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Operating a Business in New Zealand - The Long Term Business Visa

Wednesday, September 11, 2013

This article was prepared in May 2013. It is intended as general information and not specific legal advice. If you want legal advice about a problem, you can contact the author below.

Introduction

If you are not a New Zealand resident or citizen, the Long Term Business Visa ("LTBV") will in most cases be your only allow you to work as an employee but not to be self-employed.

Other work visa, such as the Essential Skills Work Visa or Specific Purpose Work Visa only allow you to work as an employee but not to be self-employed.

How long is the LTBV valid for?

Initially nine months to allow you to transfer money and establish your proposed business in New Zealand.  Once you have done that, a 27 month visa will be granted to you to allow you to operate your business.

Are there any English language requirements?

Yes.  You must show that you meet the minimum standards of English by submitting with your application any of the following:

  • Overall IELTS Band Score of 4.0; or
  • English Speaking Background; or
  • Any other evidence that demonstrates English language ability (eg tertiary qualifications in an English speaking country).
Do I get NZ permanent residence somewhere down the line?

Potentially yes.

After being self-employed for two years, and provided that your business is trading profitably, you would be eligible to apply for residence under the Entrepreneur category.

Can I purchase or establish any business I want?

There is no restriction on the type of business you can establish or operate in order to be approved a visa under the LTBV category.  However, you must have business experience relevant to your business proposal.  This is very important.

How do I know if my business experience is relevant to my business proposal?

There is no definitive guideline for assessing relevancy.  The assessment by Immigration New Zealand ("INZ") is conducted on a case-by-case basis.

In some cases, INZ will insist upon a direct connection between your prior business experience and the current one (eg you must have previously operated a café in your home country in order to establish a café in NZ).  In other cases, INZ will accept management/business experience from one industry as transferrable to another industry.

How much money do I have to invest?

There is no minimum investment requirement.  It will depend upon the type of business you are proposing to establish or purchase. What documents do I need to prepare?

See our LTBV Checklist for the standard documents required.  The paramount documents under any LTBV application will be the business plan and the three year financial forecast.

What are the requirements of the business plan?

Basically you need to demonstrate you understand the market you are investing in, show you have relevant business experience and provide information about how the proposed business is going to benefit New Zealand.

Generally, the forecast must show that the business will be realistically trading profitably after two years.  In addition, to profitable trading, the business will be of benefit to NZ if:

  • There is introduction of new technology, management or technical skills; or
  • The business creates new or expands existing export markets; or
  • Creates employment for a New Zealand citizen or resident; or
  • Revitalises an existing New Zealand business.

The most common way of demonstrating benefit to New Zealand is to create employment opportunities.  For small business proposals, simply employing one New Zealand citizen or resident is usually considered as sufficiently benefitting New Zealand.

Do I have to prepare the business plan and financial forecast myself?

No, you can engage professionals to assist you.

Preferably, you will want to engage a lawyer or immigration advisor to prepare your business plan although the bulk of the raw information still needs to be provided by you.  For a sample of the information required, see the LTBV Checklist.

The financial forecast is generally prepared by a chartered accountant.  The accountants will have their own set of questions to ask you.

Want to know more about business visas to New Zealand?

Talk to Kishen Kommu.   Kishen is an Associate at McVeagh Fleming specialising in the areas of immigration law and civil litigation. Kishen can be contacted on +64 9 306 6748 or by email (kkommu@mcveaghfleming.co.nz).