Investing made easy
New Zealand understands the contribution investors can make in developing our economy and our Government actively encourages you to get involved here.
New Zealand governments have put a lot of effort into simplifying business rules and taxes. That’s made it increasingly easy for investors to get started and operate here.
In fact, we’re the world’s easiest country to do business in, according to the World Bank’s 2018 'Doing Business' report. They also ranked us top for ease of starting a business, dealing with construction permits, registering property, protecting minority investors and for getting credit.
Getting money into or out of New Zealand is easy and there are very few restrictions on what you can or can’t invest in. Plus, our tax rules have some features that are very positive for investors.
Most efficient entrepreneurial environment
The World Bank is not alone in recognising New Zealand’s business-friendly environment.
Forbes rated us No. 2 on its Best Countries for Business 2018, and top for investor protection and red tape.
The Heritage Foundation rated New Zealand the world’s third freest economy in its 2017 Index of Economic Freedom, commenting “a transparent and stable business climate makes New Zealand one of the world’s friendliest environments for entrepreneurs.”
HSBC's 2017 Expat Explorer Survey ranked New Zealand first for entrepreneurship.
New Zealand’s light-touch regulatory environment was well described by the Heritage Foundation’s 2017 Index of Economic Freedom.
“New Zealand’s entrepreneurial environment is one of the world’s most efficient and competitive. Start-up companies enjoy great flexibility under licensing and other regulatory frameworks. The labor regulations facilitate a dynamic labor market. New Zealand, which has the lowest subsidies among OECD countries, removed all farm subsidies more than three decades ago and spurred the development of a vibrant and diversified agriculture sector.”
While we make things as easy as possible for investors and entrepreneurs, New Zealand business is well regulated, for everyone’s protection.
The few regulations that can affect overseas investment (eg. investing in ‘sensitive’ land) are applied by the Overseas Investment Office.
For guidance on investing in New Zealand and our regulations, you should seek professional expertise. Financial advisers are themselves regulated and you should deal with one who is recognised.
Authorised Financial Advisors (AFAs) and the FMA
An important regulator of New Zealand’s financial markets is the Financial Markets Authority.
Among other responsibilities, it regulates professional advisers. In seeking advice for your venture, make sure the person you deal with is on the FMA’s Financial Service Providers Register.
Ideally your advisor will be an AFA - an Authorised Financial Advisor. AFAs must be well qualified and undertake continuous professional development. They must also abide by a code of conduct. Among other things, this code obliges them to put your interests first, ahead of whoever is selling you the investment, property or business opportunity.
Financial Markets Conduct (FMC) rules
If you plan to buy shares in a New Zealand business, you should be aware of the protection investors enjoy under the Financial Markets Conduct (FMC) Act.
This law regulates the way investments are offered to investors here. Key features are:
- Product Disclosure Statements (PDS) - most investment opportunities must come with a clear and concise PDS. It must be written in a way that is understandable to ‘prudent non-experts’ and not exceed a set number of pages. All the other material required by the FMC Act must be available online. (There are some exceptions however, eg. small offers of debt and equity through 'angel' investor networks.)
- Audit - companies and funds must be audited each year and the auditor's report included in any PDS and in the annual report to investors.
- Annual financial statements - issuers of investments must prepare and register annual audited financial statements. Most issuers these to investors with their annual reports.
- Peer-to-peer lending and equity crowd funding - are now regulated under the Act.
The Financial Markets Authority has a comprehensive 'Ways to invest' section which covers the processes, risks and safeguards you should consider when buying shares in New Zealand.
Find out more about buying shares
Stock Exchange rules
If you’re considering launching your own business and offering shares to the public, you’ll need to work with the New Zealand Stock Exchange and comply with the NZSX listing rules.
Positive tax environment
New Zealand offers a favourable tax environment for your earnings and assets.
The tax system is comparatively simple and easy to navigate and has the major attractions of predictability, fairness and a minimum of loopholes.
In fact, the US-based Tax Foundation’s 2017 International Tax Competitiveness Index ranks New Zealand’s overall tax system as second in the developed world for its competitiveness and top for its individual (ie. personal) taxes.
Key features of New Zealand’s tax system include:
- Corporate tax rate 28%. Top personal income tax rate 33%
- Broad-based value-added consumption tax (GST), 15%
- No inheritance tax
- No general capital gains tax, although it can apply to some specific investments.
- No local or state taxes apart from rates levied by local councils and authorities
- No payroll tax
- No social security tax
- No health care tax, apart from a very low levy for New Zealand’s accident compensation injury insurance scheme.
Overseas investment income exemption
A feature many investors find attractive is our tax concession on overseas investment income and pensions. If you qualify, this income may be exempt from New Zealand tax for your first four years here. In that time, only your New Zealand-sourced income may be liable to income tax.
Double taxation relief
If you find yourself a tax resident in New Zealand as well as somewhere overseas, and if both countries tax residents’ worldwide income, it’s possible your income could be taxed twice.
Our system minimises that possibility by providing credits for tax paid overseas on income that is also subject to New Zealand tax. We also have agreements with 39 of our main trading and investment partners which eliminate double taxation.
When international colleagues of mine come to New Zealand they sense that this is a country that wants to be on the map and wants to make a difference.