5 Tips for Entrepreneurs Doing Business in New Zealand

New Zealand is consistently ranked one of the best countries in the world to do business. It’s also the third freest economy in the world, and has experienced positive economic growth for 33 out of the last 35 years.

Its stable political environment welcomes foreign investors and businesses, and its multicultural society makes for a diverse, highly skilled business environment to start your commercial operations.

Regardless, make sure you enter the South Pacific business environment prepared. Know your obligations as a business and employer, read up on local and business customs, and take note of your opportunities to expand abroad with New Zealand’s international connections.

Take these five tips with you as you set up in New Zealand to ensure that you get the best start possible for your business.

Pick the entity best suited for your business

Take the time to understand what business entities are available for you, and which one best suits your intended operations. Decide whether you’re registering a branch, incorporating or acquiring a New Zealand-registered company or subsidiary, or forming a limited partnership.

You can choose from three types of New Zealand companies: Limited Liability Company (LLC), Co-operative, and Unlimited Company. Legal, tax and commercial requirements differ between each business entity. Putting on a scale the pros and cons of each business structure before you go ahead, will save you a lot of time and unwanted legal or financial situations in the future.

Do your homework: local market and laws

It’s common knowledge that successful business models are borne of careful market research. But there are a couple of specific considerations entrepreneurs need to keep in mind when doing business in New Zealand.

Thankfully, New Zealand’s ranking as the top country in the world to do business isn’t just hearsay. New Zealand is foreign-investor and -ownership friendly, and as such provides a hefty amount of institutional support for new businesses. Statistics New Zealand and the New Zealand Treasury are both helpful places to visit to get an in-depth look at the local economy and business prospects.

In terms of visas, you have a number of options available for you to operate in the country. You can choose your visa according to your desire to start a business, or if you’re looking to hire foreign employees.

In any case, New Zealand will require proof that as a foreigner, you and any foreign employees have a skillset that will be beneficial to New Zealand’s economy. Remember that if you’re hiring employees, you need to be aware of some requirements for employees under New Zealand’s labor laws.

Cultural considerations

New Zealand is a multicultural society whose diversity breeds openness, tolerance, and acceptance. While English is the de facto official language spoken most often, expect to encounter languages from all over the world on the street and in the office frequently. As a fact, special accord and effort is put into the promotion and maintenance of the indigenous culture, Te Reo Māori.

Generally speaking, New Zealanders or ‘Kiwis’ are friendly and trusting. They value fairness, practicality, ingenuity, and emotional restraint.  Interpersonally, Kiwis can be somewhat reserved in the early stages of developing a social or working relationship and relax over time.

Social and work culture in New Zealand is quite informal compared to other parts of the world; ‘smart casual’ is the catch-all dress code for many workplaces and social events. New acquaintances typically greet each other with a handshake, and friends may hug. Beyond this, though, Kiwis aren’t very tactile, so make sure to respect their physical space.

Business dynamics

With the above in mind, the local business environment is fairly informal and egalitarian. Status in job titles goes largely unacknowledged. People address each other on first name basis and value information-sharing and input of ideas and feedback, regardless of rank.

There’s no place for emotion and ‘beating around the bush’ sensitivity in the workplace; use facts and figures and direct language when working with Kiwis, and expect to receive the same. A New Zealander’s frankness should not be interpreted negatively. Honesty is the best policy among your Kiwi counterparts.

By that notion, don’t expect to engage in haggling in business negotiations. Be realistic with your expectations in order to maintain New Zealanders’ attention and respect.

Utilize New Zealand’s global connections

New Zealand is heavily dependent on its preferential trade connections to do business. As a small island nation, its isolation is both a great strength and crippling hindrance to economic growth.

Due to its geography and self-sufficiency, New Zealand stayed relatively insulated from the 2008 global financial crisis. However, without substantial trade connections, the country’s incredible productivity would go to waste, and economic growth would slow to a standstill.

Make the most of New Zealand’s myriad free trade agreements, spanning several continents. Australia, China, Hong Kong, Malaysia, Singapore, South Korea, Taiwan, and Thailand make up New Zealand’s clutch of bilateral agreements. Multilaterally, New Zealand has trade deals in force with the:

·      Trans-Pacific Economic Partnership

·      Association of Southeast Asian Nations

·      Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

A number of FTA negotiations are also underway (the European Union, Mercosur, and Gulf Cooperation Council are a few examples), expanding New Zealand’s reach across the world.

Finding a way to connect your business with the markets of New Zealand’s international partners will greatly add to your commercial success. To ensure you get the best start to your operations, it’s wise to consult a local partner to get help with compliance and legislative requirements as you move into new territory.