New Zealand risks losing AIP billions without banking

New Zealand risks losing billions of dollars raised through its Active Investor Plus visa unless it builds stronger private banking infrastructure, according to Dr Sharad Nair. He said the issue will become more pressing as early Growth-category investors approach the end of their required investment terms.

Dr Nair, Founder and Board Member of SFS Private Wealth, said New Zealand has been effective at attracting wealthy migrants but has yet to build the financial services needed to keep a larger share of their global assets in the country.

Immigration New Zealand figures show NZD $2.72 billion in capital had been committed and transferred under the revised programme by early September, with a further NZD $2.215 billion in the pipeline. Under the current rules, Growth-category applicants must invest at least NZD $5 million for three years, while Balanced applicants must invest at least NZD $10 million for five years.

The revised visa settings took effect in April 2025, meaning the first Growth-category investors could start reaching the end of their mandatory investment periods from 2028. Dr Nair said this creates a narrow window for New Zealand to turn an initial visa-linked investment into a longer financial relationship.

"The fact is when due diligence is being done on these individuals, Immigration New Zealand knows what their wealth looks like and knows that only a small piece of it is coming in," Dr Nair said.

"From there on, you need to build platforms for them to interact with the opportunity."

He said tax settings matter, but are not the only factor in where wealthy migrants choose to place their money. Inland Revenue is consulting on how tax residency rules apply to Active Investor Plus visa holders, while changes to the foreign investment fund regime are also under consideration.

Dr Nair said those measures may improve certainty, but would not by themselves persuade investors to move broader banking and wealth management relationships to New Zealand. In his view, the country is now competing less on migration policy and more on the quality of services available after investors arrive.

Retention gap

Sunny Nair, Associate Director, Offshore Wealth Management at SFS Private Wealth, said there is a difference between keeping investor migrants in the country and keeping their money here.

"I think retaining people and retaining money are two different things," Sunny Nair said.

"New Zealand sells itself really well... The question is, are we in a place to retain them as well as their money?"

He said many applicants see the required investment as the price of residency, rather than the basis of a wider investment strategy in New Zealand.

"Most people who come in on AIP don't think of the $5 million or $10 million as an investment. They think of it as an expense," he said.

"They're saying, 'I want to move to New Zealand. Where does the money need to go?' Once that's done, the box is ticked and they've moved."

He said the bigger opportunity lies in engaging with the rest of an investor's wealth, which in some cases may far exceed the minimum threshold required under the visa scheme.

"They have 50, they have 100, they have 500 million, whatever they have. How do I engage them into New Zealand Inc and have that money circulating in the NZ economy?" he said.

"What we do know is that the average investor migrant brings around 2.5 times the required investment into New Zealand."

Global rivals

Dr Nair said New Zealand faces much tougher competition once it tries to attract assets beyond the mandatory visa investment. At that point, he said, local firms are competing with established wealth centres such as Singapore, Hong Kong, Dubai, London and Switzerland, as well as major international private banks.

"Competition isn't other wealth managers in New Zealand, it's JP Morgan Private Banking, it's UBS, it's Julius Baer, it's all these international institutions who are banking these clients on their home turf," he said.

"Because the five million is a minimum requirement, to win any more money than that, you suddenly have to be competitive against some really big names and some really established competition."

Dr Nair compared New Zealand's current wealth management market with Dubai in the 1990s, before that city developed into an international financial centre. He said wealthy clients there were once largely served by bankers travelling in from London, Geneva and Zurich, until local institutions and specialist services took shape.

"When I moved into Dubai, the wealth management business in Dubai was pretty much what wealth management business today is in New Zealand," he said.

He said New Zealand already has some of the conditions associated with wealth centres, including political stability, the rule of law and a reputation for safety.

"We could be known for our banks. We could be known for banking. We could be known as the world's global hub for safety."

"The business of banking or the business of wealth management is the business of trust. So we've already got all the secret ingredients. We just need to put it together."

Wider ecosystem

Dr Nair said attracting ultra-wealthy families also depends on services beyond finance, including immigration settings that can accommodate household and support staff. He cited a recent discussion with a billionaire who chose Dubai over New Zealand because of concerns over visas for employees.

"He said, 'I have an entourage of people that look after me. I wouldn't get work visas for them,'" he said.

"We have visas for your pilot, your crew, your everyone, so they can continue. Singapore is also possible."

SFS Private Wealth began operating in the wealth management market in September 2025 and now has more than 20 staff and dozens of Active Investor Plus clients. The firm is also opening an office in Dubai as it looks to market New Zealand investment opportunities to overseas investors.

"We're missing the infrastructure and platforms needed to support this market. That's really the gap we built SFS to help address," Dr Nair said.