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Posted by Myer on July 16, 2021, 1:52 p.m. in Australia
Former president Calvin Coolidge of the United States of America is reported to have said “that the business of America is business.” Well Australia means business too as far as recent changes to the business/investor visa program is concerned.
Earlier this month Australia implemented significant changes to its business migration program raising the eligibility threshold for two of the more popular visas namely the business innovation visa and the business investor visa. The reason why they made the changes was simply because they could.
Australia has an annual quota of 13,500 places under its business innovation and investment program and because of oversubscription on the part of applicants the program usually ends well in advance of the end of the immigration year which occurs on one July.
The government has said that the purpose for the change is to support Australia’s post Covid 19 economic recovery but I think that the majority of changes were made to curb the number of applicants.
The number of business and investment categories has been slashed from nine to four, greatly simplifying the choice of visas available. This blog isn’t meant to be a comprehensive summary of all of the changes but focused on the more significant changes as far as our markets are concerned.
Business innovation visa.
This is a five year provisional business visa for certain types of business people who want to buy or establish businesses in Australia. Once your business in Australia reaches certain thresholds you can then apply for permanent residence.
Essentially you need to prepare a business plan and if a state government sees merit in your business proposal they would sponsor you which is one of the prerequisites in order to apply for this visa.
Prior to 1 July you had to be at least a 30% shareholder of a business with a turnover of at least AU$500,000 in two of the last four financial years and net business and personal assets of AU$800,000. This has increased to an annual turnover of AU$750,000 and net business and personal assets of AU$1.25 million.
Certain criteria have to be satisfied before you can apply for permanent residence namely the business has to have been managed for a period of two years and achieved an annual turnover of at least AU$300,000 before you can apply for permanent residence. You would also have to satisfy two of the following three criteria:
If you can’t achieve this in the first five years you could apply for a two year extension to your provisional visa.
Most of our clients operating in markets with stronger currencies (such as Singapore and Hong Kong) wouldn’t be that affected by the increase in the requirements, it’s going to have a more profound effect on some of the markets with weaker currencies such as South Africa.
If you are looking for a more passive business category perhaps the investor category is for you. This is a five year visa for those prepared to invest money in income producing investments in Australia.
Not just anyone can apply, it’s for certain types of business owners or investors managing an investment of AU$2.5 million willing to invest funds in income producing assets in Australia.
Prior to 1 July you had to invest AU$1.5 million over 4 years, but this amount has now increased to AU$2.5 million, although the good news is that the investment now only needs to be held for the duration of the visa – and it’s possible now to apply for permanent residence after 3 years instead of 4 years.
The range of investments has changed from only state government bonds to now:
This visa also requires state sponsorship and most states want more than just your investment, they want to be satisfied that you will have further business/investment activity in that state. In other words in part they want your investor acumen.
Perhaps one of the most innovative changes to the business visa program relates to the entrepreneur stream. This is a visa for those start-up and innovative entrepreneurs who have been sponsored by state governments to develop their businesses within the sponsoring state. Prior to 1 July you needed to have obtained funding from an approved entity for at least AU$200,000 but this requirement has been abolished from 1 July this year.
You must be undertaking, or proposing to undertake, a complying entrepreneur activity in Australia which will lead to the commercialisation of a product or service in Australia, or the development of an enterprise or busines in Australia.
You can apply for permanent residence based upon the success of your entrepreneurial activities in Australia and before you ask the question let me hasten to add that investments in residential real estate are not a criteria for this type of visa.
The business visa/investor landscape has been greatly simplified by these 1 July changes and we think that they have been introduced to try and improve the profile of applicant. When you have a product as desirable as Australia and there is an oversupply of applicants you don't need the pretext of a post Covid lead recovery to increase prices and that is simply what Australia has done.
The majority of our clients and markets in which we operate are not going to be significantly disadvantaged by these changes, to the contrary it provides a more simple and transparent process of qualifying for permanent residence because of business/investory ability.
Posted by Iain on Jan. 18, 2019, 2:13 p.m. in Australia
D.A.M.A. - the hottest four letters in Australian immigration circles this month. It stands for Designated Area Migration Agreements but it should stand for Dishonest Attempt at Marketing Australia.
With some justification my industry occasionally gets it in the neck from politicians and bureaucrats for misleading marketing, promises made that cannot be delivered and generally shonky behaviour. We have built IMMagine around the simple premise of under promising and over delivering. It works - I’d suggest the State Governments of Australia and the New Zealand Government take a leaf out of the same book.
Now that competition is heating up among the Australian State Governments for an ever diminishing number of skilled migrants (as national politics sees effective cuts to permanent resident visa numbers and restrictions on work visa numbers), we are starting to see big budget marketing campaigns designed to attract migrants. I have no issue with marketing, I take issue with dishonest and misleading marketing.
We have been utterly deluged since the Government of the Northern Territory announced their “We will pay you $15,000 to move to our northern paradise’ (aka the arse end of nowhere).
Potential migrants are emailing us in their scores, especially the desperate of South Africa, asking how they too can move to move to the Northern Territory as it all sounds so easy. ’Someone, somewhere wants us!’. ‘And they will pay!’ ‘Where do we sign up?'
You know the old saying, ‘If it sounds too good to be true, it probably is’? This is a classic case. Just as the ‘white farmers from South Africa’ found out last year when they were all aflutter that the Aussies wanted to help (only) white farmers. Where is that programme to grant refugee status to them now?
While this DAMA programme does present new opportunities for a small number of people with certain skill sets in a limited number of occupations, this is not a permanent residence visa and no individual can directly apply for a work visa under the scheme without a job first.
The DAMA is accessed under the Temporary Skills Shortage (TSS) Visa stream which allows employers in the territory to sponsor overseas workers under this special labour agreement. It simply allows businesses to employ people in skilled and semiskilled occupations that would normally not be available under the TSS.
This then is not a new visa, it presents almost no change to the status quo but is being marketed as some free ticket for anyone with a sweet tooth that wants a tour of Willy Wonka’s chocolate factory.
It isn’t. It is marketing, and misleading marketing at that.
The bottom line is that to be eligible for this visa you must first have an offer of employment in the territory. Good luck with that — in the entire state there is only 250,000 people spread over an area the size of western Europe. They want people for a reason — nothing much happens there and there’s an abundance of wild things which will eat, sting, poison or otherwise kill you. You travel a day over dusty roads to have a cup of coffee with your neighbour. Nice place for a holiday as they say……
If, however, you are lucky enough to be offered a position, the employer will then need to get permission to offer you the job from the Territory Government (bureaucrats, rules, forms, inconsistent decision making, delays). Once (and if) that is approved, you can then proceed to apply for the appropriate temporary Visa and sponsorship (bureaucrats, rules, forms, inconsistent decision making, delays…).
It is not simply a case then of applying to the Northern Territory because your occupation is on their current (short) list. There are quite a few steps that need to be undertaken, not least of all the challenge of finding an employer who is willing to sponsor without the potential worker being in Australia, and not having the appropriate work Visa.
As I have blogged about before getting a job will almost certainly require you to be in Australia, in the State, and actively pursuing jobs and tackling our old chicken and egg ‘no visa no job, but no job no visa’ friend — the employers overwhelmingly won’t be interested in talking to you if you don’t already have PR or work rights.
It is also important to appreciate that this visa is not a permanent residence Visa but rather a temporary work visa to help businesses fill a temporary shortage.
A pathway to permanent residence may also be available, however it will still be dependent on meeting the requirements for PR under some other residence policy. So if you were to pursue this you need to understand that if you get a job, if the employer is allowed to employ you and if you get a work visa you’ll be in Australia for perhaps three years and if you do not qualify under some other residence pathway at that time you will be leaving.
You need to be satisfied that the work visa and that particular occupation presents a pathway to a Permanent residence visa as well and given the Aussies change the rules as often as they change Prime Ministers, I am not sure I’d want to sit in some stinking hot outback town of 250 sweaty malcontents, hoping the Federal Government will let me stay on in three years time.
If you were to take on such risk surely you’d head for one of the States that has people and much more economic activity in it and increase your chances of success, wouldn’t you?
Still, those businesses that do exist in this part of Australia need to be able to operate and some are finding shortages in some occupations so for a tiny minority of people looking for a (radically) different lifestyle, this might work. For the vast majority it is just another cynical marketing exercise with little appreciation that migrants are people, taking risks, and this sorry programme will lead to nothing more than bitterness and disappointment for all parties (including the few people that live in NT who presumably are funding this exercise).
Although we don’t (yet) have regional or state visa pathways for visas in NZ, it is shocking that millions of dollars a year is spent by the New Zealand Immigration Department on marketing this country as a destination. I am constantly emailed ‘complaints’ from migrants who fell for the sweet talk and marketing about skills shortages and needs for this skill and need for that skill who found for reasons I could have told them before they left home, was never going to lead anywhere. Skills shortages and the types of migrants employers will consider are not always closely related. Pitching to millionaires assumes they cannot find us online.
Having Governments marketing to migrants but also acting as visa gatekeepers has always been a clear conflict of interest. One part of the Department says, ‘Come on in the water’s fine’ while the rest are a bunch of hungry circling sharks.
If the Northern Territory is such a fun, vibrant and economically prosperous place, migrants who know how to Google would already have found it.
It’s long since time the Immigration Departments of both NZ and Australia were honest and upfront with people and acting like us - telling potential migrants what they need to know and not what they want to hear.
If something sounds too good to be true, it almost certainly is.
Until next week
Posted by Iain on Oct. 28, 2016, 4:46 p.m. in Immigration
Over the next few months - if not years - there will be some otherwise skilled migrants who won’t be able to achieve the 160 point pass mark even if they were to work for say 12 or 24 months in a job outside of Auckland.
What solutions can we offer them?
I am very conscious that the Skilled Migrant rules will likely change in the middle of 2017, but I am equally confident that here at IMMagine we have a good handle on the direction of those changes, even though we don’t yet know the detail and won’t till the rules are released.
We have a very small number of clients, principally aged over 50 and without any trade or academic qualifications who are still looking for a pathway up this visa ‘mountain’. Without wishing to digress for those tradesmen and artisans under 45 with no formal qualifications we should be able to get them all to NZ using the Australian residence visa process. Something we commonly do now.
One of the ‘NZ direct’ solutions is through a work to residence pathway and finding work and convincing a New Zealand employer to become ‘accredited’ with INZ.
Accreditation is a status given to an employer that allows them to effectively bring in anyone they wish on 30 month ‘Talent Visas' (Work Visas by any other name) without needing to prove they cannot find a local - so long as the salary is at least $55,000 gross per annum, or higher.
No need for it to be in an area of skill shortage, it doesn’t even need to be skilled, but rather INZ needs to be satisfied of a number of key points about the business before they will grant accreditation. The business must be (to quote the policy):
On the face of it this looks quite straight forward but as always, the devil is not only in the detail but the attitude of INZ and the officer processing the accreditation application.
This category was really set up with the aim of assisting larger employers with an ongoing need to bring in talent, rather than for smaller businesses to keep 'one off' but very valuable staff. It does not however exclude the smaller employers like the three man automotive workshop, the bakery or the small IT company. The aim and objective is clear – to make global skills available to ‘trusted’ local businesses – and it is not for INZ to decide which business is ‘better’ than others if the above four criteria are met; nor which applicants or roles come with a greater economic need.
I suspect, however, as more employers now apply for accreditation owing to the tightening of criteria under the Skilled Migrant Category and a seemingly never ending tightening in the availability of local candidates for roles, INZ could try and make it difficult. So, yet again, strong and persuasive advocacy will no doubt be called for and we are well positioned to help companies to secure this status.
For the migrant, their Talent Visa will be granted for 30 months and after two years of working for 'an' (not necessarily ‘the’) accredited employer they can then apply for residence. It is not a points system and there are no quotas nor pass mark. They do, however, have to demonstrate they are still healthy (along with partners and children) and their character remains good. They will also have to prove they earned at least $55,000 by way of salary over the two years. Note: salary, not income.
With the ramping up of pass marks for skilled migrants two weeks ago coupled with the sort of changes we strongly suspect are coming next year, having an Immigration Adviser who is not only expert in the detail but creative in arguing some very vague sounding criteria is going to take on even more importance than it ever has.
From here on under the skilled migrant category, it is not only a case of the survival of the most employable but it might just also be the survival of those with the smartest Immigration Adviser.
Work to residence options are no different. I am expecting push back from INZ on these applications but the rules are the rules and whether the company is large or small or needs to bring in ten workers or one; it is not a value judgement for officials.
Finding alternative pathways up this seeming every higher and steep mountain is what we do very well with 26 plus years’ experience under our belts.
Work to residence on a Talent Visa is just one of those strategies that might be the difference between raising your children in New Zealand or somewhere else.
Until next week.
Letters from New Zealand
Posted by Paul on Dec. 20, 2013, 9:38 a.m. in Immigration
When all through the house, not a creature was stirring..., except for a Government policy maker who decided that changing the rules at the end of the year would make a lovely Christmas present.
Late last week the Minister of Immigration released a statement relating to proposed changes to the Long Term Business Visa (LTBV) Category. Whilst the announcement didn’t reveal specifics over what the new policy would look like, it made a few references to the ideas being batted around inside the immigration halls of power.
Originally established as a pathway to residency for those who wished to come to New Zealand and become financially self sustaining, applicants were required to have a well researched business plan that met a fairly clear benefit test to the country. In hindsight that benefit test was set too low in the eyes of the Departmental officials who implement the policy.
When it was released it was a case of ‘anything goes’ and applications from Bed and Breakfasts to one man band lawn-mowing franchises were being approved in a matter of weeks. Then with a change in leadership came a change in interpretation (although the policy didn’t) and applications were declined en masse. This Category has always been subject to the ever changing mood of INZ, although none of those changes was ever set down in the rules. It was a case of getting to understand each new Branch Manager’s feelings on the benefit to New Zealand before advising your client on whether to proceed or not.
This has led to a policy that is both poorly understood by applicants and immigration officers alike and open to widespread abuse by both applicants and the Department. Often seen as the ‘application of last resort’, INZ struggled with the ebb and flow of applications of questionable benefit to New Zealand, leading to very few residence approvals.
The current (to be no longer as of the end of today) policy sees around 500 applications annually which is quite a few considering the intent of the policy is for people to establish or purchase businesses in New Zealand.
Application volumes have been steadily increasing over the last three immigration years (2010 to 2013), although approval rates have been falling from 89% at the beginning of that period down to 71% in the current year to date. There are various reasons INZ attribute to this trend, some of which don’t appear to hold a lot of water, given they created and administer the policy; but the main thrust of the changes relates to what we have always argued is a clear lack of defined aim of the policy.
Let me give you a few examples.
Part of the existing policy requires an applicant to have sufficient funds for maintenance and accommodation – and that’s about as far as the rule book goes in terms of specifying what that figure might be. It doesn’t give a guide as to the amount of money required and so its left up to an immigration officer to decide on what they believe is appropriate. The problem with that is each officer will have a different view on what is ‘sufficient’. Some might drive a BMW and scoff at the idea on living on anything less than $100,000.00 per year (or perhaps $150,000 a year which was a figure quoted to us by INZ recently). Other officers will live with more modest means and believe that a third of that is required.
Then there is the definition of ‘benefit to New Zealand’ which is another criteria that INZ uses to determine if a proposed business is worthy of approval. There is a list of criteria within the rule book; however it was arguably poorly written and therefore open to various interpretations. Also where policy says ‘benefit’ can be satisfied by meeting one of the criteria (such as employing a single New Zealander), INZ recently decided what the policy actually meant was if only one person is being employed they will do a ‘measuring’ exercise to determine whether there is enough weight in the other elements of ‘benefit’ to grant an approval.
That of course is not that the policy suggests at all but this was the Department’s way of dealing to what they considered ‘low quality’ applications – even those that demonstrably met their own single benefit criteria.
So, out with the old and in with the new – but what is ‘the new’?
Before we dive into this, it is important to note that anyone who has a current LTBV in process will be covered by the existing rules and so the proposed changes only impact on those who have yet to lodge a formal application. That does mean ongoing uncertainty as we doubt INZ will be able to resist trying to implement a higher bar test of benefit to LTBV renewals at nine months and the Resident Visa that follows.
In terms of the new policy - put simply INZ is returning to form, trying to cut out as much thinking as they can and putting in place a points system which measures various criteria. The Government has decided to close the current policy down today, release the details of the new policy in February 2014 (date to be determined) and then actually make it effective from March 2014. This then gives INZ and, in particular the Business Migration Branch, a chance to play catch up.
What little we do know is that the policy will utilise a points system to allow applicants to gauge for themselves the likelihood of success and hopefully provide some clarity around the actual criteria.
Points will very likely be allocated based on age, capital investment, level of turnover, business experience, job creation and the level of innovation (not sure how you measure that). There will be a total point’s score of 120 (proposed) and INZ will obviously be balancing age, investment capital and the kind of business to approve the most desirable applications. The focus has very much gone on targeting enterprises that will provide export opportunities and/or technological innovation. Essentially what they don’t want are B&B’s and corner dairies.
There will also be a focus on pushing businesses out to the regions and awarding additional “bonus” points to applicants who propose to establish a business anywhere outside of Auckland. Similar to the Skilled Migrant Category, INZ has always endeavoured to move migrants out of Auckland and in to the smaller parts of the country to stimulate growth.
The Minister sums up his intention of the new policy in the press release as follows:
“The Entrepreneur Work Visa will operate under a new points-based system that will result in higher quality, more productive businesses.
“It will also encourage business-savvy migrants to invest, settle, and create jobs across the country, by offering extra points for expanding or starting businesses outside of the Auckland region.”
But (and there always is a whole lot of these) INZ will also have the discretion to waive certain requirements for funds where the proposed business can ‘excel’ in other areas. So basically you have a set of rules and then another rule which allows an officer to do whatever he/she likes. Let’s hope it isn’t quite as subjective as that.
We support any move to greater transparency that leads to both a higher success rate and a better outcome for New Zealand. Based on the information publicly released so far we question why it has taken INZ so long to work this out and whether or not they have done enough to fix the issues. Time will tell of course.
For anyone who is considering a Long Term Business Visa application stay tuned. We will be sending out the details as we receive them along with our interpretation of what they mean in the real world.
And with that the Southern Man and the IMMagine New Zealand team sign off for another year. It has been an interesting one to say the least as the New Zealand economy continues to outperform its developed country peers and surges into 2014, the Auckland Council debates whether to kick out the current Mayor who has a penchant for extra marital activities and the folks in Christchurch continue to restack the bricks and mortar.
We will be back in January (officially open on the 13th) with a new round of seminars kicking off in the same month – this time featuring for the first time Jakarta followed later by Hong Kong.
To all of our clients and those who have read and enjoyed our blogs in 2013 we wish you a very Merry Christmas and a Happy New Year. We look forward to working with you again in 2014 and hope you all enjoy the festive season (no matter where in the world you are).
For now we are off to the beach as summer settles into a warm dry pattern.
Adieu, Arrivederci, Totsiens, Salamat Jalan and Hasta La Vista…
Paul Janssen, Iain MacLeod and the Team at IMMagine New Zealand
Posted by Iain on Aug. 3, 2013, 12:55 p.m. in Immigration
The Japanese have two words which neatly survive translation from a description of their culture to our immigration process – ‘tatemae’ - the way things appear and ‘honne’ - the way things really are.
A shame we don’t have single words in English to describe these concepts because nothing sums up the reason we immigration advisers exist than these two concepts. While it is a cultural description I always counsel potential migrants that what the immigration rules appear to mean to them and what they mean to an immigration officer can often be two entirely different things. This partly explains why decline rates for visas are so high under a number of categories.
Ultimately the process of obtaining a visa, be it temporary or permanent is, like all legal processes, a word game. A serious word puzzle in which a poorly or incorrectly chosen written word on a visa application form, in supporting evidence or spoken in a telephone conversation with an immigration officer can be the difference between an application being successful and an application failing.
In this business ‘failure’ brings with it altered destinies of entire families and children not yet born.
The best example of Honne and Tatemae in the immigration context is illustrated by the recent release of an Internal Circular by the Immigration Department relating to the Entrepreneur and Long term Business Visa policies.
This circular stated that to get a residence visa as an Entrepreneur the business the migrant establishes, buys into or buys outright must now be of ‘significant benefit’ to New Zealand. Prior to this circular the word significant did not appear in policy. The business simply had to ‘benefit’ New Zealand.
That would indicate a higher threshold to get the Entrepreneur residence visa don’t you think?
We asked the Department Officials charged with ‘operationalising’ policy (and changes to policy) if our understanding that adding the word ‘significant’ suggested both a change in the policy and a higher threshold for success was correct.
They quickly sought to reassure us that there was no intent to alter the policy aim or intent and the circular sought only to fine tune existing definitions of ‘benefit’ criteria. We should think of them as ‘clarifications.’
Definitions of what constituted ‘benefit’ have always been, in no particular order and not forming an exclusive list, as follows:
o Revitalising an existing business through input of capital
o Introducing to the NZ market a new product, service or technology
o Creating a new export opportunity/market
o Creating a new job for a New Zealander that did not previously exist
It is true that the information circular that announced did modify a few of the definitions outlined above – but not to any great degree. I accept those as ‘clarifications’ even though a clarification is in itself change if the original criteria was open to multiple interpretations and is now being interpreted in a different way. As is our experience with this category of visa – different officers have always had a different take on many of the criteria making outcomes often relatively subjective.
Our disquiet over the appearance of the ‘s’ word was compounded because in recent months we have experienced first hand a narrowing of the interpretations of the criteria by the Business Migration Branch (BMB) officials who processes these applications. The threshold for success appeared to be changing. They have been quite open about it – they have for some time bemoaned the fact they felt compelled to approve ‘low quality’ applications. Goodness knows why, in our experience they have never shied away from interpreting the rules as it suits seemingly to give them the outcomes they wanted, irrespective of what the aim and intent of policy was.
Words are simply not added or subtracted from rules for no good reason.
If something has to be of benefit to New Zealand that suggests it must advantage the economy in some way. A ‘significant benefit’ must surely be a greater advantage, a raising of the standard that measures the benefit. Otherwise why insert the word significant?
Our fear (shared by many other Advisers) is that that one nine letter word gives these bureaucrats a sledgehammer to deal with those businesses they do not think offer the economy much – up to three years after the business was established (this rule is retrospective).
What we have in writing however from officials in the operations side of the Department is no one has anything to fear – the bar has not been raised, the aim and intent of the policy remains intact. When they say no one has anything to fear why do we feel like grabbing the life vests and launching the lifeboats?
Maybe ‘Operations’ genuinely thinks it is just a clarification. Maybe they were told to say that. Maybe unlike us they don’t deal with BMB all the time. We have seen what BMB does. We know how the current crop of officers think and this policy has been hijacked by overzealous officials in the past intent on putting their own stamp on the rules originally designed to do no more than to allow applicants a shot at financial independence in New Zealand.
Of course the word ‘significant’ means the bar has just been raised and raised a lot. Or INZ should take it out of the rule book (or explain why it is in the rule book).
So if you are in New Zealand on a Long Term Business Visa or looking to file one be very careful. Assume, irrespective of what we have been told this week that things have only been ‘clarified’, that in reality the bar has just been raised.
And raised significantly.
Remember in this game things are seldom what they at first appear.
Until next week
Iain MacLeod - Southern Man
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