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In more than 90 countries

The consumer

Consumer Profile
In New Zealand, the GDP per capita is USD 47,500 in 2021 (IMF) and economic growth remains strong, fuelled by solid population growth, private consumption and booming tourism. From 2019 to 2020, household incomes have grown by 3.6% and household expenditure has increased by 7% since 2016 (Stats NZ, latest data available). Income inequalities are quite high for a developed country: the income of the highest-earning 10% is 4.3 times higher than the lowest 10% of the population (OECD, latest data available). With rising housing costs, some vulnerable households can only afford to purchase vital commodities. Nevertheless, New Zealand purchasing power is quite high and most New Zealanders are confident regarding financial matters. New Zealand consumers are relatively well-off. While they are not particularly interested in high-end purchases, they have diverse interests and tastes. They value home comfort and are interested in innovative technology and fashion from Europe and the U.S. DIY (Do It Yourself) projects and outdoor products are also an area of growth. According to a National Consumer Protection survey, New Zealand consumers are generally confident and trusting when making purchases. According to a research by Nielsen, 73% of consumers are looking for special offers. Even if New Zealand consumers are increasingly aware of health concerns, the fast-food sector is still an interesting market. The rapid growth of online services provides a new demand for e-marketers. New Zealanders are educated, technology savvy and willing to spend time and money through online shopping. For example, 10% of Kiwis regularly access their grocery retail websites.
Consumer Behaviour
New Zealand is a multi-ethnic country, with people coming from Europe (70.2%), Asia (15.7%) and Oceania (8.3%), as well as natives Maori (16.7%) (Stats NZ's latest census). In 2019, 86.6% of citizens in New Zealand lived in cities (World Bank, latest data available). 52% of New Zealanders prefer to buy products made in New Zealand as often as possible (Nielsen Survey).
Recently, purchases in the food and beverages segment have increased consequently, mainly driven by tourism. Customer service is an important element of sales. The quality of the service will sometimes depend on the speed at which an item can be delivered.
There are many similarities between European countries and the New Zealand market when it comes to lifestyles and purchasing behaviour. New Zealanders, or Kiwis as they are colloquially known, are educated and tend to be relatively well-off. Kiwis like to shop, have a passion for sports and have quite an active culture. In its Active NZ 2019 survey, Sport NZ reported that 72% of adults in the country practised sports weekly. This indicates that Kiwis are concerned with healthy lifestyles.
They are also likely to make healthy food purchases. As consumers, New Zealanders are concerned about convenience, time management and nutrition. E-commerce is well developed in New Zealand: the market represented about 4 billion USD in 2019 (J.P. Morgan, latest data available), with 50% of New Zealanders shopping online (2020 New Zealand eCommerce Review). Travel is the lead purchase, followed by clothing, entertainment and fast food. About one-third of the purchases are made overseas (mainly from Australia, China and the United States).
Consumers Associations
Consumer.org
 

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Importing & Distributing

Import Procedures
There are few documentation requirements for importing and exporting goods. The New Zealand Customs Service website outlines minimal requirements. Import declarations must be made electronically by the importer or a Customs House Broker acting for the importer.
All commercial goods brought into the country must have a Customs Entry Form or Informal Clearance Document (ICD) submitted. These documents must be cleared 20 days before arrival and must be submitted by a qualified Customs broker or by a qualified importer. They must include how the goods will be transported (with freight contracts: Airway bill or Bill of lading) and all invoices or documents related to the import. The submission must include a complete description of the goods, the currency of reference, the contact details of the seller and the buyer, the name of the vessel or the flight number of the plane used.
Import procedures are described on the website of the New Zealand Customs Service.
Generic import clearance procedures are available on the Website of the New Zealand Food Safety Authority.
Distribution market players
In 2021, New Zealand has the eighth highest prices for tradable commodities in the OECD. The New Zealand-owned supermarket chain Foodstuffs has about 53% market share (Canstar Blue, 2020). Woolworths, its main competitor, operates under the brand name Countdown (32.4% market share - Canstar Blue, 2020). Together, Foodstuffs and Woolworths hold a duopoly over the food and beverage market with hundreds of stores across New Zealand. Sales made by supermarkets have shown stable growth over the last few years but the number of convenience stores is increasing, with a constantly growing volume of sales. New Zealand customers have a preference for shopping malls, but independent and specialised stores have been able to adapt and are successfully targeting high revenue customers. Gourmet supermarkets have a growing customer appeal. Supermarkets such as Farro and Jones the Grocer are all Auckland-based retailers that appeal to the high-end consumer who enjoys artisanal and quality-assured products.

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Operating a Business

Type of companies

Sole Trader or Proprietorship
Number of partners: One natural person
Capital (max/min): No minimum capital required
Shareholders and liability: Liability is unlimited
Limited Liability Company
Number of partners: Minimum 2. No limit. Under the Companies Act 1993, there must be one or more shareholders and directors (who can be the same person).
Capital (max/min): NZD 1
Shareholders and liability: Limited to the amount of share capital subscribed  
Trust
Number of partners: Minimum: 1 trustee
Capital (max/min): NZD 1
Shareholders and liability: Trust property
Limited Liability Partnership
Number of partners: Minimum: 2 with (one general, one limited); no maximum.
Capital (max/min): No minimum capital required
Shareholders and liability: Limited partners only liable to the extent of their contribution to the partnership. Joint and several liability for general partners.
 
Setting Up a Company New Zealand OECD
Procedures (number) 1.0 5.2
Time (days) 0.5 9.5

Source: Doing Business - Latest available data.

 

Cost of Labour

Minimum Wage
In 2021, the minimum wage is NZD 20 per hour according to the Ministry of  Business, Innovation and Employment of New Zealand.
Average Wage
In 2019, the average salary was NZD 30.58 per hour according to Stats NZ (latest data available).
Social Contributions
Social Security Contributions Paid By Employers: New Zealand does not have a social security system. Paying social security contributions in New Zealand is done through income tax (PAYE).
That being said, employers contribute 0.8% of wages to workers' compensation benefits, with rates that may vary depending on the employer's sector and the associated risks. An additional rate to motor vehicles applies for injuries caused by motor vehicles on public roads. For more information, please visit the Accident Insurance Corporation (ACC) website.
The employer needs to contribute at least 3% towards the KiwiSaver account if the employee is a KiwiSaver member.
Social Security Contributions Paid By Employees: Employees are entitled to participate in KiwiSaver (a savings scheme). The default contribution rate to KiwiSaver is 3% unless the employee decides to contribute more (up to 10%).
The average tax rate for non-work injury compensation is 1.24% of earned wages.
 

Intellectual Property

National Organisations
For more information go to the web sites of the two regulation bodies: the Intellectual Property Office of New Zealand and the Copyright Council of New Zealand. You can also consult the Intellectual Property Policy on the Ministry of Economic Development website.
Regional Organisations
New Zealand is a member of the Intellectual Property Rights Experts Group (IPEG) of the APEC community.
International Membership
Member of the WIPO (World Intellectual Property Organization)
Signatory to the Paris Convention For the Protection of Intellectual Property
Membership to the TRIPS agreement - Trade-Related Aspects of Intellectual Property Rights (TRIPS)
 

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Tax Rates

Consumption Taxes

Nature of the Tax
Good and Services Tax (GST)
Tax Rate
15%
Reduced Tax Rate
Supplies of accommodation and other domestic goods and services in a rest home where nursing care and other services are provided, and supplies of long-term accommodation in a hotel or motel are subject to a reduced rate of 9%.
Zero-rated items include exports of goods and services; international passenger transport; certain international services; first sales of refined precious metals for investment purposes; supplies of financial services to businesses that make taxable supplies in excess of 75% of total supplies where the supplier has elected to do so; certain transactions involving emissions units; exported secondhand goods if the recipient gives the supplier an undertaking in writing that the goods will not be reimported into New Zealand; certain supplies of which land is a component by GST-registered vendors to registered persons; supplies of remote services made by nonresident suppliers to GST-registered New Zealand customers, where the supplier chooses to zero-rate.
Exempt items include financial services (although some qualify for the zero rate); sales of donated goods by non-profit organizations; certain real estate transactions; supply of precious metal.
Other Consumption Taxes
Excise duty is levied on petroleum products, fuels (e.g. compressed natural gas, gasoline), tobacco, and alcohol.
Diesel vehicles are subject to road user charges according to the type of vehicle and its weight.
 

Corporate Taxes

Company Tax
28%
Tax Rate For Foreign Companies
Resident companies are taxed on their worldwide income whereas non-resident firms are only taxed on their New Zealand-sourced income.
Capital Gains Taxation
Capital gains are generally not taxed in New Zealand. Certain property transactions are taxable, such as the sale of residential property within five years of purchase (with an exception for a family home), as well as the sale of personal property purchased with the intention of resale.
Main Allowable Deductions and Tax Credits
Expenses incurred for the purpose of generating income are generally deductible. On the other hand, start-up costs and goodwill are not deductible for tax purposes.

Interest charges and bad debts (for the year in which non-recoverable debts are eliminated) are tax-deductible. Donations to charities approved by the New Zealand tax authorities are eligible for a tax deduction, capped at the net income of the company in a given tax year. Legal fees are deductible if they are paid in order to generate taxable income or to carry on an activity whose objective is to generate taxable income. These fees are not deductible when they are of a capital nature. Entertainment expenses are deductible up to 50% (100% for costs incurred abroad). The benefits tax is also tax-deductible, as well as R&D expenses.

Tax losses can be carried forward as long as the company maintains a minimum of 49% participation on a continuous basis. The carryback of losses is prohibited; however, following the COVID-19 pandemic, a temporary loss carryback is available for businesses that have incurred a loss in the 2019-20 income tax year or that anticipate being in a loss position in the 2020-21 income tax year.
Other Corporate Taxes
The New Zealand tax system does not impose any stamp or capital duty while the levy of property tax is made at variable rates depending on the region. In contrast, all employers are required to pay a fringe benefits tax at a rate between 49.25% and 63.93%.
The Tax Code does not explicitly provide for a social security tax (the latter being financed by all taxes), yet employers are required to contribute when the employee decides to register to the voluntary savings scheme (KiwiSaver, rates between 10.5% and 33% according to the salary). All new employees are automatically enrolled in the KiwiSaver and employers are required to offer the scheme to all staff. Furthermore, a statutory-based scheme of accident insurance is funded in part by premiums paid by employers and employees at rates that vary according to the industry or risk classification of the employer and the level of earnings of employees.
When making contract payments to non-residents in relation to certain contract activities undertaken in New Zealand, companies should deduct the Non-resident contractor’s tax (NRCT), at a rate of 15% (20% if the relevant paperwork is not provided). Certain transactions are exempted, for example for payments for contract work amounting to less than NZD 15,000 in a 12-month period, when the non-resident has full relief from tax under a DTA or is present in New Zealand for less than 92 days in 12 months.
Other Domestic Resources
New Zealand Inland Revenue
Consult the Doing Business Website, to obtain a summary of the taxes and mandatory contributions.
 

Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed
See the list of the tax conventions signed by New Zealand.
Withholding Taxes
Dividends: 0/33% (residents) / 0/15/30% (non-residents); Interest: 0/15%; Royalties: 0 (residents)/15% (non-residents)

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