New Zealand battles for world's wealthiest in post Covid plan

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New Zealand battles for world's wealthiest in post Covid plan

Wealthy investors and highly-skilled workers are very much on New Zealand's radar as it outlined this week a post Covid-19 immigration plan to reduce the economy's dependence on low wage migrants.

The Government's economic development minister Stuart Nash said the new border exceptions would allow more than 200 wealthy international investors to come to New Zealand over the next 12 months, the New Zealand Herald reported.

In a speech about the Government's intentions for immigration policy, Nash said that it would include making it harder for employers to take on workers from overseas, other than in areas of genuine skills shortages.

The world's wealthiest are more mobile than ever before, and the effect of lockdowns has made many re-assess where they want to live and work - and to consider moving. The battle to attract the world's wealthiest is on.”

Chris Moorcroft, of law firm Harbottle & Lewis said in a briefing note that the speech outlining plans to actively seek to court wealthy investor through reforms to its immigration rules, was "light on detail but setting out a clear direction of travel".

"They are not alone. In the UK, the non-dom regime and investor regime look to be more secure than for many years. The Italian and Portuguese regimes are now firmly bedded in and attracting the wealthy in greater numbers. 'Golden visa' schemes exist across the globe and continue to thrive."

Moorcroft added: "Few would disagree with the notion that the wealthy must pay their fair share, now more than ever. But agreeing what 'fair share' means, and the practical difficulties of implementing tax rules in a world of ever-increasing complexity, are far harder.

"The world's wealthiest are more mobile than ever before, and the effect of lockdowns has made many re-assess where they want to live and work - and to consider moving. The battle to attract the world's wealthiest is on."

Moorcroft further posed the overarching hypothesis that while some countries would target the very wealthiest through higher taxes, others might seek to do the opposite - by introducing or strengthening regimes designed to attract the very wealthiest.

"Those regimes might be tax-based, using the UK's resident non-domiciled regime or Italy's lump sum tax regime as inspiration, or might be immigration based, using the lure of visas and passports to attract the wealthy to their shores.

"Since then the US has demonstrated further evidence of its intention to go down the former route, with more concrete proposals for tax rises across a whole range of areas. Meanwhile Hong Kong has introduced a zero tax regime for carried interest, using low taxes as a means to position itself as the destination of choice for private equity funds and executives."

"You might be forgiven for assuming that the New Zealand Government of Jacinda Arden would be more likely to opt for the former approach, aligning itself with the Biden administration. However, in the post-Covid world, assumptions are more dangerous than ever", he said.

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