Ten Tips: doing business in New Zealand

April 2016



Despite being small and physically remote, NZ is a sophisticated country engaged with the rest of the world, and party to a large number of free trade agreements. NZ topped the 2016 World Bank Doing Business report (ranking 189 economies) for ease of starting a business, protecting minority investors, getting credit and registering property. NZ was listed first in Forbes’ 2016 Best Countries for Business for monetary freedom, investor protection and (lack of) red tape, and second overall. New Zealand is ranked fourth on Transparency International’s Global Corruption Perceptions Index.



Foreign investment is welcome. There are no exchange controls for the transfer of funds into or out of NZ. Consent of NZ’s Overseas Investment Office is required where overseas persons wish to acquire:

  • Sensitive land or an interest in sensitive land (including farm land);
  • Business assets worth more than NZ$100 million; or
  • Fishing quota or an interest in fishing quota.



The four main options for overseas entities wishing to set up a business in NZ are:

  • Register a branch;
  • Incorporate a NZ registered subsidiary;
  • Acquire a NZ registered company; or
  • A limited partnership.

Each NZ company requires at least one director that is, and each NZ limited partnership must have at least one general partner that is, an NZ resident, or an Australian resident who is a director of an Australian company. The decision as to which entity to establish in NZ will be influenced by legal, tax and commercial considerations.



Generally, NZ tax residents are taxed on their worldwide income, whereas non-residents are only taxed on income derived in NZ (tax liability may be reduced by any applicable double tax agreement). Companies are taxed at 28%; individuals are taxed incrementally between 10.5% and 33%.

Unusually, foreign settled trusts with a NZ trustee and only offshore income do not attract NZ income tax and may provide an ideal asset protection regime for high net worth offshore persons.

There is no stamp duty, capital gains tax, payroll tax, inheritance or estate tax or gift duty in NZ.

Goods and services tax (currently 15%) (GST) is a form of value added tax charged on the supply of most goods and services in NZ. There are excise duties on alcohol, tobacco and certain fuels. Import tariffs are imposed on certain goods, subject to relevant free trade agreements.



A mutual good faith obligation is implied in all employment relationships. Employment agreements must be in writing and contain various compulsory provisions. A trial period of up to 90 days may be agreed prior to an employee starting work.

Employees have a number of minimum statutory entitlements, including minimum wage, annual holidays and other leave entitlements. Union membership is not compulsory, however workers have the right to bargain collectively. Mediation is encouraged as the primary means of settling employment disputes.

Generally employment can only be terminated by the employer for cause or in a redundancy, and dismissal must be both substantively justified and procedurally fair.

Superannuation is not compulsory, however new employees are automatically enrolled in KiwiSaver, a voluntary work-based savings initiative with minimum compulsory employer contributions of 3% of the gross salary or wages of any participating employee.

A person who is not a NZ or Australian national requires a visa to work in New Zealand.



NZ’s health and safety legislation applies to all New Zealand workplaces and places duties on employers, employees, principals who have engaged contractors and the self-employed to manage or control hazards.

There is no right to sue for death or personal injuries suffered in NZ, except in limited circumstances. Instead the NZ Government, through the Accident Compensation Corporation, provides a no-fault scheme for compensating work and non-work injuries. The scheme is funded from levies on employers and the self-employed and taxes on vehicle registration and petrol.



Land Information New Zealand (LINZ) runs NZ’s survey and title system which guarantees property rights. Almost all titles, plans and instruments have been converted into electronic format, allowing real-time searching and electronic registration of all land title and surveying transactions. Contracts for the sale and purchase of land must be in writing and signed, and dealings registered electronically against the title.

The use of land is closely regulated. The Resource Management Act (RMA) is NZ’s principal legislation governing the use of NZ’s physical and natural resources. It can have major implications for projects. Any development may require a number of consents, whether under the RMA or other building regulations, before it can proceed.



NZ importers can lawfully import goods subject to intellectual property rights directly from licensed or authorised overseas sources, rather than dealing with the “official” suppliers, licensees or agents in NZ or the overseas manufacturers. Parallel imports are not to be confused with pirated or counterfeit goods, which are prohibited.

NZ’s Intellectual Property Office (IPONZ) is responsible for granting and registering certain intellectual property rights, including patents and trade marks. Once registered, the owner of a trade mark has an exclusive right to use the mark in NZ in relation to the good and/or services for which it is registered (comparative advertising is permitted); patents are granted for up to 20 years. There is limited scope for patenting computer software in NZ.



NZ has a common law system, similar to that in England and a familiarity with most international legal structures (i.e. in the finance and corporate law areas). NZ has a four-level judicial system – District Courts, High Courts, the Court of Appeal and the Supreme Court. There are also specialised Courts and tribunals, such as the Employment Court, Environment Court and the Waitangi Tribunal (a permanent commission of inquiry charged with making recommendations on claims brought by Maori, NZ indigenous people, relating to actions or omissions of the Crown that breach the promises made in the Treaty of Waitangi in 1840). Although the Courts have extensive power to manage the cases before them, generally the Court cannot require the parties to use other dispute resolution methods such as mediation. The Courts do have the ability to conduct judicial settlement conferences aimed at settling disputes under the supervision and with the assistance of a Judge. Mediation and arbitration are popular ways of resolving commercial disputes.



NZ has a small ethnically diverse population. NZ culture assigns high value to fairness, ingenuity and practicality. NZ has a distinctive business culture derived from being a smaller, egalitarian community with a generally informal and non-confrontational style of dealing. Use of first names is usual in business dealings. Because of this culture and the likelihood of crossing paths again, conflicts and differences are often resolved amicably. Business entertaining often involves sporting or social events. In NZ the tipping of hotel staff and taxi drivers is not expected (but is appreciated for exceptional service).



The foregoing is intended for general information only and specific legal advice should be obtained for individual circumstances. We would be pleased to assist you.


You can contact our Corporate Team on:

Mark Lowndes +64 9 373 7286 or [email protected]

Paul Hartland +64 9 373 7703 or [email protected]

Allan McRae +64 9 373 7715 or [email protected]

Mike Whale +64 9 373 7287 or [email protected]

Denis McNamara +64 9 373 7290 or [email protected]

Kerri Dewe +64 9 373 7280 or [email protected]

Jennifer Tunna +64 9 373 7281 or [email protected]

Greg France +64 9 373 7293 or [email protected]


Lowndes is an award winning corporate and commercial law firm with offices in the heart of Auckland and Wellington.  The firm serves local and international companies and investors doing business in New Zealand.

We are recognised for our technical expertise and exceptional client service including high levels of responsiveness and reliability, accessibility of our lawyers, and an unwavering focus on what matters – our clients’ commercial outcomes.