There have been some new residence criteria introduced by Immigration New Zealand which may impact on Long Term Business Visa (LTBV) holders.
Where there has been a change in policy, immigration have previously allowed applicants on a pathway to residence not to be disadvantaged by new policy. With the present changes, Immigration New Zealand have specifically noted in the instructions that current LTBV holders will have to meet new residence criteria.
The result of the change in policy is that some LTBV holders will not be able to meet a benefit test at the residence visa stage. If an LTBV holder does not meet the benefit test at the residence visa stage the application for residence will be declined.
Broadly, the key points to note for residence are that as at the date the application for residence is lodged evidence will need to be provided to Immigration New Zealand that:
- The business has been performing as outlined in the business plan;
- The business has been operating for at least 2 years;
- The principal applicant has been self-employed in the business for at least 2 years;
- The business must be “significantly” benefiting New Zealand (see below); and
- The business must be trading profitably on the date the application for residence is lodged or a business immigration specialist is satisfied that it clearly has the potential to become profitable within the following 12 months (see below).
Significantly benefiting NZ
The benchmark to satisfy the benefit test at the residence visa stage has been raised higher than previously. One of the ways this test can be met is if at least 1 new full time position (at least 30 hours per week) for a New Zealand resident or citizen has been created. The employment test excludes contract/casual roles.
Must be trading profitably at the time application made
The definition of trading profitably under the immigration instructions is that:
- The business has met or exceeded the projected annual turnover from the original business plan; and
- The business is making sufficient profit to enable the principal applicant to pay him or herself at least the minimum wage per annum.
As the minimum wage increased to $14.25 per hour from 1 April 2014 this would mean that based on a 30 hour per week the business must be generating enough profit to pay the principal applicant an annual salary of at least $22,230.
Action Points
If you are an LTBV holder we recommend a review of your circumstances and business operations now to establish whether the forecasts as set out in your original business plan will be met and whether the new criteria for residence will be met within the currency of your existing visa.
An application for residence is likely to take approximately 6-9 months for Immigration New Zealand to process under the entrepreneur residence category.
If you are concerned that you may not meet the new criteria for residence we recommend giving early consideration as to whether alternative pathways to residence may be available to you within the currency of your existing visa.