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Posts with tag: Long Term Business Visa

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What does 2014 hold for NZ?

Posted by Iain on Jan. 17, 2014, 11:43 a.m. in New Zealand Economy

Happy New Year to all our regular Southern Man Letters from New Zealand readers.

The team is back in the office, tanned and relaxed (that lasted about two days!) and looking forward to an extra busy year. For us it is going to be a year of firsts – we are now dipping our toes in the Hong Kong and Indonesian markets. Across the Tasman Sea our Australian colleagues are heading to Botswana, Greece and Turkey to test the migrant waters there.

And what of New Zealand in 2014? How are the tea leaves looking?

If you can believe the various surveyors and economic forecasters we are in for a very good year and several beyond this. A few key points in recently released surveys show:

  • Business confidence is at a 20 year high
  • All sectors of the economy are growing – manufacturing, agriculture, services and tourism are all showing strong growth
  • All regions of New Zealand are in positive growth and confidence territory (spreading out from Auckland and Christchurch which dominated 2013)
  • ‘Own business’ confidence is running at multi year highs and this suggests GDP growth of at least 3.5% this year
  • Retail sales through Christmas were up 7% on the year before and have continued through the early part of January
  • Skills shortages are starting to bite (told you!!!!) - especially in the construction and IT sectors – everyone from Architects, Civil Engineers, Quantity Surveyors and Planners through to related trades workers. In ICT some are now calling the shortages ‘dire’ which might be a slight exaggeration but these shortages are going to be biting across most sectors within the next six months in my view .
  • Unemployment which currently stands at 6.2% is predicted to fall to 5.5% by years end and 4.5% by the end of 2015. It is worth noting that once unemployment gets down to 5% in New Zealand you’ll not be able to find a Secretary to do your word processing……or find someone to make you a cup of coffee. It is also worth reminding readers that skilled migrants seldom compete with the unemployed 6.2% - they tend to be un-skilled or semi-skilled.
  • Inflation is expected to remain subdued overall at around 1% but dog with rabies crazy in housing. There continues to be a chronic shortage of new housing supply meaning house values  are expected to continue their seemingly relentless increase by around 10% this year (higher in Auckland and Christchurch). This is feeding through into higher rental prices also.
  • Interest rates are predicted to increase by 25 base points each quarter for the next 5 quarters (starting March). The word is the economy is robust enough with exports booming even with a high exchange rate to offset any inflationary build up. I’d be expecting floating mortgage rates to be around 6.5% - 7% by years end.

Short of any major external shocks things are looking overwhelmingly positive. No one is talking about an overheating economy or boom times but there is a real and broad based momentum that has been building across all sectors and all regions.

This, I suspect, will embolden the New Zealand Government to continue with high skilled migrant pass marks and forcing a majority (note, not all….) of would be migrants to come and find jobs in order to have certainty of residency approval.

Those employers unwilling to recruit form the ranks of those offshore or who refuse to travel overseas to interview and recruit are within the next few months going to be staring into a very shallow pool of local talent. This will have an upward movement on incomes (we are already seeing it in construction and IT in particular).

While no one who reads this who thinks they may make a move this year should take getting work for granted, there is no doubt that 2014 for the vast majority of you will be a year of greater employment opportunities. Through 2013 we saw average times for most clients to find jobs here get down to a few weeks rather than a few months as it was through 2011-2012. If you are fluent in English, skilled, do your research on demand in the labour market for your skills set and are willing to get on a plane and get here, chances are you’ll find work within 4-6 weeks.

As we reported in December the Government has closed the Long Term Business Visa or self-employed pathway to residence while they think about a new ‘improved’ visa class for Entrepreneurs which they hope to launch in April. We have been offered an outline of the new criteria which we have agreed will remain confidential but what we can say without breaking those confidences is that the new criteria is less a pathway for the self-employed to demonstrate financial self-sufficiency to a move to focus on greater job creation and export related businesses as priority for approval. For the first time the amount of funds invested comes with a minimum and the more invested the higher the chances of success. In essence what we will gain is effectively a new sub-class of Investor – lower investment thresholds than those who apply to many looking to secure residence under the Investor Categories but a much higher threshold than historically in place for the self-employed. As always there will be winners and there will be losers.

Skilled Migrant Category also underwent its standard three year review during 2013 and I expect we may see changes this year. My own view is the changes will be minor (why change a formula that appears to be working?). My only two suggestions to Government were that we should be more prescriptive in regard to English language as the Australians are (better your English the higher your points) and I would also be re-instating points for those with capital they can transfer to New Zealand. Although it is proven that those with more money find it easier to settle I cannot see the Government taking me up on this suggestion; they might on the English language however. We shall see.

I head overseas today for the first round of seminars for 2014 and will be in Singapore this weekend, Jakarta next weekend and Kuala Lumpur the following. The seminar in Jakarta is now fully booked.

My colleague Paul will also be in South Africa in early February kicking for our first round of seminars there.

It is going to be a big, exciting and nerve wracking year for some of you as you pack up and join us here in New Zealand. For some 2013 was the moving year and 2014 will become the year of return to some sort of normality. For others 2014 will be the year of the ‘big decision’ to migrate or not. Wherever you are on that spectrum the Immagine team and I wish you every happiness and success for the year.

Until next week

Iain MacLeod

Southern Man – Letter from New Zealand

When Is Significant Really Significant?

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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