Doing Business with China

New Zealand Investor Visa includes residential real estate

Immigration New Zealand has made a smart move to discourage applicants from placing investments entirely in bonds. From 22 May 2017,  where 50% of the investor visa funds are invested in “growth oriented” investments, the amount that is required for the Investor 2 visa is discounted by NZD 500,000.

With similar climates, wide-open spaces, good schooling and a strong economy, like Australian, New Zealand is an attractive destination for migration and is already popular in China.

Investor 1 (Plus) Category – 3 years

This investor visa is NZD 10 M. Where 25% is invested in “growth oriented” investments the physical presence requirement of 88 days will now be spread over 3 years, rather than 44 days each in years 2 and 3.

Investor 2 Category – 4 years

This investor visa is now NZD 3M up from NZD 1.5M which also required NZD 1.0M of settlement funds. Under the new rules only NZD 2.5M will be required where 50% is invested in “growth oriented” investments. The physical presence requirement of 438 days to be spread over the 4 year term rather than 146 days in years 2,3 and 4.

Note there is a limit on the number of these visas of 400, increased from 300. There is also a softer “business experience” definition of 3 years, although English language skills are required and applicants must be under age 65.

Acceptable Investments

  • Growth oriented investments – New Zealand shares unlisted or listed either directly or through managed funds, and new residential property developments designed for commercial return, not personal use
  • Non-growth oriented investments – New Zealand Government and corporate bonds including banking and financial firms, and philanthropy to a maximum of 15%.

New Zealand Citizenship

Once the visa has been granted the pathway to permanent residency is just one year. Further, the opportunity to include investment in certain “off-the-plan” property will be well received by those who prefer investing in real estate and want to have a home for the family or children studying at the end of the four-year visa term.

For those who are weighing up the options, the NZ Investor 2 being equivalent to AUD 2.2M is less than half the amount of Australia’s AUD 5M Significant Investor Visa.

Stacey Martin is the founder of Expat Advisors Community, a network for professionals with internationally connected clients. With a background in financial services, today Stacey consults on investor migration managing relationships between Asia, in particular, China, Vietnam and India and Australia and New Zealand. She is the author of Smooth Road to Travel: China to Australia”.

For more information contact Stacey Martin via help@migrationalliance.com.au or call +61 (0) 413 127 677.

Aus-China business: now to the how!

We have all been hearing about Why China and the scale of the opportunities which are massive. But how can you navigate the market and be confident there is demand for your project or service, ensure marketing is tailored to the culture and importantly get the right introductions to support your business growth objectives.
Expat Advisors Community

We are a group of professionals that serve international clients, predominantly from Asia. Contact us for to be part of our network, for relevant business introductions or attend our own and partner forums including the annual Asian Financial Forum delegation. www.expatadvisorscommunity.com.au

Significant Investor Visa (SIV) – Consulting and Concierge services

Since the changes to the investment framework for this inbound migration program, it is even more important that potential applicants, the majority from China, get the right advice from the right professional at the right time.

We welcome potential applicants and migration agents to contact us to see how we can support you throughout the journey and for product and solution providers to ensure they have an appropriate proposition to serve this market. www.sivconsultant.com.au

Business Connections and Support Services 

Expat Advisors Community works with a number of trusted partners. and subjects to your needs and objectives can provide shortcut by arranging appropriate introductions. These currently include:

Dearin & Associates: International Business Accelerator course – details here. 

Farms and Finance: connecting Australian agriculture with Chinese capital – details here.

Australian Services Roundtable: SME mentoring for internationalisation – details here.

BasisPoint: SIV events and China market intelligence.

More on our range of Aus-China Business and Consulting services here.

Buying property in Australia – what overseas investors need to know

Australia is an attractive market for foreign investors, particularly when in comes to owning property including land. However, with escalating property prices in Sydney and Melbourne, the Australian and State Governments have made it more restrictive for foreign residents to purchase residential property in Australia. 

In this article, Ben Weeding from Buyside buyers agency outlines what investors can currently do when it comes to purchasing properties in Australia.

Residential Real Estate

As a general rule, foreigners are restricted to purchasing:

  1. New or “off-the plan” residential property which has been approved by the Foreign Investment Review Board (FIRB)
  2. Vacant land with the intention of building a property within four years, also requiring FIRB approval which costs a minimum of $5,000 depending on the value.

Foreign buyers are also subject to additional fees on top of what residents pay which includes state stamp duty (NSW 4%, Victoria 7%, Queensland 3%) and a land tax surcharge (NSW 0.75%, Victoria 1.5%).

Recent changes – in the May 2017 Federal  budget, a number of additional measures have been introduced which will apply to foreign investors:

  • any capital gains are fully taxable (residents receive a 50% discount on the assessable amount
  • CGT withholding tax will increase from 10% to 12.5%
  • developments will be limited to 50% foreign investors
  • where properties remain vacant for more than six months, and $5,000 fee will apply
Commercial Property

Australian commercial property investment has become an attractive alternative for foreign investors with the with a strong business environment, higher rental returns and fewer restrictions.

Purchases can be made up to $252M without FIRB approval, although where the proposed acquisition is considered to be sensitive the threshold is $55M.

For countries where Australia has a Free Trade Agreement (FTA), the threshold is $1,094 million regardless of whether the land is considered sensitive. Current FTA countries include New Zealand, Canada, Chile, Korea, Japan, Thailand, Malaysia, Singapore and the US.

Agricultural Land

This is land that can be used for primary production and all proposed investments by foreigners must be notified to the Australian Taxation Office Register of Foreign Ownership. Approval is required where the cumulative value exceeds $15 million, again except FTA partners.

For more information or assistance with purchasing Australian property contact Ben Weeding – details here. 

Is FIRB approval required to purchase an Australian farm?

Australia has a vast amount of land and whilst not all is suitable for farming has become attractive to foreign investors particularly with the need for increased production with global population growth. 
Agriculture business

Proposed direct interests in an agribusiness generally require Foreign Investment Review Board Approval (FIRB) where the value of the investment is more than $55 million.

However, where the purchaser is from a country where Australia holds a Free Trade Agreement (FTA) there is no limit. Current FTA countries include New Zealand, Canada, Chilie, Korea, Japan, Thailand, Malaysia, Singapore and the US.

Agricultural businesses include forestry and fishing as well as processing for meat, poultry, seafood, dairy, fruits and vegetables, grains and sugar.

Agricultural land

This is land that can be used for a primary production business.

All proposed investments in agricultural land by foreigners must be notified to the Australian Taxation Office Register of Foreign Ownership. Approval is required where the cumulative value exceeds $15 million, again except FTA partners.

For further guidance go to the government websites Agricultural land investment and Agribusiness Investments.

NZ Investor Visa program to include residential real estate

In June 2016 Australia changed the investment migration program to include venture capital to direct funds into areas which needed access to capital. Our friends across the ditch are also looking to have investments directed into growth assets rather than government bonds with final changes to their investment migration program due to be announced on 22 May 2017.

Australia’s investor visas are set at AUD 5M for the Significant Investor Visa (SIV) and AUD 15M for the Premium Investor Visa (PIV). New Zealand has an NZD 10 M Investor Plus program and are set to double the NZD 1.5M Investor program, but will give a reduction to NZD 2.5M (AUD 2.2M) to those that elect to invest half in growth assets.

The Australia program is very prescriptive in the management of the underlying assets within tight constraints, while in New Zealand complying investments can be in NZ shares either held directly or via a managed fund as well as NZ debt securities, and venture capital.  In addition to commercial property, new residential real estate developments which meet the parameters of the NZ Immigration program can also be used as part of the growth asset component.

Bear in mind the Investor 2 visa, unlike Investor Plus does have an age limit of 65, English language requirement, and requires more days to be spent in New Zealand  but the granting of NZ citizenship has been reduced to just one year after the 4 years holding period to permanent residency (3 years for Investor Plus).

With strong economic growth, a safe environment and clean air and good education system, New Zealand is understandably popular with those seeking a relaxed lifestyle for their families.

For a summary of the current and proposed NZ Investor Visa rules check out the comparison document: Investor Factsheet interim for use prior to May 2017.

For more information on investment migration to Australia and New Zealand contact Stacey Martin, Founder of Expat Advisors Community here.