New Zealand is a small isolated island and the youngest existing country in the world. It has a small population of about 4.56 million and the country is composed of two islands that are the South and North Island. Starting a new business is very easy in New Zealand
New Zealand is full of many business opportunities both for the locals and immigrants. The country is quite stable and the economy there is growing fast thus a good place to run a business. Some of the areas that are really flourishing in New Zealand when invested on are; tourism, biotechnology, ICT, agricultural research, education, film production and wood-based technology. Most businesses here are small businesses and there are plenty of opportunities.
In 2015 in the HSBC Expat Explorer survey, New Zealand was named number one when it comes to entrepreneurship worldwide.
By nature, New Zealand is a scenic place covered with beautiful beaches, splendid mountain ranges, natural forests and a homey climate. This makes the Island attractive to tourists, and who doesn’t want to spend their holiday in a serene, beautiful place like New Zealand
Step by step procedure of how to start a business in New Zealand
In New Zealand, one can either start a new business, buy a business or transfer your business there. However, in this case, the focus will be on starting a new business and below is the step to step procedure of how to do it.
Ensure that your business idea is feasible
When starting a business you need to be sure that your business idea is going to work. At this point, drafting a business plan is important, in which you will compile your business and draft the vision you have for the future of the business.
Choose a name for your business
Once you identify a name you would like to use on your business, use the free ONECheck tool to check whether it is owned by another company, website or trademark. This ensures that you have the power to protect your business name since it’s not being used elsewhere in New Zealand. Starting a new business in Newzealand is different from starting a business in USA or starting a business in Denmark
Identify a business structure
starting a new business is very easy in New Zealand
Depending on the nature and purpose of your business, and many other factors, you can be able to select a structure that fits you best. This can be a company, sole trader or partnership, with each structure having a varying degree of responsibility and control as well as registration procedures.
Since most government agencies use the RealMe® login, a New Zealand government trademark, to make registration, it is always good to get a login as it makes other proceeding processes easier.
Make your business name secure
After checking your business name with the ONECheck tool, you will need to register a domain name from authorized registrars, whose names are listed in the Domain Name Commission.
For the case of a company, reserving the company name at the companies office is necessary. The process is cost-effective, fast and simple. All that will be required of you is the RealMe login. After making a reservation, the name must be used to incorporate the company within 20 working days.
Before applying for a trademark, get the initial assessment report from IPONZ, by visiting IPONZ website and applying online for an SPA report. This is free and ready within 5 days.
Look into regulations
Depending on the industry and region, specific regulations are likely to apply, thus worth checking. Do this on business.govt.nz as well as central government regulations. Also, ensure you get the necessary licenses for your business.
Register your company at companies office i.e for the case of a company structure.
Make a registration with Goods and Services Tax (GST).
Any business making over NZ$60,000 annually need to be registered with Inland Revenue, GST. Also, register as an employer in case you plan to have employees.
Trademark registration to ensure that your business is fully protected in the market.
Starting a business as a local and as a foreigner in NewZealand
Starting a new business is very easy in New Zealand and is probably one of the most excellent ideas one may have. The country is loaded with hundreds of business ideas for both locals and immigrants.
Once one has a business idea, it is always wise to do thorough research on it to evaluate the chances of its success. While starting a business is all about risking, having the right information and some assurance concerning that particular business picking up are important.
Another thing worth to consider when investing in a business in New Zealand is understanding the area. Definitely, not all locations are suitable for a particular business, and getting a strategic place for your business is a step closer to its success. Whether a local or an outsider, the procedural steps in part 2 above are applicable and a necessity.
However, when it comes to outsiders who want to do business in New Zealand, accessible funds for the business operation and an Entrepreneur Work Visa are required. With all these put into consideration, New Zealand is the best and easiest place for investors to do business, with limited regulations and restrictions to outsiders.
Tax implications of starting a business in New Zealand
Needless to say, tax matters can be sensitive and capable of complicating a business if not looked into keenly and early enough. In New Zealand, the business structure you choose is one of the determining factors of the amount of tax to pay. The tax payable is based on the net profit and the tax returns are supposed to be submitted every year.
For the case of a sole trader, one is personally liable for making the business taxes and registration is not a must. A partnership is however different in that after the partnership distributes the income to the partners, every partner makes tax payment from their own share.
The highest income tax rate in New Zealand is 33% while 28% is the highest corporate tax rate. Other applicable taxes are environmental taxes and good and services taxes. The Inland Revenue Department is responsible for taxation matters and making registration with them is a must.
What is the success rate to start a business in New Zealand
The larger portion of New Zealand business market is composed of SMEs which are around 97% of all the businesses there. This is according to the report released in 2014 by the Ministry of Business, Innovation, and Employment. It was also realized that most of these businesses especially them with less than 20 employees have a limited survival rate compared to the larger ones. The sad bit being Something that facilitated the death of these brilliant and innovative businesses, was the lack of mentor-ship and business knowledge required for the daily running of a business.
To start a successful business in New Zealand it is important to have a proper plan, mentorship, and understanding of the business venture, which is the recipe used by those successful businesses there.
What is the structure of the national laws in New Zealand and are they favorable for business
As mentioned earlier, New Zealand is very open and indiscriminative to foreign investors and have limited restrictions on them. Their government and major political parties have ensured that there is a sound rule of law, a transparent economy and corruption is intolerable.
Amendments have been made to the financial market Authority to ensure that the foreign investors are more confident. Investors can make investments in almost any economic sector with no control or ownership, neither restrictions for capital inflow or outflow. Their legal framework are well developed and their judicial system ensures that contracts are not violated.
There have been promotional amendments made on the Media and Entertainment sector, which were effected as from April 2014.
However, limitations on large-scale farmland purchases from foreigner have been put in place. There are also foreign investments under certain criteria that require screening. Such investments must show certain characteristics.
All the same, New Zealand national law designs have been very friendly to entrepreneurship for both the locals and foreigners. The government has done much to ensure that they are accommodative to as many foreign investors as possible.
Pros and cons of having a business in New Zealand
There is literally nothing and nowhere, without its set of positivities and negativities. Running a business in New Zealand is not an exception to this fact.
- Limited regulations and restrictions and one can almost invest in any sector.
- New Zealand is very safe and secure which is very elemental for a business. There are limited fatal crimes and violent conflicts.
- With its beautiful nature, relaxed environment, and good climate, many tourists are attracted to the place, thus business is likely to flourish.
- People, there are very friendly. This makes getting necessary information about the area of investing as well as doing business with them is quite simple.
- The labor regulations in New Zealand are very flexible creating room for a dynamic market.
- It is an open market.
- fund movement in New Zealand is not restricted.
- It has very little corruption if any.
- If a business under sole trader structure is doing so well, there are chances of being put in higher tax brackets.
- Due to the small population and the locals non-exaggerated nature, businesses in certain fields may not do so well and perfect workforce in such fields may also be limited.
- Houses are expensive to rent including business offices and shops, especially in Auckland.
- Due to the isolation of the island from the rest of the world, traveling overseas and importing goods is very expensive.
- The high cost of living.
Example of businesses one can start in New Zealand
As Starting a new business is very easy in New Zealand, so just like many countries do have economic sectors that are more relied on, New Zealand to has a number of industries that are more relied on. Such industries include agriculture, tourism, fishing, and forestry. There are also others that are picking up very fast, such as biotechnology, Film making industry, information technology, education, hotel industry, recycling, retail business, maintenance services, electronics and tech devices, food and snacks processing, wine making, online marketing, yacht making, among others.
With investors flocking into New Zealand to venture into various businesses, they are definitely going to need some help to settle down. Starting a business solution office to offer marketing services, development of business plans and consultation services, would be such a great deal.
In New Zealand, dental services are extremely expensive not to mention the need for other health solutions. Opening a business offering health solutions and dental services is likely to do extremely well.
The demand for agricultural products in New Zealand is very high thus great opportunities for any agricultural venture such as growing vegetables and fruits, beef, poultry and dairy farming.
There is a large, ready market for technology devices there, thus one can import them.
Benefits of starting a business in New Zealand
Stating a business in New Zealand comes with lots of benefits such as limited restrictions, open market, efficient and open regulations, competitive economy, high success rate and many more. These benefits can be grabbed as we already knew that the government of New Zealand is taking at most efforts for new business. Govt wants to put a slogan to business world,which could be seen something like ” Starting a new business is very easy in New Zealand”
Labor Laws in New Zealand
The labor laws in New Zealand are derived from the Act of Parliament and the common law. It is them that do set up the minimum code for the employees in New Zealand.
In New Zealand, most employees work under an employment contract that is of an indeterminate duration. For the contract to be terminated, there must be a justifiable reason. The employment agreement must have an expiry date, which should not exceed three years.
Though the normal working hours are 40 hours per week. An employer and employee can agree to the working hours and overtime compensation.
An employee is entitled to a paid leave of 3 weeks every year. Special leave is also allowed.
Unpaid parental leave is entitled to both father and mother after a child birth of adoption. Maternal leave is normally up to 14 weeks while paternal leave is a maximum of 2 weeks.
The labor law also covers issues of the minimum wage applicable, trade union regulations, equality, issues of strikes plus others.
Chances of starting semi-online business in New Zealand
New Zealand is fast growing in technology and online business is easy and possible there. However, just like any other business, you need to adhere to the tax obligations, especially if you are a regular seller. It doesn’t matter whether you are doing the business semi-online or fully online, what matter is how frequently you sell. However, a one time sale is not taxed.
The ease and effectiveness of starting a business in New Zealand cannot be overemphasized. It is one of the best places to start a business and that is a fact and Starting a new business is very easy in New Zealand
Here are some links that may give more guidance when opening a business in New Zealand.
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