New Zealand’s investment advantage
Safe, stable and secure business environment
New Zealand is recognised globally as being a safe place to invest and do business.
It ranks first in the world for:
- protecting investors (World Bank Doing Business report 2014)
- lack of corruption (Transparency International Corruption Index 2013)
- starting a business (World Bank Doing Business report 2014)
Anti-corruption NGO Transparency International continued to rank New Zealand Number 1 for honesty and integrity in its public sector in 2013, the eighth year in a row the country was either first or first equal in the Corruption Perceptions index.
New Zealand has a strong banking sector that weathered the global economic crisis well. The parents of the four largest banks are Australian-owned and are all in the top 21 of the Global Finance World’s Safest Banks index.
Ease of doing business
New Zealand consistently scores well on the World Bank Doing Business rankings for the ease of doing business here. Incorporating a business in New Zealand takes just one day, while registering a property takes only two. The country has a straightforward, business-friendly taxation system that supports capital development, research and development and international investment.
Cost of doing business
New Zealand boasts comparatively low developed-country business costs. Its labour costs are extremely competitive for a first-world country with a highly skilled and educated workforce.
Simple tax system
New Zealand has a competitive and low-compliance tax system. It is third lowest in the OECD for time taken for taxpayers to comply with tax obligations (World Bank Doing Business, Paying Taxes. Note: the most recent round of data collection for the project was completed in December 2010).
New Zealand’s 2010 / 11 budget reduced its corporate income tax rate from 30 percent to 28 percent.
In New Zealand there is:
- no payroll tax
- no social security tax (voluntary KiwiSaver introduced 2007)
- no capital gains tax.
New Zealand has a recoverable Goods and Services (GST) tax (similar to VAT), and tax-deductible business expenses (including research and development) and depreciation.
Efficient, market-oriented economy
New Zealand has a stable and internationally competitive economy. A wide range of free trade agreements, pro-competitive regulation, an efficient tax code, an open political system and the absence in almost all sectors of import tariffs or Government subsidies, have given rise to an efficient, globally competitive economy that facilitates both domestic and foreign investment.
State-owned enterprises are structured as corporations and compete on an equal footing with private sector counterparts. A free and independent media ensures transparency in the corporate and Government decision-making processes.
New Zealand boasts sound macroeconomic foundations, including:
- a relatively strong fiscal position and a commitment to reduce net public debt to less than 20 percent of GDP by the early 2020s. Read the Government’s Budget Policy Statement 2014.
- legislative requirements to maintain public debt at prudent levels
- being among the top 20 rated sovereigns in the world: Standard & Poors gives New Zealand an AA+ local currency rating, an AA foreign currency rating and an AAA T&C assessment
- maintaining a low-inflation environment for more than two decades; independent monetary policy and a focus on price stability; a long-standing floating exchange rate and no exchange controls or restrictions on repatriation of funds.
Access to other markets
New Zealand’s geographic proximity and extensive free-trade agreements (FTA) provide access to key global markets.
New Zealand currently has FTAs in place with:
Negotiations are under way with India, Korea, Russia, Belarus and Kazakhstan, and New Zealand is a key driver behind the Trans Pacific Partnership.
New Zealand passport holders face fewer visa and other travel formalities than many other nationalities.
Innovative and entrepreneurial culture
New Zealand has produced entrepreneurs with the aptitude to generate new ideas that challenge the expected, having a can-do attitude and an ability to make more from less.
At the forefront is a group of ambitious, high-growth and internationally focused companies. The country’s top 100 high technology companies contributed $8 billion to the economy last year, with over $5 billion of exports in what is a very subdued international market.
There exists in New Zealand a collaborative research and development environment backed by a Government that actively supports science and innovation as one of the core pillars of its formal Business Growth Agenda. New Zealanders are accustomed to and are embracing the country’s fast-growing cultural diversity.
Flexible immigration policies
New Zealand has flexible immigration policies with a range of visa categories in place catering for investors, entrepreneurs and business managers, and active Government support for investment.
New Zealand has abundant water and arable land, and a temperate climate that supports sustainable food production. There is a stable supply of gas and electricity with up to 75 percent of all electricity generated from renewable hydro, geothermal and wind energy. This is supplemented by natural gas produced from local oil and gas fields, which is both exported and refined in-country to meet some domestic transport needs.
Exploration is encouraged in a transparent and pro-investment climate.
Transport and freight
New Zealand has world-class infrastructure across transport, logistics and telecommunications. Most major international airlines serve international airports in seven urban centres across New Zealand.
Over 30 global and regional shipping lines serve privately-run, deep-water ports at internationally competitive stevedoring costs.
The country also has an extensive road and rail transport system and efficient inter-island links.
The Maori economy
Assets owned by Maori are approaching $40 billion in value, and are growing as a new era of tribal cohesion, created in part by new leadership and by redress for historic injustices, is harnessed for economic potential.
Maori iwi (tribal) investors are characterised by long term horizons, social and cultural as well as economic purpose, and concern for the environmental and future consequences of economic activity.
Joint venture developments of natural resources between iwi and private sector investors are increasingly commonplace.
The Reserve Bank of New Zealand supervises New Zealand’s banking system; its main function being to implement Government monetary policy and to maintain financial stability. It also registers and supervises other banks.
The Bank’s monetary policy, defined by the Policy Target Agreement with the Government, is to maintain inflation at between 1 – 3 percent on average over the medium term.
New Zealand has an open door policy on bank registration. There are several major trading banks and numerous other banking institutions. Many big international banks are represented in New Zealand through agents or sales offices.
New Zealand’s telecommunications infrastructure includes international broadband submarine cable systems and competitive onshore mobile networks.
The Southern Cross cable alone delivers 240 Gbit/s of fully-protected bandwidth to the United States mainland, Hawaii, Australia and Fiji. As demand increases capacity can be doubled to 480Gbit/s.
The New Zealand Government has initiated a $1.5 billion programme partnering with the private sector to deliver fibre broadband capacity to New Zealand businesses, health institutions, schools and homes.
4G mobile networks are operating in New Zealand’s main centres, with the extension of coverage to the provincial areas to begin in 2015.