ENTREPRENEUR WORK VISA AND ENTREPRENEUR RESIDENCE VISA Comments

ENTREPRENEUR WORK VISA AND ENTREPRENEUR RESIDENCE VISA: Comments on the recent changes Marcus Beveridge, Principal, Queen City Law Bradley So, Lawyer, Queen City Law 1

OVERVIEW Topics • Entrepreneur Work Visa BB 3. 10 - Point System - Business Experience - Employment - Approved Export - Unique and New - Capital Investment - Bonus Points BB 3. 15 – Requirement for a Business Plan BB 5 – Changing a Business Proposal • Entrepreneur Residence Visa - BH 2. 1 – Successful Establishment - BH 4. 10 – Trading Profitably as per BH 6. 1. 40 - Existing LTBV – Grand parenting 2

ENTREPRENEUR WORK VISA BB 3. 10 – POINTS SCALE • Minimum score of 120 (is not Expression of Interest) BUSINESS EXPERIENCE • One Category • Not essential to claim but will need to show (Not Recommended): • BB 3. 1 (h) – Sufficient business experience? Transferrable Skills? • Linkages in NZ – Business Mentors/Incubators e. g ICEHOUSE, Spark. Box etc. . • “Buying Experience” - what is the applicant’s role? 3

ENTREPRNEUR WORK VISA NEW FULL-TIME EMPLOYMENT • At least 30 hours • When do I have to employ? At what period? First year? Second Year? Final Year? • TEST: Comply with your proposed Business Plan APPROVED EXPORT BUSINESSES (BASED ON ANNUAL TURNOVER) • What is the basis to claim the turnover? Is this based on the First year, Second Year, Third year of the Projection. • THE TEST IS: “ANNUAL” - COMMON DENOMINATOR (“CD”) Year 1: 200 K CD 200 K Year 2: 400 K 200 K Year 3: 600 K 200 K 4

ENTREPRENEUR WORK VISA UNIQUE OR NEW PRODUCTS OR SERVICES BH 6. 1. 30 • New – “Significant Enhancement” • Unique – “Only product or service” – What is the Unique Selling Point? CAPITAL INVESTMENT • Minimum of $100, 000 (No points) to claim points at least $200, 000 • BB 3. 5. 1 – Waiver only applies to: • • BB 6. 1. 55 - ICT • BB 6. 1. 60 - High Value Export (5 new jobs plus $500, 000 turnover) • BB 6. 1. 70 – Innovation BB 6. 1. 50 - What is working capital? TEST: If it is an expense then it is working capital? If you can amortize or depreciate then this is Capital Investment 5

ENTREPRENEUR WORK VISA BONUS POINTS • BB 6. 1. 35 – Outside of Auckland • Where is the headquarters of business located? • Where are the job created? • Where is the commercial activity? • Local Agency Support: • A grant or subsidy to develop the business • Must be measurable and tangible – a letter of support is not sufficient. • NOTE: Agencies are not obliged to give support 6

SPECIFIC BUSINESS PLAN AS BB 3. 15 • Be Specific • What is the business? • Where is the business? • When do you intend to operate the business? • Why do you choose this business? • Format • Follow the format as per the application form • Itemise breakdown the allocation of investment capital/working capital • Forecast – What are the assumption? • Differentiate between New or Existing business 7

SPECIFIC BUSINESS PLAN FACTORS TO CONSIDER • TYPE OF BUSINESS • Consistent with the Objectives of BB 1 • High growth • Innovative • Export • • New/Existing Business CAPITAL REQUIREMENT • Existing Business • Share Acquisition/Asset Acquisition • LOCATION • In Auckland or outside of Auckland 8

SPECIFIC BUSINESS PLAN Practical Implications • Offshore applicants will need to come to NZ before a visa is granted • Interim visa of 12 months is purely to set up the business • One variation of business plan opportunities • Decrease in buying existing businesses • Pro forma business plans will no longer apply • Applicants are better prepared for Residency 9

ENTREPRENEUR RESIDENC CAPITAL VISA BH 2. 1 SUCCESSFULLY ESTABLISHING A BUSINESS • TWO YEARS • SIX MONTHS – subject to S 49 Conditions maintain $500 k and three jobs created BH 4. 10 BENEFITING TO NZ Benefits • Promoted New Zealand’s economic growth as set out in a) i - vi, such as by creating employment or introducing new, or enhancing existing, products or services, spill-over • Productivity-enhancing spillover benefits • Increase Capacity Utilisation (such as significant new job creation) Trading profitably • BB 6. 1. 40 – meeting or exceeding the projected annual turnover from the original business plan and assessment from the points scale; • Making sufficient profit = minimum wage per annum 10

ENTREPRENEUR RESIDENCE VISA GRANDPARENTING • TEST: Did you comply with your business plan? WHAT IF I DON”T MEET THE FORECAST OR THE BENEFITS CLAIMED? • The applicant can apply for extension on the EWV provided that they can show that the business has potential to meet the forecast. • BH 3. 1 (a)(iv) – may be triggered “The business has provided a significant benefit to New Zealand or greater than the original business as determined by a business immigration specialist” 11

CONCLUSION REMEMBER – BEFORE SUBMITTING AN APPLICATION • BE CONSERVATIVE WHEN CLAIMING POINTS • JUSTIFY YOUR ASSUMPTIONS • WORK ON THE BUSINESS PLAN • DO NOT APPLY FOR RESIDENCE PREMATURELY • ENSURE CONSISTENCY WITH BB 1 12