net-worth individuals and ultra-high-net-worth individuals all over the world. They want to come and build sustainable businesses here. The problem here is how to set the policy to balance the risks of virus and the recovery of our economy.
Current Policy
At present, all offshore applications for Investor Category are on hold, process-but-not-approval, due to the border ban. The underlying logic of this policy is that they are unlikely to meet the current entry requirements, which is correct.
Special Cases
However, some Investor applicants do not need to travel to New Zealand to open their bank accounts in order to transfer their nominated funds at all. For example, most Chinese applications whose funds are based in mainland China, will use Qualified Domestic Institutional Investor (QDII) as their acceptable investment.
These applicants do not need to open a personal bank account in New Zealand after Approval In Principle (AIP). They will only to travel to NZ after the S49 Resident Visa is granted.
Benefits for New Zealand
If these applications can get the AIP without being on hold, they can invest via QDII immediately. Therefore, New Zealand will get the valuable investment quicker and their investment period will be counted earlier. It is a win-win situation.
Statistical Data
There are only 6.17% of principal applicants in Investor Plus, and 13.04% of principal applicants in Investor Category are onshore at the end of Sep, which means that only a relatively small number of applications will be assigned to a CO in the foresee future. As the border ban restriction goes on, this percentage will be even smaller right now, in my way of thinking.
If we bear in mind that INZ’s historical data shows that two third of the Investor Category applications were from mainland China in the last ten years, we could tell that a great amount of investment could be used to promote economic recovery, if these QDII potential buyers could get their AIP in a timely manner.
Solutions
In order to process the applications, a commitment from the applicants will be necessary, declaring they will only use the QDII as investment (in fact, there are few options to transfer the nominated funds to qualify INZ’s requirement).
INZ could even hold the assessment of the evidence of investment when they finish the transfer, and suspend the S49 RV if the border ban is still not lifted. Therefore, there will be no new time frame for these applications after AIP, which means no new problem will be created by this policy.
Growth of Funds
A report from an industry association, NZAIP, states that, while INZ is receiving a record number of Investor applications, there are only two Immigration Officers to process the on-shore applications.
As there continues to be a steady stream of investments and the nominated funds are usually invested on low yield financial products during the assessment, some applicants may change their minds if their applications could not be sorted out in a timely manner. They may invest in other places besides New Zealand.
If this is the case, it would be not so clever to say ‘to be granted residence in New Zealand is a privilege, not a right’.
Kiwis’ Wish
In the middle of the second lockdown, when I sent a parcel to Business Immigration, a young lady in NZ post told me that it was the priority to deliver as it was an investment application. It seems that Kiwis know that we need more investment applications and more investment funds ASAP.
About the author:
Yun (Jessica) Meng
LICENSED IMMIGRATION ADVISER / ARBITRATOR (Xiamen Arbitration Commission)
GDNZIA (Toi Ohomai), LLM (Xiamen Uni), LLB (Cupl)
Focus on New Zealand Investor Category visas, serving clients including the founder families of companies listed in Major Global Stock Markets, such as Nasdaq in the United States, A-share market in Mainland China and ASX share market in Australia.
Connect with Yun here: http://www.immegrationz.com/index.php/contact/
