How to set up a business in New Zealand
New Zealand is ranked as one of the best countries in the world to start a business in. Indeed, for several years in a row, the country ranked number one in the world for ease of doing business.
Many start-up companies and inventions worldwide have Kiwi origins. At heart, New Zealand is a country that encourages entrepreneurship and supports small businesses, including those founded by individuals from overseas. The government provides various resources and support for businesses, including grants, loans, and business advice, which are also available to entrepreneurs from overseas.
In addition, the business environment in New Zealand is generally favorable for entrepreneurship, with a stable economy and a business-friendly regulatory environment. The country has a strong focus on innovation and encourages businesses to adopt new technologies and approaches to improve productivity and efficiency.
Of course, it is important to note that starting a business in New Zealand as a foreigner may involve additional challenges, such as navigating visa requirements and cultural differences. It is a good idea to research the specific requirements for starting a business in the country and to seek the advice of a legal or financial professional if necessary. Unfortunately, it's not as simple as flying over and just starting your business – you will need a specific visa in order to work in New Zealand, even as a self-employed person. But if you have an idea that will boost the economy and the financial investment to start it, then you will likely be welcome.
Business visas in New Zealand
Already in New Zealand
If you are already in New Zealand on a visa that allows self-employment, you can start your business and then convert to an Entrepreneur Resident Visa after six months. If you have been running your business for less than two years when you apply, you will need to prove you have invested at least $500,000 worth of capital and have created a minimum of three New Zealand-based jobs. This visa is indefinite.
Entrepreneur Work Visa
To either start your own business or purchase an existing business, you can apply for the Entrepreneur Work Visa. To qualify for this visa, you will need a thorough business plan that is not more than three months old, score at least 120 points on the Entrepreneur Work Visa scale, and make an investment of NZ$100,000. If your business is science or ICT-related, or has exceptional innovation or exporting capacity, then the capital requirement can sometimes be waived. This visa gives you an initial 12-month period for the start-up phase of your business, then an additional 24 months after you prove your business is set up and running. After that period, you can go on to apply for the indefinite Entrepreneur Resident Visa if you qualify.
Investor Visa
This type of visa is for individuals who are looking to invest in a business in New Zealand. To be eligible for this visa, you must have a minimum investment of NZ$ 1.5 million, which must be invested in a New Zealand business or investment fund.
Long-Term Business Visa
This type of visa is for individuals who are moving to New Zealand to establish a new business or invest in an existing business. To be eligible for this visa, you must have a genuine intention to develop a business in New Zealand and be able to demonstrate that you have the necessary skills, experience, and financial resources to do so.
The Edmund Hilary Fellowship and Global Impact Work Visa
The Edmund Hillary Fellowship (EHF) is a program that was established by the New Zealand government to attract and support entrepreneurs, innovators, and impact leaders from around the world who have the potential to make a positive impact on the New Zealand economy and society.
The EHF is a merit-based program and is open to individuals from any country. To be eligible for the EHF, applicants must have a track record of innovation, leadership, and impact in their field, as well as a feasible plan to create a positive impact in New Zealand.
The EHF provides successful applicants with a range of support, including access to a network of mentors and advisors, access to funding and resources, and the opportunity to collaborate with New Zealand businesses and organizations. It also provides successful applicants with the opportunity to apply for a Global Impact Work Visa, which allows them to work and live in New Zealand for up to 36 months.
The Global Impact Work Visa is a new visa that was introduced in 2017 as part of the EHF program. It is designed to attract highly skilled workers and entrepreneurs who have the potential to make a positive impact on New Zealand's economy and society. To be eligible for the Global Impact Work Visa, individuals must have a job offer from a New Zealand employer in a high-demand occupation or field, at least three years of relevant work experience, a minimum of a bachelor's degree or higher qualification in a relevant field, and meet the required English language proficiency level. Applications for the EHF and GIV were paused in 2020, but they may resume in the future.
Other options
In addition to these visas, there are also several other types of visas that may be available to individuals who are looking to start a business in New Zealand. These include work visas, employer-assisted work visas, and work-to-residence visas. To apply for a business visa, you will need to provide evidence of your business plans, including a detailed business plan and financial projections. You will also need to meet certain health and character requirements.
It is important to note that business visas, work visas, and other types of employment-related visas are subject to specific conditions and restrictions. For example, individuals with a business visa may not work or receive payment while in New Zealand unless they have obtained a work visa or other type of employment-related visa. If you are planning to start a business in New Zealand, it is important to carefully research the different types of visas that are available and choose the one that best meets your needs. You should also consult with an immigration lawyer or a licensed immigration adviser to ensure that you have the necessary documentation and meet all of the requirements for obtaining a business visa or other type of employment-related visa.
How to set up your business in New Zealand
Once you have your New Zealand visa sorted out, there's a checklist you will need to follow to get your business set up:
Determine the type of business you want to start
The first step in starting a business in New Zealand is to decide what type of business you want to start. Consider your interests, skills, and the market demand for your products or services.
Create a business plan
A business plan is a detailed document that outlines your business goals, target market, marketing and sales strategies, and financial projections. It is a useful tool to help you stay organized and focused as you start your business.
Choose your business name
Use ONECheck to see if the name is available.
Choose a business structure
It can be a sole trader, a partnership, or a company. Each structure has different benefits and considerations - and different ways to be registered with the government.
Get a RealME login
This is a universal login that is used by several different government agencies, including the IRD.
Register your business
Once you have chosen a business structure, you will need to register your business with the Companies Office and the Inland Revenue Department (IRD). This will involve completing various forms and providing information about your business. You can register for a GST number at the same time.
Obtain any necessary licenses or permits
Depending on the type of business you are starting, you may need to obtain various licenses or permits. For example, if you are starting a food business, you will need to register with the Ministry for Primary Industries.
Set up a business bank account
It is a good idea to set up a separate business bank account in New Zealand to keep your personal and business finances separate.
Register your trademark with IPONZ
The Intellectual Property Office of New Zealand (IPONZ) grants and registers IP rights in New Zealand. You can use the website to apply for your own trademark as well as to search existing trademarks, patents, and design.
Things to be aware of when starting a business in New Zealand
Starting a business in New Zealand differs from starting a business in other countries in a number of ways. Here are a few key differences to consider:
Market size
New Zealand has a smaller market compared to some other countries, which can affect the potential scale of your business.
Government support
The government in New Zealand provides various resources and support for businesses, including grants, loans, and business advice.
Business structures
There are several different business structures to choose from in New Zealand, including sole trader, partnership, and limited liability company. Each structure has its own benefits and drawbacks, and it is important to choose the one that best fits your needs.
Legal and regulatory requirements
There are certain legal and regulatory requirements that apply to businesses in New Zealand, such as registering with the Companies Office and obtaining necessary licenses and permits.
Costs of starting a business in New Zealand
- Business registration fees (NZ$ 130-150)
- Legal fees for drafting and reviewing contracts and agreements (NZ$ 2,000-3,000)
- Accounting fees for setting up bookkeeping and financial reporting (NZ$ 1,000-2,000)
- Premises rent or purchase costs (vary depending on location and type of business)
- Equipment and inventory costs (varies depending on the type of business)
- Marketing and advertising expenses (vary depending on marketing strategy)
Taxes for business owners in New Zealand
In New Zealand, businesses are subject to several types of taxes. These include GST, a value-added tax of 15% that is applied to most goods and services sold in New Zealand.
Businesses are also required to pay income tax on their profits. The corporate tax rate for most companies is 28%. Employers are also required to deduct and pay payroll tax, which includes social security taxes, health levies, and other contributions.
Cultural differences
Starting a business in a new country may also involve navigating cultural differences, such as different business practices and communication styles.
Best sectors for starting a business in New Zealand
There are several industries that have experienced significant growth in recent years. Here are some of the most promising fields for starting a business in New Zealand:
Information technology (IT): The IT industry in New Zealand is growing rapidly, with a range of innovative companies and startups emerging. The sector covers a range of areas, from software development and cybersecurity to artificial intelligence and cloud computing.
Tourism and hospitality: New Zealand is known for its natural beauty and adventure tourism, which makes it an attractive destination for international tourists. The country's hospitality industry is also growing, with a range of high-end restaurants, cafes, and bars opening up across the country. Though the Covid-19 pandemic hit this sector hard, and it's been a slow couple of years, things are returning to normal and steady growth is expected.
Agriculture and food production: New Zealand is known for its high-quality agricultural products, including dairy, meat, and wine. The country's food production industry is also growing, with a range of innovative food and beverage companies emerging.
Creative industries: New Zealand has a vibrant creative industry, including film, music, and design. The country's film industry, in particular, has experienced significant growth in recent years, with a range of international productions being filmed in the country.
Renewable energy: New Zealand is committed to transitioning to a low-carbon economy, and there are many opportunities in the renewable energy sector. The country has significant geothermal, hydro, and wind energy resources, which can be leveraged to create sustainable and innovative energy solutions.
These are just a few examples of the most prominent and successful fields for starting a business in New Zealand. However, it's important to note that starting a successful business requires careful planning, research, and hard work. It's also a good idea to seek advice from local business experts and mentors to ensure that your business has the best chance of success.
New Zealand success stories
Though the to-do list for getting your business off the ground in New Zealand may seem long and complex, the payoff can be outstanding. There are several well-known startups that originated in New Zealand that are now world leaders. A few examples include:
- Xero: Xero is a cloud-based accounting software company that was founded in New Zealand in 2006. The company has since grown to become a global leader in its field, with millions of customers worldwide.
- Trade Me: Trade Me is an online marketplace that was founded in New Zealand in 1999. It is the largest online marketplace in the country and has a strong presence in Australia as well.
- Rocket Lab: Rocket Lab is a space launch company that was founded in New Zealand in 2006. The company has developed a unique and cost-effective approach to launching small payloads into orbit and has launched a number of successful missions.
- Weta Digital: Weta Digital is a visual effects company that was founded in New Zealand in 1993. The company has worked on a number of high-profile films, including the Lord of the Rings trilogy and the Hobbit trilogy.
- Vend: Vend is a cloud-based point-of-sale and retail management software company that was founded in New Zealand in 2010. The company has since expanded to serve customers in over 150 countries around the world.
