The option for Golden Visa holders to give to charity as part of their investment in New Zealand was expanded at the beginning of this month.
Visa applicants in the popular Growth category can now donate up to $1m of their $5m required investment.
The change ought to be a big win for New Zealand charities – Growth visas pulled nearly $1b into the country in their first year.
But those with experience of the system say it isn’t working for philanthropy, and without an adjustment to the rules the headline expansion is unlikely to translate into much actual giving.
Indeed, charitable giving has been allowed as a qualifying investment under the Balanced category visas for over a year. It’s never been used.
The Golden Visa scheme covers two Active Investor Plus visa categories, Growth and Balanced, and was revised in April 2025.
In return for investment (and, at least notionally, donation) in New Zealand, applicants receive permanent resident visas for themselves and their immediate family.
The most recent figures show that in its first year, $481m was invested through the Balanced category, flowing to bonds, listed equities and property development; none went to philanthropy (donation was added as an acceptable investment on June 1 last year).
That’s not because visa applicants have been uninterested in giving.
Charities and law firms indicate that dozens of AIP applicants have investigated donations but encountered a key stumbling block.
The AIP rules for how donated money must be transferred effectively prevent the donor from earning tax benefits from the donation in their home country, a problem for Americans in particular, who make up the single largest cohort of AIP visa holders.
Charities have petitioned Invest NZ and Immigration NZ – which both have purview over the visa scheme - to adjust the rules. However, officials say it’s too risky.
In July last year, the New Zealand charity Live Ocean and a handful of others from the sector -- including The Gift Trust, Philanthropy NZ, Dentons and Community Foundations of Aotearoa NZ -- wrote to the head of international investment at Invest NZ.
Live Ocean had been approached by a donor from the United States who was working on their application under the AIP visa scheme.
The donor wanted to contribute to Live Ocean’s New Zealand-based marine restoration and conservation work under the AIP visa scheme, the letter said.
It noted that Live Ocean has a registered charity in the US and if the donor’s funds moved through this entity the donor would receive a tax deduction in that country.
The letter explained: “...under current AIP rules, the donor cannot make the gift through Live Ocean USA – even though it is a recognised US charity and can transparently transfer funds to Live Ocean NZ, a registered charity in New Zealand.
“This is because AIP regulations require the donation to be made directly from the donor’s personal bank account to a New Zealand charity, without allowing for trusted intermediaries like US-based 501(c)(3)s [public charities and private foundations] or Donor-Advised Funds. But for the donor to receive a tax benefit under US law, the gift must be made to a US charity.”
“If the US donor cannot donate through Live Ocean USA or a Donor-Advised Fund (DAF), it is unlikely they will make a philanthropic donation under AIP, which is a huge loss to Live Ocean and their work,” the letter said.
Rosalie Nelson, CEO of Live Ocean, confirmed to the Herald that the donation never went ahead.
She acknowledged the donation could have been made if the donor had been willing to forego the associated US tax benefit. It seems they were not.
If this seems uncharitable, it’s worth emphasising that a donation under AIP replaces investment, which anticipates both the return of capital and an additional return (although neither is guaranteed).
Balanced category visas require a $10 million investment; qualifying investments include very safe investments, including government and corporate bonds. After five years, the money can be removed from New Zealand.
Growth category visas require a $5m investment in more risky assets, either sunk directly into companies outside the stock exchange or invested through managed funds; most of the money flows to private credit. After three years, the money can be removed from New Zealand.
Jessie Rose, special counsel at Dentons, said that her firm has dealt with a handful of AIP clients in the last 14 months interested in donating a portion of their required investment.
All were US-based and keen to make sure that the donation, if made in New Zealand, would have the same value and benefit as it would if it was made in the United States.
Preserving the US tax deduction was key to preventing those donations from going ahead, she said.
This route from the US to New Zealand, for philanthropic giving, is well-established outside the AIP scheme, Patrick Gamble, CEO of Perpetual Guardian, a manager of philanthropic funds and assets, told the Herald.
The US allows donors to receive tax credits for donations that ultimately flow to charities offshore, including New Zealand; that process is legal and well understood, he said.
In the US context, allowing funds to originate in a donor-advised fund was critical, he said: “If you want charitable donations to be part of this [AIP] process, then that should count.”
While the problem is most visible in the case of Americans, the single largest group of AIP visa applicants, Gamble said it likely extends to those from many other countries too.
“Tax credits motivate wealthy donors and the US is far from the only country to offer them,” he said, noting that he considers the New Zealand Government’s recently legislated cap on tax credits an indication that it misunderstands their importance.
Immigration Minister Erica Stanford did not respond to the Herald’s questions.
But Stacey O’Dowd, border and funding immigration policy manager at the Ministry of Business Innovation and Employment (MBIE), said that the Government is not considering a rule change.
“There are risks relating to Donor-Advised Funds that officials consider cannot be sufficiently mitigated, including the possibility that Funds could be repatriated during the investment period. Permitting Donor-Advised Funds could also disadvantage smaller charities, which are less likely to have the resources required to establish the necessary structures overseas. Applicants can, however, request an exception to instructions where there are specific reasons for their proposed investment approach, and these are considered on a case-by-case basis by decision-makers.”
Eleanor Cater, chief executive officer of Community Foundations of Aotearoa, said there were obvious ways in which smaller charities could benefit from the use of AIP for donation, including through donor-advised funds.
She said large donations often flow to small regional charities through the community foundations that make up her group’s membership.