New Zealand is a favorite tourist spot because of its beautiful landscapes and welcoming people. Native New Zealanders know their country is also an excellent place to start a new business. In 2019, Forbes magazine voted New Zealand as the 5th “Best Country for Business”, surpassing the United States and Japan.
New Zealand earned this well-deserved designation for the last few years because of its financial incentives, open market, low corruption, and regulatory deftness. Each of these characteristics can be attributed to its uncomplicated regulatory processes and few restrictions on establishing and operating a business.
In addition, business people find there’s a broad network of technological and physical infrastructure to support their corporate dreams. Even foreign entrepreneurs are thrilled by New Zealand’s convenient and simple online procedures for setting up a new company. In fact, a foreign investor can incorporate a new business in just a few hours.
Business Opportunities Worth Exploring
New Zealand provides opportunities for all varieties and sizes of organizations. Even existing companies looking to expand their distribution channels or grow their market share will find New Zealand to be a beneficial outpost. From year-to-year, the biggest industries within New Zealand are frequently agriculture, horticulture, forestry, mining, and fishing.
Your business idea may not be about New Zealand fishing or forestry but rather something that best matches your skill set, personal goals, and overall interests. To further develop your initial idea, you’ll need to spend some quality time researching, analyzing, and refining the concept. This means doing plenty of market research to better understand the customers, costs, and risks associated with your company. .Other important areas to explore include financial funding, marketing strategies, and product development.
Once all the necessary homework is complete and a business plan is written then you can move forward with the following action items.
Item 1: Get A Work Visa
If you’re a foreign business person then your first step is to secure a work visa. Specifically, you can apply for New Zealand’s “entrepreneur work visa” depending on how close you are to rolling out your business.
For people planning to launch their company in the near future, a six-month work visa may be the best option. Once your company has been successfully launched, you can apply to stay in New Zealand for another 24 months and look after your business. However, you must keep in mind, to have your work visa extended then you’ll be asked to satisfy three criteria.
First, you’ll need a minimum of NZ$100,000 in working capital. Next, New Zealand uses a grading system that determines the success of your business and what it contributes to the country. It’s necessary for your business to have 120 points (minimum). Lastly, it’s critical your company has a clean record without any fraud or other criminal activity.
What If I Already Have My Visa?
Another option is for foreigners to secure a residential visa as long as the applicant plans to settle in New Zealand with the purpose of running a company. However, you should keep in mind, this type of request comes with a more demanding approval process then a work visa does.
Residential visas have two-time frames: up to six months or two years. Besides passing tests regarding your health, character, and language, authorities will also want to know if you’ve been working in the country for at least two years. You’ll also have to prove your company is operating well and has provided national economic benefits. If you are able to pass all of these checkpoints, then a 2-year residential visa will be granted.
On the other hand, if you aren’t able to meet these criteria then it’s best to apply for a six-month residential visa instead. This short-term visa requires your business has NZ$500,000 in the capital and supports at least three NZ citizens/residents working as permanent employees.
Step 2: Design A Business Structure
You’ll also need to decide which business structure will be best for your business. Sole proprietorship, limited company, or a partnership are popular options. Each of these business structures has both pros and cons. As a sole proprietor, you can enjoy the easiest set-up and be fully entitled to keep all your business profits. Although that can be very appealing, keep in mind you’ll also take on all the risks and not get the chance to rely on another partner’s expertise.
Selecting a limited company design puts a limit on your personal liabilities up to the initial amount of your investment. Yet the formalities and regulations associated with a limited company can be considered too restrictive and bothersome.
Besides the three corporate forms we already explored, there are a few other possibilities like buying into a franchise. As a foreign investor, investing in an already established and successful business brand can be a lot less risky than starting from scratch.
Step 3: Pick A Business Name
All the corporate and financial paperwork will require you to include a business name. To make this step easier, the government of New Zealand offers a free online naming tool called ONECheck. For entrepreneurs, like yourself, it’s so simple to verify through this online database whether your proposed business name is already being used by another company. By using ONECheck upfront, you’ll save yourself a lot of time and aggravation.
Once you’re inspired by the right business name, then it’s important to register the company name with New Zealand’s “Companies Office” so no one else snags it.
Step 4: Use RealMe Services
It’s always beneficial to set-up a RealMe login that can be used to access many New Zealand business services, all from one user name and password.
Many Kiwi government agencies recommend using the RealMe login platform. You can do so for a variety of items like registering your company, managing your Inland Revenue tax account and banking accounts, or filing trademarks and getting export certificates.
If you’re a foreign entrepreneur, then it might be helpful to get a personal RealMe login for yourself. By doing so, you can use RealMe to keep up on your visa, vehicle registration, and rental property.
Step 5: Open A Business Bank Account
Opening a business bank account is critical to keeping your funds organized and establishing financial records. Imagine if you decided to mix your personal and corporate expenses together. That may seem easy enough at the beginning of the business but once you need to filter out business expenses or account for spending then you’ll find it to be quite complicated. Using one dedicated business account will make record-keeping and tax filing so much easier.
Contact a local Kiwi bank and ask about the documents needed to set up a new business account.
Step 6: Understand Your Legal Obligations
As is common in most countries, New Zealand has regulatory rules that you’ll have to understand and follow.
New Zealand Business Number (NZBN)
You’ll need to register your company with the government and get a free New Zealand Business Number (NZBN). This is a code assigned to each New Zealand business and is helpful when other companies want to work together. For example, if another company is in need of your services or goods, they can easily look up your NZBN and get in touch. All your organization’s basic information like trading name, address, phone number will show up in the NZBN procurement database.
Protect Your Brand
An exclusive brand identity is essential to the growth of a business. Not only is a unique brand critical to your own company but other business owners feel the same about their brands. So it’s your responsibility to perform due diligence and make sure your brand (e.g. name, logo, tagline) are one-of-a-kind and registered. Also, registering a website domain name is another way to safeguard your company’s brand identity.
Get the Correct Licenses and Permits
Each Kiwi city can have its own particular regulatory systems for new businesses. You’ll want to check out the rules and regulations of your local council to make sure your company is in compliance. Besides any basic business licensing and permitting prior to opening your business, you’ll need to check into any other ongoing requirements you’ll need to meet.
Fulfill Tax Burdens
If your company earns more than NZ$60,000 annually, you’ll be expected to register for the Goods and Services Tax with the Inland Revenue Department. Keep track of all the tax filing deadlines to avoid paying any extra fines. The NZ Inland Revenue Department website has many instructional videos and tax workshops for entrepreneurs, including foreign investors.
Six simple steps are the basic guide to establishing a New Zealand business. However, as a business owner, you should consider purchasing business insurance to protect your assets from unexpected events. Check this site to learn more about business insurance in New Zealand.
As Forbes magazine already shared with the world, New Zealand is consistently one of the top countries to launch a new business. The country offers a wonderful open market with low corruption, easy regulatory requirements, and some financial incentives.