New Zealand is more than just a pristine and popular tourist destination, its business environment is also especially favourable. According to the 2020 World Bank’s Doing Business survey, New Zealand ranks number one as the most accessible country in the world to do business in. It is also the easiest place to start a business. And to no surprise, for New Zealand is renowned for its open market, regulatory efficiency, monetary incentives and high level of transparency. Thus, starting a business in New Zealand can be done with few restrictions. New Zealand Now also reports you can even reserve a name for your company and incorporate it within hours by utilising the Government’s online portals.
Additionally, the physical and technological infrastructure required by businessmen are pretty extensive. For foreign entrepreneurs, New Zealand offers online channels that make starting a company a smooth process – this can even be completed in a couple of hours.
Why start a business in New Zealand?
Business and investor migrants are welcomed in New Zealand, and the country has taken many steps to simplify the immigration process for experienced businesspeople and investors. According to The World Bank, New Zealand has the most lenient regulatory environment and a strong economy, making it easy to do business. Its diverse geography and culture are key to creating a dynamic and vibrant business environment.
To immigrate to New Zealand for your entrepreneurial goals, the government looks for a combination of proven business skillset, a solid business plan and access to financial resources to be considered. The New Zealand government believes an “investor” is someone who has the capital to invest in various investment vehicles, this includes start-ups, bank bonds and many others. Depending on whether you wish to start a business or invest in New Zealand, the government’s immigration page will provide you with ample information on how to do so.
How to start a business in New Zealand
1. Explore business opportunities
Coming up with a realistic business idea is the first step to starting a business. There are plenty of opportunities for small and large companies in New Zealand, whether it is to expand on existing industries or fill in market gaps. Natural resources are also plenty in New Zealand, this provides prospective businesses with the necessary environment for services like bee farming, winemaking and wood processing. However, companies related to child-rearing, such as tutorial centres and child-care services, have also gained popularity.
You should consider your interests, goals and skills as you search through endless trending business ideas. When you come up with a preliminary statement, it is important to also conduct a thorough analysis and refinement. This includes determining who your customers are and defining possible costs, profits and risks. Doing market research and understanding it is vital. You must also understand product development, marketing strategies and financial financing before launching your business.
With the help of the New Zealand government, write a business plan with these easy steps after you have come up with a feasible business idea.
2. Get a visa
Obtaining a visa should be your top priority. There are currently four types of visas that allow individuals to start their own businesses in New Zealand:
1. Entrepreneur Resident Visa
Duration: Valid indefinitely, after which permanent residency application is allowed.
This visa is suitable for those already on an Entrepreneur Work Visa (see number 4 below) or another visa that permits self-employment. This will grant you permanent stay in New Zealand.
Applicants have to be self-employed for at least six months. Those applying with less than two years self-employment history, an invested capital of at least $500,000 is required and the individual must have created three new jobs in New Zealand.
2. Global Impact Permanent Residence Visa
Duration: Valid indefinitely
This visa is suitable for those who wish to live in New Zealand permanently and have held a Global Impact Work Visa (see below) for at least 30 months. In addition, individuals applying for this visa will need continued support by the Edmund Hillary Fellowship.
3. Global Impact Work Visa
Duration: Valid for up to 3 years, after which permanent residency application is allowed.
Applicants must be selected by the Edmund Hillary Fellowship to start on its three-year programme as an innovative entrepreneur or investor. A high standard of English is required and a maintenance fund of $36,000 is required to support you and your dependents for the first year. After 30 months, individuals are allowed to apply for permanent residency.
4. Entrepreneur Work Visa
Duration: Valid for up to 3 years, after which permanent residency application is allowed.
Suitable for experiences business individuals who wish to work in their own businesses in New Zealand. This visa will grant an individual to buy or start his/her business in New Zealand, physically or remotely.
A capital investment of at least $100,000 is required. However, if the business in within the science or Information and Communications Technology sector or shows a high level of innovation or export potential, the required capital investment may be waived.
Visit here to learn about the specific requirements for each visa type.
3. Come up with a business structure
Once you’ve secured your visa, the next step is to determine the type of business structure that is best for your business. According to the New Zealand government, the most common are “sole trade, partnership or company.” There are many advantages and disadvantages to the different kinds of business structures. If you aren’t sure on where to start, this guide might help you in determining a suitable business structure.
For example, the limited company structure limits your liability at the value of your invested capital. Still, some of the regulations and formalities associated with it can be viewed as restrictive or troublesome. There are other forms of business organisations besides these common ones. One of the best options is buying stock in a franchise. A foreign investor may find it more risk-free to leverage a brand name that has established credibility.
4. Minimum capital required
A registration fee of $150 is required when you register your firm with the Companies Office. A company in New Zealand does not require a minimum capital investment. Those who work for themselves or in partnerships are eligible to register their businesses free of charge.
According to this article by the New Zealand’s Legal Team, individuals should be aware that, even though starting a new company in New Zealand may be free, you will still need ample capital and resources to hire staff. “According to RadioNZ, the average salary [in New Zealand] is about $49,000, but this can climb in sectors such as business development of marketing, where the average salary is [nearly] $106,000.” In the same article, the legal team advises businesses to hire freelancers, remote or contract works, or consult with a Professional Employer Organization (PEO) to reduce recruitment and HR expenses.
5. Pick and register a name
Next on your list of to-do items is to decide whether or not your business name is available after determining your business structure. The task of choosing a business name isn’t easy. In New Zealand, the Government has created a free online tool called ONECheck, designed to help entrepreneurs find available words for their companies. As soon as you’ve made up your mind about your company name, you should reserve it through the Companies Office.
6. Set up a RealMe login
We recommend that you set up your RealMe login at this point. RealMe is a secure tool to access various online services with a single username and password, so as to prove a person’s identity.
The RealMe login system is used by numerous government agencies, whether you want to register a company name, manage your Inland Revenue account or apply for permits. By setting up your RealMe account ahead of time, you will the following processes a lot easier.
7. Create a corporate banking account
It is essential to have a business banking account, especially as your business evolves. Mixing business and personal transactions in the same account is not ideal because it can compromise asset protection and confuse accounting and tax reporting. Additionally, you will also need to do a lot of investigative work in trying to uncover your business expenses. Therefore, setting up a corporate bank account early will prove to be wise. Make an appointment with a bank of your choice and ask questions about the documents and requirements necessary for setting up a business account.
8. Observe the country’s legal obligations
For many people, especially foreigners, complying with regulatory requirements can be a challenge. There are a variety of regulatory rules you must observe, including the following:
(a) New Zealand Business Number (NZBN)
The New Zealand Business Number (NZBN) is a 13-digit number that is available free-of-charge to all New Zealand businesses. All New Zealand companies have to be registered prior to obtaining an NZBN. This number helps to identify and store a company’s information. Other businesses can also look up the NZBN Register to engage in your services.
(b) Protect your brand
Having a unique business identity is vital to the success of a business. To avoid accidentally plagiarizing or stealing intellectual property, it is essential to do your due diligence.
Don’t forget to also register your logo and trademark once you are confident they are unique. The registration of a domain name is also crucial to safeguarding your company’s uniqueness.
(c) Obtain the necessary licences and permits
Checking the rules with the council in your city is essential since different cities are regulated differently. Before launching your firm, you should ensure that not only do you meet any general license or permit requirements but that you also have all of the specific licenses that are required for your particular industry.
For example, if a business operates as a “pawnbroker and is a provider of consumer credit (lender) or a mobile trader, and are not already licenced or authorized by the Financial Market Authority of Reserve Bank of New Zealand,” it must be certified as permitted under Part 5A of the Credit Contracts and Consumer Finance Act 2003, as instructed by New Zealand’s Ministry of Justice. This will cost $410.
Other industries that involve private investigation and/or security work, alcohol, food and beverage, health and brothels will require permits in order to operate.
(d) Fulfil tax requirements
If your business earns greater than $60,000 annually, you will have to register with the Inland Revenue Department for the Goods and Services Tax. Be sure you observe all deadlines for filing to avoid paying additional fees. Several educational information on income tax and other important pointers for businesses are also available on the Inland Revenue Department’s website.
As a nation that operates on free market principles and ranks as the second most free economy in the world in 2021, New Zealand is a great place for prospective business owners to start their businesses. Economic performance has always been consistently growing and expanding according to The Treasury. With a vibrant culture brimming with opportunities, it is also safe and full of natural resources – New Zealand might just be your next new venture.