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Starting a business in New Zealand?
General Information
Why New Zealand?
New Zealand is an economically sound country, with straight-forward rules and regulations, corruption is not a problem, a skilled labour force, and English is the working language. There are still links to the UK, and many of the fundamentals are similar to the UK, such as legal systems, banking systems etc.
What are the currency and the exchange rate?
The currency of New Zealand is NZ dollars.
The dollar has been very strong for the last few years, at the moment £1 = NZ$2.577. It is subject to a little bit of fluctuation as New Zealand is a free trade country and is sometimes affected by things happening in overseas markets.
What sort of opportunities are there in New Zealand?
New Zealand is now competing successfully overseas, and has a strong, growing economy (1.7% in the March 2007 year, and 3.2% predicted for 2008). It is a stable country, without the conflicts that affect many other countries.
Small business is very popular in New Zealand. 96% of businesses employ fewer than 20 people (Statistics NZ).
The main industry is still agriculture, but New Zealand has grown a lot in the past forty years and is beginning to see a real variation in its business. Some of the new and fast growing industries are:
biotechnology
wine-making
information technology
tourism
education (overseas students)
film making
yacht design
and the list goes on….
What’s the climate and weather like in New Zealand?
The climate in New Zealand is described as temperate. It has distinct seasons, and should not be mistaken as having the same climate as Australia. The climate can, however, vary depending on where you are in New Zealand. In general the South Island will get colder than the North Island in Winter – yes there is snow….Auckland and north of Auckland very rarely have frosts.
A couple of things to be aware of with New Zealand weather is that it can be very changeable and the sun very strong.
Average temperatures (max and min)– degrees Celsius
AucklandWellingtonChristchurchQueenstownSpring
Sep, Oct, Nov18-1115-917-716-5Summer
Dec, Jan, Feb24-1220-1322-1222-10Autumn
Mar, Apr, May20-1317-1118-816-6Winter
Jun, Jul, Aug15-912-612-310-1
Where should I base myself?
Probably best answered by visiting the various parts of New Zealand and seeing which place seems right for you. The climate, as well as the style of the city or town can vary a lot. A lot would also depend on the type of business you were thinking of. Obviously in the larger centres, such as Auckland, Wellington and Christchurch, there is more scope for larger businesses.
Bay of Islands – A lot of tourism
Auckland – The city of sails. The largest city in New Zealand, business centre, a culturally diverse population. A lot of people start here.
Hamilton – The garden city. A reasonable size city, with a lot of agriculture in the surrounding towns.
Rotorua – The geothermic centre. A lot of tourism.
Wellington – The windy city. New Zealand’s capital city, and probably the city with the most cultural events, arts and theatre.
Nelson – A medium sized city/town. A pleasant climate, surrounded by beautiful sounds (national parks) and vineyards.
Christchurch – The cathedral city. The largest city in the South island, with some real English heritage.
Dunedin – The student town. A very popular university town.
Queenstown – The adventure capital. A tourist hotspot, especially in the winter with many ski fields in the vicinity.
Business in New Zealand
What are the main industries in New Zealand?
The main industries in New Zealand are agriculture, horticulture, fishing and forestry, and tourism.
New Zealand is heavily dependant on trade. Exports account for about 24% of its output. New Zealand has openly encouraged free trade, and has almost no trade restrictions; it has also removed many barriers to foreign investment.
What does New Zealand export?
New Zealand’s main exports are dairy products and meat. Its main export destinations are Australia, the United States of America and Japan. The UK is New Zealand’s 5th largest export destination. The main exports to the UK are meat, wine and wool. Trade with the UK has slowed considerably since the creation of the European Union.
What does New Zealand import?
New Zealand’s main imports are machinery and equipment, vehicles, aircraft and petrol. Most imports come from Australia, the United States of America, and China. The UK is 8th on the list of import countries. The most popular commodities imported from the UK are Motor vehicles, medicaments.
Any good trade opportunities?
New Zealand has several trade agreements with other countries.
- CER (closer economic relations) means that with a few exceptions there is free trade between Australia and New Zealand. Goods and services sold in one country can also be sold in the other.
- P4 agreement – a free trade agreement between New Zealand, Brunei, Chile, and Singapore
- APEC (Asia Pacific Economic Cooperation) – agreement between 21 countries for free trade by 2015.
- Free trade agreement with Thailand
- Talks in progress for free trade agreements with China
What do I have to do if I want to import goods to sell in New Zealand?
There aren’t any import licence requirements or quotas in New Zealand. But all goods must be cleared by customs and this will require you to pay a customs duty which will depend on the product; the National Tariff Advisory Unit, which is part of New Zealand Customs, should be able to advise you on this. Usually a Customs broker will process the goods, and they will need documentation; the Airway bill, invoice, packing list, etc.
New Zealand has very strict controls as far as imports of foods, plants, animals, seeds etc are concerned. This is in order to avoid the introduction of any new diseases into the country.
You must also pay GST on imported goods over $400, as well as an import transaction fee of $18 each time.
What other things should I consider?
If your product is original, then you should consider applying for a patent. This means you will be the only person/company allowed to produce/sell the product in New Zealand for 20 years. You will have to pay fees throughout this period to maintain your patent.
Another idea would be to register your trademark. This means that you sign/logo/design would be protected for 10 years within New Zealand – no one else can use it. After 10 years you can reapply to extend the trademark protection.
What is the employment situation in New Zealand?
Unemployment is quite low in New Zealand, 3.9% (May 2006). New Zealand has a highly skilled workforce, and its immigration policies encourage immigrants who are qualified in a skill shortage area. If, however, you can’t find suitable people within New Zealand you can apply to the Department of Immigration to become an accredited employer, so you can offer work to non-New Zealand citizens.
Employment in New Zealand is based around a document called the Employment Relations Act 2001. Every employee must have a written employment agreement. You can find examples and templates on the Department of Labour website HYPERLINK "http://www.ers.dol.govt.nz" www.ers.dol.govt.nz
The minimum wage for 16 years and over, is NZ$12 an hour before tax. A training wage is a little less, at $9.60 an hour. These amounts do not include holiday pay.
Holiday entitlement has very recently changed from 3 weeks to 4 weeks paid annual leave, after a year of employment.
Information on Immigration
Do I need a visa to go to New Zealand?
If you are going to live and work in New Zealand you will need a visa. But if you are a British passport holder you can visit for up to 6 months without needing a visa. A visit to New Zealand would be a good idea, and then you can see which part of the country appeals to you.
Can I immigrate – what type of visa do I need and can I get a visa?
There are several ways to get a visa, but there are more opportunities for visas if you are starting up your own business in New Zealand:
Long-term Business visas
To get this visa you will need to have evidence for ‘sufficient funds’, good English, good health, and a sound business plan. You will get a nine month visa so that you can set up the business. After these nine months you need to apply to another three years, but you will have to show that you are making progress in your business with relevant documents (accounts, GST records, tax documents, invoices, bank statements etc).
This visa can be a step towards gaining residency.
Entrepreneur Visa
After two years in business you can apply for residence. You need to:
have bought (or have at least 25 % share in) a business in New Zealand
you have to have been in that same business for at least 2 years.
But you can’t have had any welfare benefits while you have been in New Zealand (neither can your family).
Active Investor Migrant
There are 3 different categories, depending on how much money you are investing. The minimum investment to obtain a visa in this area is NZ$2.5 million + NZ$1 million for settlement funds. You must also have at least four years business experience, good health, and a clean police record. Sometimes there is an English language requirement also.
Apart from the business visas you can also apply to stay in New Zealand under other categories;
Skilled Migrant Category
New Zealand has a list of jobs/skills/occupations which the country needs. This is a points system. Obviously if you are in a sector on this list, you get more points. Points are also given for qualifications, experience, age, job offers etc.
There are also visas for dependent family members, and working holiday visas.
For more information you can have a look of the website for the Ministry of Immigration HYPERLINK "http://www.immigration.govt.nz" www.immigration.govt.nz
Information on Taxes
What is the tax like in New Zealand?
For companies
- up to and including 2008 – 33 cents in every dollar
- 2009 and after – 30 cents in every dollar
For sole traders / individuals
> $38,000, between 19.5 and 20.9 cents in the dollar
$38.001 - $60,000, between 33 and 34.4 cents in the dollar
< $60,001, between 39 and 40.4 cents in the dollar
Do I need to pay tax in New Zealand?
If you are away from New Zealand for more than 325 days in the year you are a ‘non-resident’. This means that you only pay tax on income from New Zealand.
If you stay in NZ for most of the year you will have to pay tax in New Zealand. Luckily New Zealand has what they call a ‘Double Tax Agreement’ with the UK. So if you’re a resident in both countries this agreement means that you won’t be taxed twice.
What do I have to do register for tax in New Zealand?
First of all you will have to decide what sort of ‘structure’ your business is:
Sole Trader; if you’re controlling, managing, owning the business. You get all profits. If this is you – you personally pay all taxes and debts.
Partnership; if two of more of you are running the business together, sharing profit etc. In this case, as far as tax is concerned, it’s not the ‘partnership’ paying tax. The individual partners pay tax on their own share of the income.
Limited Partnerships; This means that the ‘partnership’ is a separate legal entity. It’s separate from the partners who run it – so it’s the ‘partnership’ paying tax. You will have to register your ‘limited partnership with the ‘companies office’.
Companies – This is a separate legal entity – separate from the owners of shareholders. Again, you’ll need to contact the ‘Companies office’ to register your company and you’ll have to pay a fee.
What sort of registrations will I have to complete for tax?
You’ll have to register for GST, and IRD numbers, and if you don’t want to do the work all yourself, you’ll have to register as an employer.
What’s an IRD number?
An Inland Revenue Number (the IRD being the guys in charge of tax). It’s a bit like your NI number. You need this number to work in New Zealand. It usually takes about 2 weeks to get one of these.
If you’re a business, partnership, trust/estate you will need an IRD number for that entity. You need an IRD number application – non-individual.
If you’re a company you can apply for this at the same time as you register your company
If you’re a partnership you also need to apply for your own individual personal number.
If you’re a sole trader you need to apply for a personal IRD number.
What’s GST?
Goods and Services Tax – a bit like VAT in the UK. It’s 12.5 % added to the selling price / market value. Your customers pay this – but then you have to pay it to the IRD. But if you buy goods / services, you are also paying GST, and you can claim this back (great when you’re starting up).
You have to register for GST if you are expecting to earn over NZ$40,000 in a year. Or you can register voluntarily.
There are three different ways of accounting for GST:
Invoice basis – you claim / pay whenever you send / receive an invoice.
Payments basis (the most common) – you claim / pay when you receive / pay the money. Businesses with turnover of over NZ$ 1.3 million can’t always use this method.
Hybrid basis – a combination of the other two.
When do I pay / file my GST returns?
To a certain extent it depends on what you prefer. You have the choice between every month, every two months, or every six months (six months only if you earn less than NZ$ 250,000).
What if I am employing people?
When you employ staff, you will need to fill in a form which you can down-load from the IRD website. This registers you as an employer. You then need to deduct PAYE (the tax your employees pay), from your employees wages and send it directly to the IRD every month. When you register as an employer, you will also be automatically registered for ACC. This is a tax paid by all employers to cover workplace accidents (a certain amount also comes out of the employees PAYE to cover non-workplace accidents).
For further information on taxes in New Zealand visit the Inland Revenue Department website HYPERLINK "http://www.ird.govt.nz" www.ird.govt.nz
Day-to-day information
What about banking in New Zealand?
Banking in New Zealand is straight forward. There are several major banks in New Zealand, and they are all stable; ANZ, BNZ, National Bank, WestpacTrust, ASB, Countrywide. Setting up a bank account in New Zealand is not difficult, but setting one up before you go could be a good idea. However, you should watch out for bank charges before you choose a bank or an account. New Zealand has been using debit cards for many years now, and in the last five years or so, the banks have started charging for debit card transactions. New Zealanders, having clicked onto this, have started using their credit cards more like debit cards for the little transactions; paying it off at the end of the month, as there is only an annual fee on credit cards.
Inflation was at 3.4 % for the year to March 2008
Base lending rates were 13.66% in May 2008
Call deposit rate were 3.10% in May 2008
What’s the television like?
There are 5 free television stations in New Zealand. Television One and Two are state-run, channels Three and Four are privately run, and there is also now a Maori channel – a government initiative to try to help encourage the Maori language and culture.
Most news and documentaries can be found on channels one and three. There are also some English soaps (albeit a little behind).
Sky television is also very popular, especially as they have the rights to many sports events – such as rugby.
And radio?
There are many national and regional radio stations. Newstalk ZB is the main information station which is nationwide. BBC world wide is also available in some parts of the country.
The newspapers?
New Zealand has several Major papers – although most of them are regional (even if the regions some of them cover are large – the New Zealand Herald covers a lot of the North Island). Most small towns also have a local paper which comes out once or twice a week. There are two major Sunday papers and these are both national. The more serious of the two is the Sunday StarTimes.
Is the water safe to drink?
New Zealanders are quite environmentally conscious, so there aren’t many problems with pollution. The water is fine to drink, but it will be treated unless you are in the country, and then it is usually pumped straight from the ground or from a natural source - delicious.
What is the health system like?
You will have to pay to visit the doctor (about $40). Some medication is subsidised, but not all. However any maternity care is free.
Public hospitals are also free, but if the treatment is not urgent, you can be on a waiting list for quite a while. In this case, there are many private insurance options, where you can have some or all private hospital costs paid if you want things to go a bit faster.
Will my English appliances work in NZ?
The electricity supply is 230/250 volts. Plugs have 3 prongs, so you will need a few adaptors.
How about internet and phones?
The internet is everywhere in New Zealand. Internet cafes are usually found even in the smallest of towns. There are several home internet suppliers, all offering broadband.
There are also choices of telephone companies and call plans for fixed lines. The international code for New Zealand is 0064. Most telephone companies have very good deals for calls back to the UK – you just need to ask them.
Mobile phone coverage is fine in towns and cities, but in some more remote parts of the country there can be limited service.
What are the hours of shops and businesses?
All shops have to be closed on Christmas day and Good Friday. Apart from that, shopping hours are very good in New Zealand.
Banks are open until 4.30pm Monday to Friday
Businesses and offices are usually open from 8.30am until 5.00pm
Shops are usually open from 8.30/9.00am until 5.30-6.00pm – later if you’re in a main centre, and most large shopping or commercial centres have one late night per week where they are open until 9.00pm.
Supermarkets are generally open from about 8.00am until 8-9.00pm 7 days a week. In the larger centres you will find 24 hour supermarkets.
How do I get around?
You’re most likely to fly into either Auckland or Christchurch airports. There are shuttle buses from the airports into the cities, or taxis if you prefer. All of the airports are slightly out of the city centres.
As far as public transport is concerned, New Zealand lags far behind Europe – there is a lot of work to do in this area.
Trains run between the major centres, there are usually a few each day.
Planes are a better bet if you are travelling a major distance. All of the major centres have airports, and the plane is definitely the best option if you were wanting to go from Auckland to the South Island, as otherwise you will have to drive about 8 hours to Wellington, get a three hour ferry, and then continue driving…..Have a look on the Air New Zealand, Qantas, Freedom Air, Origin Pacific, websites.
Buses – the major centres have buses or trams, but they usually all head into the centre, which makes things more difficult when you want to head across town. There are also buses to and from major centres, and they make stops at smaller towns. The main national bus service is called ‘Intercity Coachlines’, which service over 600 towns.
Cars are probably your best bet. Have a shop around for car rentals, and because of the distance between towns, most of them cater for people who want to pick up a car in one town and leave it in another. The other option if you’re staying, is buying a car. Cars in New Zealand are not very expensive. Second hand cars are usually affordable, as the majority of second-hand cars are imported cheaply from Japan.
Getting there
How do I get to New Zealand?
It’s going to be a long trip. Usually about 25 hours, with a stop-over either in Los Angeles, Dubai or Asia. You usually have a higher baggage allowance via LA. If you have the time, these stop-overs are a great opportunity to see another country all within the price of your ticket. Flights usually land in Auckland or Christchurch.
The following airlines all travel to New Zealand from the UK:
Air New Zealand
Qantas
Emirates
Singapore Airlines
Cathay Pacific
Malaysia Airlines
Thai Airways
Korean Air
Eva Air
Royal Brunei
How do I move myself and my belongings to New Zealand?
There are several companies which specialise in moving belongings from the UK to New Zealand, from a few t-boxes to a household. Here are a few:
Anglo Pacific Movers
Excess International Movers
J.A. Coles Overseas Movers
Abels International Moving Services Ltd
Sterling Relocation
Simpsons Removals and Storage
Doree Bonner International
Moving Home Company Ltd
All freight International Removals
Freedom Shipping
PSS International Removals
Banking In New Zealand
List of Banks
Banks of New Zealand
ABN AMRO Australia and New Zealand
Level 32
VERO Centre
48 Shortland Street
Auckland
Tel: +64 9 358 7500
Fax: +64 9 377 9797
www.abnamro.co.nz
ANZ Bank of New Zealand
Tel: +64 4 470 3142
www.anz.co.nz/default.asp
ASB Bank Limited
Cnr Albert & Wellesley Sts
PO Box 35
Shortland Street
Auckland 1140
Tel: +64 9 306 3000
Fax: +64 9 306 3010
www.asb.co.nz
Bank of New Zealand Limited
International Banking Services
Level 22
BNZ Tower
125 Queen Street
Auckland
Tel: +64 4 924 24 24
www.bnz.co.nz
Kiwibank Limited
Private Bag 39888
Wellington
Tel: +64 4 473 1133
www.kiwibank.co.nz
National Bank of New Zealand
205 Queen Street
PO Box 18
Auckland
Tel: +64 4 382 9608
Fax: +64 9 359 9828
www.nationalbank.co.nz
Rabobank New Zealand Limited
Postal Box 38 396
Wellington Mail Centre
Wellington
Tel: +64 4 819 2700
www.rabobank.co.nz
Citibank, N.A.
Citibank Centre
Level 11
23 Customs Street East
PO Box 3429
Auckland 1
Tel: +64 9 307 1902
www.citigroup.com/citigroup/global/nzl.htm
Reserve Bank of New Zealand
2 The Terrace
PO Box 2498
Wellington 6011
Tel: +64 4 472 2029
Fax: +64 4 473 8554
Email: rbnz-info@rbnz.govt.nz
www.rbnz.govt.nz
Westpac
79 Queen Street
Auckland
Tel: +64 9 912 8000
www.westpac.co.nz
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