BJ5.50 Definition of ‘acceptable investment’ (29/11/2010)

1. An acceptable investment means an investment that:
   1. is capable of a commercial return under normal circumstances; and
   2. is not for the personal use of the applicant(s) (see BJ5.50.1 below); and
   3. is invested in New Zealand in New Zealand currency; and
   4. is invested in lawful enterprises or managed funds (see BJ5.50.5) that comply with all relevant laws in force in New Zealand; and
   5. has the potential to contribute to New Zealand's economy; and
   6. is invested in either one or more of the following:
      • bonds issued by the New Zealand government or local authorities; or
      • bonds issued by New Zealand firms traded on the New Zealand Debt Securities Market (NZDX); or
      • bonds issued by New Zealand firms with at least a BBB- or equivalent rating from internationally recognised credit rating agencies (for example, Standard and Poor's); or
      • equity in New Zealand firms (public or private including managed funds); and

        Note: For the purposes of these instructions, convertible notes are considered to be an equity investment.

   7. is not (directly or indirectly) invested in residential property development (see BJ5.50.10 below) or deposit taking financial institutions (e.g. banks or finance companies) (see BJ5.50.15 below).
2. Notwithstanding (a) above, where an investment fails to meet one of the acceptable investment requirements, a business immigration specialist may consider, on a case by case basis, whether the failure was beyond the control of the principal applicant and if satisfied that this was the case, may consider the investment acceptable.

BJ5.50.1 Personal use of investment funds

Personal use includes investment in assets such as a personal residence, car, boat or similar.

BJ5.50.5 Managed funds

1. For the purposes of these instructions, managed funds are defined as either:
   1. a managed fund investment product offered by a financial institution; or
   2. funds invested in equities that are managed on an investor's behalf by a fund manager or broker.
2. In order to be acceptable as a form of investment managed funds must be invested only in New Zealand companies. Managed fund investments in New Zealand with international exposure are acceptable only for the proportion of the investment that is invested in New Zealand companies.

   Example: Only 50% of a managed fund that equally invests in New Zealand and international equities would be deemed to be an acceptable investment as set out in BJ5.50.5

BJ5.50.10 Residential property development

For the purposes of these instructions, residential property development includes:

1. building or arranging to build a household unit for the purpose of selling it; or
2. acquiring a household unit from a person who built it or arranged for it to be built for the purpose of selling it; or
3. acquiring and subdividing land for the purposes of residential property development; or
4. acquiring and/or selling an existing household unit.

BJ5.50.15 Deposit taking financial institutions

For the purposes of these instructions, a deposit taking financial institution is an institution that carries on the business of borrowing and lending money, or providing financial services, or both.

Effective 29/11/2010