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>The visa scheme seems to be an enormous benefit to NZ. This scheme was once touted as a way to jump start the NZ tech sector but it doesn't appear to be havin

by tjpnz 5y ago

>The visa scheme seems to be an enormous benefit to NZ. This scheme was once touted as a way to jump start the NZ tech sector but it doesn't appear to be having any impact. Those getting the visa might only be in the country a few weeks in a year and their investments are going into companies which haven't done anything innovative in decades. The most scathing part of all is that New Zealand's still a terrible place to build a startup.

q1w2 5y ago
> ...and their investments are going into companies which haven't done anything innovative in decades. Not all investment sparks innovation - and innovation takes years. I would not expect people investing their life savings to get into NZ to invest in high-risk tech startups, but the investments they make will help the NZ economy all the same. Investment flow where risk-adjusted returns are highest - that's the nice thing about free markets - you don't have to plan where to put the money - it'll go where it's most demanded.
- screenbreakout 5y ago
  How will it help New Zealanders if they just invest in real estate? Seems like a good speculative bet for them, but mostly it just makes it more difficult for young people to get afoot in the property market....
  - q1w2 5y ago
    Higher asset prices makes building property more profitable. It incentivizes more construction. This is how the free market works, in general. When prices go up, it incentivizes asset creators create more. This is one of the down-sides of zoning limitations - they do not let the market provide more for the additional demand. ...and a simple Google search confirms that NZ has been experiencing a construction boom.
    - dzhiurgis 5y ago
      Real estate is far from free market. Tons of regulation effectively makes it regulatory capture.
    - tjpnz 5y ago
      >...and a simple Google search confirms that NZ has been experiencing a construction boom. The kind of houses which locals are priced out of due to low wage economy. Certainly good for wealthy immigrants and cashed up Kiwis returning from overseas though.
yardstick 5y ago
While NZ’s lack of capital gains tax should make it enticing, the terrible overseas investment policies/taxes make it less appealing to multi-national companies and investors. To those outside NZ: owning shares in non-NZ companies typically means a 5% yearly wealth tax if the shares don’t pay dividends (Ie most tech companies that are share price growth driven). See https://www.ird.govt.nz/income-tax/income-tax-for-businesses-and-organisations/types-of-business-income/foreign-investment-funds-fifs/foreign-investment-funds-deemed-rates https://www.ird.govt.nz/income-tax/income-tax-for-businesses...
- jashmatthews 5y ago
  In NZ the normal way is Comparative Value which taxes the increase in market value when you sell. Fair Dividend Rate isn't a wealth tax. It's a frankly bullshit option rich people can use when their investments do really well to cap the tax owed to 5% of the starting market value. Hatch explain it a bit here: https://www.hatchinvest.nz/learn-articles/tax-50000-fif https://www.hatchinvest.nz/learn-articles/tax-50000-fif
csomar 5y ago
Could it be because New Zealand is an agricultural economy that just also happens to be a very good place to live in? There is a market to offering rich people passports. New Zealand is just Vanuatu but with extra-steps.
- tjpnz 5y ago
  An agricultural economy where a third of exports go to China. Selling passports won't offset that when geopolitics intervenes. But using those investments to help build out a vibrant tech sector would go further. It may also bring back some of the tech workers the country's been losing.
  - csomar 5y ago
    I don't really see the path from "selling passports" to "vibrant tech sector". That's something politicians have been selling to you to explain their policies. New Zealand is hostile to anyone not having six figures in their bank account. A vibrant tech sector requires all kind of people, laws, infrastructure, etc... Running a business is messy and running a country which run businesses is also messy and require all kind of work/hustles. Who needs that when you can sell passports/real estate/ocean views for lots of money and little work involved.

by tjpnz 5y ago

q1w2 5y ago

> ...and their investments are going into companies which haven't done anything innovative in decades. Not all investment sparks innovation - and innovation takes years. I would not expect people investing their life savings to get into NZ to invest in high-risk tech startups, but the investments they make will help the NZ economy all the same. Investment flow where risk-adjusted returns are highest - that's the nice thing about free markets - you don't have to plan where to put the money - it'll go where it's most demanded.

screenbreakout 5y ago
How will it help New Zealanders if they just invest in real estate? Seems like a good speculative bet for them, but mostly it just makes it more difficult for young people to get afoot in the property market....
- q1w2 5y ago
  Higher asset prices makes building property more profitable. It incentivizes more construction. This is how the free market works, in general. When prices go up, it incentivizes asset creators create more. This is one of the down-sides of zoning limitations - they do not let the market provide more for the additional demand. ...and a simple Google search confirms that NZ has been experiencing a construction boom.
  - dzhiurgis 5y ago
    Real estate is far from free market. Tons of regulation effectively makes it regulatory capture.
  - tjpnz 5y ago
    >...and a simple Google search confirms that NZ has been experiencing a construction boom. The kind of houses which locals are priced out of due to low wage economy. Certainly good for wealthy immigrants and cashed up Kiwis returning from overseas though.

yardstick 5y ago

While NZ’s lack of capital gains tax should make it enticing, the terrible overseas investment policies/taxes make it less appealing to multi-national companies and investors. To those outside NZ: owning shares in non-NZ companies typically means a 5% yearly wealth tax if the shares don’t pay dividends (Ie most tech companies that are share price growth driven). See https://www.ird.govt.nz/income-tax/income-tax-for-businesses-and-organisations/types-of-business-income/foreign-investment-funds-fifs/foreign-investment-funds-deemed-rates https://www.ird.govt.nz/income-tax/income-tax-for-businesses...

jashmatthews 5y ago
In NZ the normal way is Comparative Value which taxes the increase in market value when you sell. Fair Dividend Rate isn't a wealth tax. It's a frankly bullshit option rich people can use when their investments do really well to cap the tax owed to 5% of the starting market value. Hatch explain it a bit here: https://www.hatchinvest.nz/learn-articles/tax-50000-fif https://www.hatchinvest.nz/learn-articles/tax-50000-fif

csomar 5y ago

Could it be because New Zealand is an agricultural economy that just also happens to be a very good place to live in? There is a market to offering rich people passports. New Zealand is just Vanuatu but with extra-steps.

tjpnz 5y ago
An agricultural economy where a third of exports go to China. Selling passports won't offset that when geopolitics intervenes. But using those investments to help build out a vibrant tech sector would go further. It may also bring back some of the tech workers the country's been losing.
- csomar 5y ago
  I don't really see the path from "selling passports" to "vibrant tech sector". That's something politicians have been selling to you to explain their policies. New Zealand is hostile to anyone not having six figures in their bank account. A vibrant tech sector requires all kind of people, laws, infrastructure, etc... Running a business is messy and running a country which run businesses is also messy and require all kind of work/hustles. Who needs that when you can sell passports/real estate/ocean views for lots of money and little work involved.