Starting a business in NZ as a foreigner.

New Zealand may be the place to go if you’re a foreign investor looking to expand globally.

Invest New Zealand, a government initiative, is keen for more foreigners to open businesses in its country. It claims that NZ is the easiest country in the world to do business in. There are few restrictions on establishing, owning and operating a business here.

In this quick guide, we’ll share useful info on the process and what the requirements are. Let’s jump right in.

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Starting a business in NZ. What you need to know and do

Starting a business in New Zealand is relatively straightforward. Once you’ve come up with a name and business strategy, choose which structure will suit you most. Then it’s a matter of registering the business and applying for several required items.

Once that’s all done, consider which financial institution to partner with for day-to-day transactions. The Wise Business Account makes it easy for international businesses to operate globally.

Let’s get into the steps you need.

✅ Speak to a tax accountant or local consultant

While this guide is a quick run-through of what you’ll need to know, it’s always advisable to have local professionals in your corner when establishing a business abroad. A financial advisor, a tax accountant and a corporate lawyer will be able to guide you through any unclear processes.

✅ Having the right visa

The Entrepreneur Work Visa is one of the key requirements to establish a new business in New Zealand.²

To qualify, you must prove your identity. You need to be in good health, a fit and proper person, and of good character.

Other criteria include speaking English and providing a detailed business plan.

You’ll need to meet 120 points, which is calculated by immigration officials based on a sliding scale of these variables:

• Capital investment: minimum 100,000 NZD
• Business experience (in a similar field): minimum of 3 years
• Provide employment to NZ citizens: at least 1
• Export turnover of NZ goods: forecast minimum of 200,000 NZD per year
• Age: younger than 59 years
• Location: bonus points if your business won’t be based in Auckland

✅ Plan your business strategy and come up with a business name

Before you jump on a plane and fly to New Zealand, you’ll need to get two things sorted. Have a solid business strategy in place, and choose a business name.

Business strategy

Do your homework, and see if there is a need for what you’re offering or if there’s already too much competition.

Create a business plan. You’re going to need this when applying for a visa too.

You may need to check for additional regulations based on your product or service. Fair trading, food licensing and health and safety are considerations. The NZ Government business website compliance page can help.

Business name

Come up with a business name; make it catchy and memorable. Here’s a tip, short names make for excellent domain names.

Once you’ve chosen one, check to make sure another business in New Zealand hasn’t already had the same idea.

ONECheck has that all covered. One click, and you can find out.

You'll need to reserve your business name if you decide to operate as a company. You then have 20 days to incorporate your company.

✅ Choose your structure — Types of business structures in NZ

When choosing a business structure, determine how you want to grow your business, if you require outside investment and whether you plan to sell it.

The three main structures in New Zealand are ¹:

• Sole traders
• Partnerships
• Companies

Sole Traders

Most small businesses begin as sole traders. It’s the simplest and cheapest way to start, and there are tax benefits too. You pay tax on your income but can offset expenses to reduce the amount.

The downside is that your personal assets may be required to repay debts. Sometimes, getting investors or loans is more complicated.

Partnerships

A partnership structure is standard for professionals in business together. Accountants, lawyers, and architects are familiar partnership entities.

The benefits are that everyone shares the load and costs and brings in different investors if required. Downsides are similar to sole traders, where personal assets might be used to pay back debts.

Tax implications favour partnerships. Tax isn’t payable as a business; it’s paid on each partner’s own earnings. Making it fairer if one works harder than another.

Companies

Choosing a company structure is beneficial if shareholders want to limit their liability. This structure is more complicated, has more regulations and takes more time to establish.

Benefits are that shareholders get dividends, lower tax rates than other entities and companies tend to have more credibility. Loans are easier to get, and the business can grow indefinitely.

A final consideration is if you need a physical office. “Creating a fixed place of business” overseas can make things more complex. If you don’t have one, you usually just pay tax in New Zealand.

✅ Get an NZ Business number

While not compulsory, some local companies may not trade with you if you don’t have a New Zealand Business Number (NZBN).

If you establish a company, you’ll automatically be assigned one. For sole traders and partnerships, it’s easy to apply online.

Read more: New Zealand business number NZBN

✅ Register your business – The process and what’s required

The process for registering a business changes based on the entity. Regardless of the business structure and internal revenue department (IRD) number needs to be applied for.³

Sole traders

Sole traders can begin their business without the need to register anything more than an IRD number.

However, If you’re employing staff, you’ll need to register as an employer. You may also need to register for GST.⁴

Partnerships

Similar to sole traders, partnerships only need an entity IRD.

Partners declare profits earned via their personal income tax linked to their individual IRDs.

The partnership needs to file a Partnership income tax return (IR7) to allocate the profits or losses to each person.

As with sole traders, they may also need to register as employers and for GST.⁵

Companies

This entity type requires the most amount of work. You need to ⁶:

• Reserve a name

• Get an Internal revenue department (IRD) number

• Register the following:

• Company address

• As an employer

• For GST

• The appointment of a director

• Company shareholders

• File director and shareholder consent forms

• Issue company shares

• Incorporate a constitution (not mandatory)

Registering an overseas business in New Zealand

If your company is incorporated in another country, you’ll need to provide the following ⁷:

• Contact details
• The business start date
• Certificate of incorporation
• Directors details
• Company constitution

You’ll also need to choose a balance date and month for annual filing.

The application can be made here.

Can you register your business from abroad?

All business registrations can be done online from anywhere in the world.

Need to register for GST?

Once you start earning NZ$60,000 a year, you’ll need to register for GST. Save time and do it at the time of registering your company.¹

For other business entities, it’s a simple online process.

✅ Sort out your business banking

Once your business is up and running, you’ll need a business account to manage all your financial transactions. While a local bricks and mortar bank may have an account that works well domestically, you’ll likely need a way to send funds abroad quickly and with low fees.

The Wise Account is a stress-free international business account that conducts international transfers based on the mid-market rate. The account comes with multiple debit cards and accounting service integration.

Read more: Best Business Bank Accounts in New Zealand

✅ Grow your business

The New Zealand economy is healthy, and businesses are expanding. Now is an excellent time to consider operating a business there. Export goods abroad, hire local staff and contribute to the community. Tremendous growth opportunities are there.

Some resources to continue your research.

There are loads of valuable resources online. Get advice from those who have already succeeded:

Government websites of particular use are:

• IRD: Starting a new business
• Business.govt: 10-step guide
• Companies Registrar
• NZ Immigration: Starting a business

Helpful forums and discussion threads:

• What to do when starting a business in NZ - Quora
• Starting a business in NZ - Reddit

Wise Business

If you’re transferring funds overseas, the Wise Business Account has you covered. You can receive money and pay staff or suppliers in multiple currencies.

Send money overseas quickly and with low fees. Exchanges are made at the mid-market rate, the same one you’d see on Google.

Your end-of-the-month supplier payments are made easier with the online batch tool. Make reporting a breeze as the Wise Business Account integrates with various accounting software like Xero.

You can order multiple Business Debit Cards for you and the team. That way you can manage all the spending from one business account.

The Wise Business Account offers a local AUD account and local account details in a further 9 other major currencies. This is ideal for foreign business owners as you’re likely paying international suppliers.

Find out more about how much Wise could save your business; check out the Wise Business account. You can sign up online with a few clicks — in minutes.

Sign up for a Wise business account
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Please see Terms of Use for your region or visit Wise Fees & Pricing for the most up-to-date pricing and fee information.

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Sources:

1. New Zealand business structure options
2. NZ Immigration Entrepreneur work visa
3. NZ Internal Revenue Number process
4. NZ business registration details sole traders
5. NZ business registration details partnerships
6. NZ business registration details companies
7. Registering an overseas business in NZ

Sources checked on: 02 December 2022