New Zealand is an Island Country located in the Southwestern Pacific Ocean which is closer to Australia. The country is known for being a developed nation and apart from tourism, it is a major destination for business investment. The country is ranked to be one of the most business-friendly nations by the World Bank. In its recent rankings, the World Bank put New Zealand to the first spot in ease of doing business in 2020 which is a parameter that evaluates the ease with which one can do business in a particular country. Being this a reason, the country has attracted huge investment from all over the world.
In result, the country saw a direct foreign investment of $100 Billion in 2015 where most came from Australia, Canada and China. The country also has stood up in many other prospects of business. New Zealand ranked at first spot in starting a business, registering property and getting credit while it stood at the third spot in dealing with construction permits. It stood second in protecting minority investors while it stood at 9thspot in trading across borders.
Forbes ranked New Zealand at second spot in the list of countries for best business in 2018. Similarly, in the prosperity index, the country ranked at 2nd. New Zealand has also been ranked by many other institutes as the best country for doing business and investment at various parameters thus overall it can be said that the country is good for investment when it comes to foreigners.
Now if you are interested to start a business in New Zealand then this country is perfect for you. Despite everything in favor of you, you still need some basic knowledge on how to start a business in New Zealand. This article will serve you as a guide.
Related article – Profitable Small Scale Business Ideas & Opportunities in New Zealand
Starting a Business in New Zealand
As a foreigner, it is important for you that you should travel to New Zealand to get an idea on how you can start a business. Thus the first step you need to take is to acquire a business or investment visa.
Visa for Business in New Zealand
If you are going to start a business or buy a business in New Zealand then the country, in general, offers entrepreneur visas to foreigners. After a particular period of time, you can apply for further extension of an entrepreneur visa or for a residential visa based on your requirements. Here are some more details for applying for visa.
Entrepreneur Work Visa:
This type of visa is of two categories. The first category is the start-up stage while the other is the balance stage.
- Start-up Stage: In this, subject to the approval of your application, you will be granted 6 months of stay in the country if you are buying or starting a business in New Zealand.
- Balance Stage: After you have proved that you have taken concrete steps to start and grow your business then you will be granted another 24 months of stay in the country.
Criteria to get Visa:
- A minimum investment of NZ$100000 needs to be made excluding working capital.
- Need a minimum of 120 points that includes points of success of business and how it is beneficial to New Zealand.
- You need to show clean records of your previous business that includes bankruptcy, fraud, and failure of business, character, and health.
Residential Visa for Entrepreneurs
New Zealand also permits residential visas for people who want to settle down in the country for business purposes. There are two categories of residential visas. They are:
- Residential visa for two years: to get this visa you need to show that your business is doing great and you are employed here for at least two years and your business has a significant contribution to the country.
- Residential Visa for 6 months: You can get 6 months of residence needed you have to invest NZ$500000 in your business as an investment and have to provide at least 3 permanent jobs to NZ citizens or residents.
For both the category, English, health and character tests are mandatory. The visa holder can also issue visa for their partner and kid by filling an application.
Starting with your Business Structure
As you have made your mind to invest in New Zealand it is obvious that you would have decided what kind of business you will invest in. There are basically three types of business forms that operate in NZ and they are:
- Sole Proprietorship
- Limited Liability and
As the term suggests, a sole trader is the one who manages the business on its own and he is the only owner of the business.
A partnership business is one that is run by more than one person in partnership and all of them have their stake in the business.
The last is limited liability, which means that the owners have limited liability only to the number of shares they hold unless they have guaranteed. It is the most successful form of business.
Who can do Business in New Zealand?
Here is the list of people who can do business in New Zealand:
- Anyone who has the freedom and right to live in New Zealand unless your visa has restrictions
- Anyone who holds an entrepreneur work visa also known as long term business visa
- People who hold asylum seeker/refugee work visa with open work conditions
- Holders of partnership work visa
- Holders of post-study work visa
- Those who hold working holiday work visa unless if it is restricted by some conditions. It would be advisable that they do not invest until their visa is cleared
Register your Business: Steps and Guidance
As you know who can do business in New Zealand, how to apply for visa, what type of business can you register? Let us now move to register your business. Register your business as you find yourself suitable in the category mentioned above. Find out all the information that is relevant to your business. Here is a small basic guide for starting your business.
Do Feasibility Analysis of your Business
When you are doing foreign investment staking a lot of money in foreign land you should be confident that your business should work. For this, you need to carry out a feasibility analysis test that is done by people expert in this profession.
A feasibility analysis report carries all the relevant information related to your business. Based on your input that carries your business profession, place of business, capital investment and some other info. The report will give a summarized detail about your business. Guidelines related to your business, some advice, pros and cons for your business. Profit, return on investment, caution and a fine blueprint. After you get your report you need to create your business plan.
Business Plan and its Implementation
Based on your report, you need to outline your business plan and then implement it. Make your plant closer to reality and facts and not ideal conditions that generally do not work in the business. Get your business plan to create by some experts who have basic idea about doing business in New Zealand. As it is made you can implement it on ground.
Well, this article won’t touch on another process of starting your business like getting employees or setting up your business but one thing that needs to be added is fine legal advice. Hire some advisors or promoters who will do the real job. Though doing business in New Zealand is easy yet you need an expert who can advise you on issues related to law and business.
Hire experts who are well to do with the particular type of business you are entering and legal prospects like registration, payment of tax, license, permission, etc.
Some other Factors in Business
There are some other factors that need to be noted while you do business in New Zealand. Here are they:
Get your New Zealand Business Number:
NZBN is a unique number assigned to business entities to make sharing of information easier like your basic details. This unique number helps in doing business with companies and ensures that your business remains unique with this number. Get yourself registered and get a number.
Register for Taxation:
If your business earns more than NZ$60, 000 every year then it needs to get registered as a taxpayer. GST stands for Goods and Services Tax, a tax structure in New Zealand by which tax is levied on business houses, goods and services.
Apart from this, do other stuff as well that includes getting your business name registered, your trademark, your logo, etc. You may also need to:
- Have a bank account number to link with your company
- Insurance for the company
- Hiring employees and registering them based on rules and regulation
- Adopting standard rule of conduct, getting permits wherever necessary
For starting a business in New Zealand you also need to have sufficient information about the country and its business structure. You can get some good information here. You can as suggested earlier can take help of local promoters, advisers, tax consultants, legal advisors for other such help related to your business. For more information click here.
Capital Investment, Return on Investment and Profit
These three terms sum up the business you do and what you will get from it. While investing be vigilant to ensure that you don’t make a lost deal. Take good advice from experts on investment and do not invest high amount but do it in installments based on the merit of your business and its chance of success. Based on the type of business you are doing you will get a return on investment mostly as per your business plan or few times later. As a business, it should first focus on its customer and only later on return. Yet be vigilant of returns and do good homework to maximize your return. Profit will depend on the success of your business.
Why you should be doing business in New Zealand?
Being a foreigner of a respective country where you can easily start your business. Why then take the trouble of visiting New Zealand, working hard to do the above things and then waiting for profit? Here are some top reasons why you need to start your business in New Zealand.
- NZ stands at first when it comes to doing business. No country in this world matches NZ when it comes to starting and executing a business with ease. The ease with which you do business depends on many factors.
- Bestowed with Advancement: The country is bestowed with advanced tech support, digital support, and secure database. Along with that, there is a favorable atmosphere for the security of the business.
- There is not much or in simple terms, hardly any barriers in your way when you start your business. You don’t need to face the wrath of corrupt and slow bureaucracy nor need you to face restrictions from the government.
- The country’s infra is extremely good to support your business. It offers an uninterrupted supply of power with well-built roads and structures. There are business hubs and infra made especially for businesses.
- Another glitch that businesses face is high labor and work cost. Places like New York have huge charges of laborers and employees which makes the profit margin go low. In New Zealand, there is not much inflation.
- Lastly, the country has an atmosphere for business. Unlike many countries where businesses are seen as devils for the poor, New Zealand is a country that is basically capitalist in approach and supports businesses understanding their importance.
If you have read it till now then one can assume that you have understood the basics of how to start a business in New Zealand. Well, this information is not enough to make you start your business but it is sufficient enough to get you a glimpse on how to start a business in NZ.
Adding more, here are some basic questions that always come to the mind of a person interested in starting a business in New Zealand. Hope this article suffice your expectations.