Marcus Beveridge, Principal, Queen City Law

August 2015

DO WE HAVE A SUSTAINABLE BUSINESS POLICY: Has the pendulum swung too far?

Topics• Investor Category

- What are the numbers?- How do we compare to other jurisdictions?- Ambiguous?- Sustainable?

• Entrepreneur Work Visa- What are the numbers?- How do we compare to other jurisdictions?- Ambiguous?- Sustainable?

• Comments

OVERVIEW

WHAT DO THE NUMBERS TELL US?

INVESTOR PROGRAMME

INVESTOR PROGRAMME

All Countries Application CriteriaFinancial Year Decision Type Investor 1 Investor 2

2013/14   Approved 80% 29 72% 157

    Declined   20% 7 28% 61

Total for 2013/14       36  218               2014/15** Approved 69% 25 54% 150

    Declined   31% 11 36% 129Total for 2014/15**       36  279                              

China (inc HK, Taiwan) Application Criteria

2013/14   Approved 75% 9 76% 116

    Declined   25% 3 24% 37

Total for 2013/14       12  153               2014/2015 Approved 69% 16 54% 130    Decline   31% 7 46% 112Total for 2014/15**       23  242               

**2014/15 only 11 months          

TRENDS IN THE INVESTOR CATEGORY

NUMBER OF INVESTORS

• 2001 - 1088

• 2002 – 1087

• 2006 - 39

• 2012 – 167

• 2014 - 570

• 2015 - 690

INVESTOR PROGRAMME

KEY HIGHLIGHTS

•Still plenty of room for growth

•The significant increase shows there is interest in the investor category. However, the increase is specific to China.

•There is a significant drop in approval rate. This can either be attributed to the following:

• Low quality application; or• The instructions is not being applied properly.

INVESTOR PROGRAMME

HOW DO WE COMPARE TO OTHER JURISDICTION?

Country Basic requirementNumber of application 2013

Australia - Investor and Significant Investor Stream

AU $1.5 million to $5 million - $500k bond, $1.5 million

(managed fund) 545

United States - EB

US $500,000 in targeted employment area: $1 million elsewhere (Business Entities

and Creation of 10 Jobs) 8600

CanadaCAN $800,000 (Government

Bond) 2400

UK

£2 million (Bond, share capital or loan capital in active and

trading UK registered Companies) 1600

KEY POINTS

• Based on the size of our country, we are doing well in terms of the number of applications coming through;

• Our immigration investor policy settings are quite attractive from an international perspective;

• We have more flexibility on where the applicants can invest;

• Our approval rate is very low.

INVESTOR PROGRAMME

INVESTOR PROGRAMME

ARE THE IMMIGRATION INSTRUCTIONS AMBIGIOUS?

• Lawful Earnings

• How long is a piece of string?

• What is independent and verifiable?

• Business Experience

• How senior is senior?

• Management Level?

IS THIS SUSTAINABLE?

• Certainty with EOI

• Processing time - Backlogs

• Approval rate - Declining

ENTREPRENEUR WORK VISA

WHAT ARE THE NUMBERS?

• From 01 July 2014 – 30 June 2015

• 53 application have been approved

• 68 declines

• 25 withdrawal

HOW DO WE COMPARE TO OTHER JURISDICTIONS?

Country Basic requirementNumber of application

Australia - Business Innovation Stream

a) Ownership of a business - turnover of AUD 500,000 b)

Net asset AUD 800,000 (Point System)

Around 5000 as at April 2015

United States - E2

"Substantial amount of Capital" - No minimum investment amount is

specified Around 32,000 in 2012

Canada - Entrepreneur ProgramMinimum net worth of CDN

$300,000 114 as at 2013

UK - Tier 1 (Entreprneur)£50,000 investment fund

(Point system) 1387 as at 2013

ENTREPRENEUR WORK VISA

ARE THE IMMIGRATION INSTRUCTIONS AMBIGIOUS?

• What business is acceptable? Objective of the instructions is yet to be amended.

• Definition of working capital

• Meeting forecasts and projections

IS THIS SUSTAINABLE?

• The benchmark is too high and the instruction is too prescriptive

• Uncertainty with regards to pathway to residency

• Attractive policy?

• Commercially pragmatic?