Remember kiddies, the National Party bought you Kim Dotcom

New Zealand’s Investor Visa Shift: A Useful Path for the Wealthy, But at What Cost?

The government is relaxing the rules on investor visas. This will enable the very wealthy to effectively ‘buy’ New Zealand residency.

Prime Minister Christopher Luxon and Immigration Minister Erica Stanford announced the changes on Sunday. Under the new policy, a minimum of NZD$5 million will be required for ‘Growth’ category investors, while NZD$10 million will be required for ‘Balanced’ category investors. The latter category now includes property development as acceptable investments.

Ironically, a similar policy by a previous National government is responsible for Kim Dotcom gaining New Zealand residency in 2010. This case demonstrates why it is foolish to base your immigration decisions on an applicant’s bank balance.

In September 2009, Immigration Minister Jonathan Coleman, in a speech to the NZ Chinese Business Chamber, celebrated changes the National Government was making as part of its ‘Business Migrant package’, including the introduction of the Investor Plus category. Despite the policy changes being then a month old, Coleman boasted that there were already three Investor Plus applications in process. Given the timing, it is possible that one of these applications was Kim Dotcom.

Mr Dotcom came in under the Investor Plus category that allows people to gain residency if they invest NZD$10 million in Government bonds. This was despite Mr Dotcom disclosing criminal convictions, including one for fraud in Germany.

This makes the Key government responsible for Dotcom. It has been a long saga.

Good character?

Dotcom also applied to buy a number of properties in New Zealand, including a Coatesville mansion. This required the Overseas Investment Office (OIO) to consider whether Dotcom was of ‘good character’” under the Overseas Investment Act.

Dotcom submitted a statutory declaration in support of his own good character, witnessed by a Hong Kong Lawyer, Fee Chung Ming Johnny. Another lawyer working for Dotcom, Greg Towers of Simpson Grierson, extolled the “significant on-going financial benefit to the economy of New Zealand, especially Auckland’s North Shore” should the application be approved, and suggested Dotcom could reconsider his investment intentions should any single application be declined.

As James Ayers noted in ‘Kim Dotcom and the Good Character Test’, the OIO were keen to conclude Dotcom was of good character.

“The OIO stated: “Mr Dotcom has been convicted of a number of offences in both Germany and Hong Kong. However, despite some of these offences being serious, our view is that provide relatively little insight into Mr Dotcom’s character”. So criminal convictions don’t provide the OIO with much insight as to a person’s character?…

The OIO went on to state: ”There are some discrepancies between the information provided by Mr Dotcom (and his German legal advisor) and certain media reports. Our view is that nothing turns on the discrepancies. The offences are serious regardless of whether Mr Dotcom’s version of events or the media’s version of the events is most accurate”. So the OIO considered them serious regardless of who was telling the truth but this didn’t reflect on Mr Dotcom’s character?”

Despite this, the Minister of Land Information, Maurice Williamson, at first, agreed with OIO that Dotcom was of good character. It wasn’t until the Associate Minister of Finance, Simon Power, intervened and took the opposing view that Dotcom’s applications were declined. Good call Mr Power.

Other actions taken by the current government are relevant to the operation of the good character test. On 6 June 2024, David Seymour as Associate Minister of Finance issued a ministerial directive letter to Land Information New Zealand. This will effectively weaken the good character test as Seymour directed the OIO to “carry out less verification of claims made by investors in low-risk cases, relying on statutory declarations made by applicants”. So in many cases a letter from a lawyer confirming good character will do. We can expect more ‘Dotcoms’ to be approved.

In January 2012, Prime Minister John Key was forced to defend granting residency to Dotcom, following the arrest of Dotcom on charges including money laundering, racketeering and copyright infringement. Key said immigration officials were conducting an internal review of Mr Dotcom’ case, “The issue is whether he met the good character tests and, according to the law the way it’s applied, he did.” Key also confirmed that Coleman was told about the application, meaning that the Dotcom case, at some level, went through Coleman’s ministerial office.

In September 2012, Key was forced to apologise to Dotcom after the Government Communications Security Bureau (GCSB) illegally spied on Dotcom and an acquaintance. The GCSB was forbidden to spy on New Zealand citizens or permanent residents. Mr Key said “Of course I apologise to Mr Dotcom, and I apologise to New Zealanders.’. But as the Key government later changed the law to allow the GCSB to spy on New Zealanders it would be reasonable to question the sincerity of this apology.

Kim Dotcom became one of John Key’s favourite bogeymen, wheeled out every time his government needed a political distraction.

While I don’t believe Dotcom should have been given New Zealand residency in the first place, once he held such status, it was in the interests of every New Zealander to defend Dotcom’s right not to be subject to illegal spying, based on the law that applied at the time.

Lack of a plan, again

The latest announcement from the government reinforces the view that National/Act/NZFirst lack a coherent economic plan to grow the economy. Old ideas from previous governments are rehashed, and when these are found wanting, they proselytize from the neoliberal textbook. I mean, if your only plan is to attract investment from wealthy people, why would anyone invest?

To make matters worse, Stanford confirmed that an investor would only have to remain in the country for a total of 21 days over three years to satisfy the terms of their visa under the 'Growth' category. An investor under the 'Balanced' category would have to remain for 105 days. One could ask, why is the government so keen to give New Zealand residency to people who don’t actually want to live here?

While Stanford claims this is about not forcing people to be somewhere they don’t want to be, the real motivation for this may be helping investors avoid being tax resident in New Zealand. It is worth noting the government is also reviewing the Foreign Investment Fund rules - these effectively impose a capital gains tax on overseas held shares.

Once again, the priority for this government is making the world easier for passive property investors, and ensuring they don’t have to pay any sort of capital gains tax.

In any case, some of these ‘investors’ could turn out to be rich doomsday preppers seeking a bolthole in case of a major war. The area around Queenstown is likely to become even less affordable, especially for the people who actually want to live there.

Given the role of National party ministers in selling New Zealand residency to Dotcom in the first place, it should be of no surprise to see Justice Minister Paul Goldsmith approving Kim Dotcom’s extradition to the United States.

Dotcom is the National Party’s dirty laundry.