All posts by Peter Wyllie

About Peter Wyllie

Email: [email protected]
Tel: +64 (03) 3665086
Experienced commercial, intellectual property and property lawyer and advisor to accountants, solicitors and clients on matters relating to trust/company structures; administration and corporate secretarial services; resettlement/variation and wind-up of structures; offshore incorporation, directorship duties and delegations - corporate governance; shareholder rights and remedies; registration, maintenance, exploitation, and sale of all aspects of intellectual property (excluding patents); acquisition and disposal of businesses, commercial and domestic property transactions.

Doing Business in New Zealand: Compliance and Regulation


New Zealand is predominately a dual island state located in the South Pacific. During the 1980s, New Zealand underwent changes within its economic market structure. The result is a deregulated and decentralised economy engaging in international partnerships and most favoured nation agreements. Diminished import controls and subsidies establish New Zealand as a competitive international trading partner.

As a result, international trade rules, overseas investment rules, and domestic governance over commercial activities have changed.

New Zealand’s International Links

New Zealand is a member of the British Commonwealth system as well as an independent sovereign state. New Zealand’s governmental and economic policies are influenced by both its location within the South Pacific as well as its Commonwealth counterparts. Operating under a triennially, democratically elected, Westminster model political system strengthens its relationships through trade, security, and investment. New Zealand has the following international agreements in force:[1]

  • New Zealand-Australia Closer Economic Relations;
  • Australia-New Zealand Closer Economic Relationship;
  • ASEAN-Australia-New Zealand Free Trade Agreement;
  • New Zealand-Hong Kong, China Closer Economic Partnership;
  • New Zealand-China Free Trade Agreement;
  • New Zealand-Malaysia Free Trade Agreement;
  • Trans-Pacific Strategic Economic Partnership (P4);
  • New Zealand-Thailand Closer Economic Partnership; and
  • New Zealand-Singapore Closer Economic Partnership

New Zealand has also concluded the following agreements which are yet to be enforced:[2]

  • Trans-Pacific Partnership;
  • New Zealand-Korea Free Trade Agreement;
  • Anti-Counterfeiting Trade Agreement (concluded and signed, but not yet ratified);
  • New Zealand-Gulf Cooperation Council Free Trade Agreement (concluded but not yet signed);
  • New Zealand-Russia-Belarus-Kazakhstan Free Trade Agreement (under negotiation);
  • New Zealand-India Free Trade Agreement (under negotiation); and
  • Regional Comprehensive Economic Partnership (RCEP) (under negotiation)

Agreements on Economic cooperation are also in place with Taiwan, Penghu, Kinmen, and Matsu.[3]

Overseas Investments

Investments within New Zealand typically adopt either a local subsidiary model or a registry branch, and are dependent upon foreign business requirements. Other options include purchasing local businesses or the establishment of a sole trade business, or engaging within joint ventures, partnerships, or franchises.

There are no restrictions on transfer of capital, dividends, profits, royalties, or interest into or out of New Zealand. Fair competition and strict legal guidelines establish transparent frameworks in order to attain consistency and confidence-building when undertaking business in New Zealand. Operating a business in New Zealand as an overseas investor is predominately regulated by the Overseas Investment Act 2005, as well as the Overseas Investment Regulation Amendment Act 2005.

Other domestic legislation which further controls corporate activity in New Zealand includes:

  • Companies Act 1993;
  • Partnership Act 1998;
  • Limited Partnerships Act 2008;
  • Commerce Act 1986; and
  • Reserve Bank of New Zealand 1989

The Overseas Investment Office (OIO) is responsible for approving applications for overseas persons who wish to invest in New Zealand. An overseas person is defined by the Overseas Investment Act as, ‘a person who is not a citizen or ordinarily resident in New Zealand.’ This definition includes a Company that may be incorporated outside of New Zealand, or a partnership or other corporate body which is 25% (or possibly more) controlled by an overseas person or persons. The assessment is based on a number of factors, including the amount of the investment, the type of investment, and the proposed sector in which the investment is to be made.

Fair Competition

Business acquisition falls under the regulatory framework of the Commerce Act 1986. This Act aims to promote competition which establishes a long term benefit for New Zealand in a fair and equitable way. New Zealand sees more and more extraterritorial ventures, and as a result, the Commerce Act extends to business activities conducted outside of New Zealand by New Zealand Corporates. The Commerce Act is strict in its prohibition of business acquisitions which substantially lessen competition in the market, create safe harbours, and promote restrictive trade practices. It covers cartel behaviours, collective boycotts, and price fixing.

New Zealand also has a very well established consumer protection legal framework, which includes:

  • Fair Trading Act 1986;
  • Consumer Guarantee Act 1993; and
  • Sale of Goods and Services Act 1908

The above legislation oversees trade between businesses and to general consumers through regulation of business activities. If business activities are deemed to be unfair, then subject to the situation, one of the above legislative measures comes into force. Unfair business practice extends to conduct which is deemed to be misleading or deceptive, or that causes consumers or other businesses to form a mistaken belief or impression as to the product or service on offer.


The Reserve Bank of New Zealand Act 1999 empowers the Reserve Bank of New Zealand to regulate monetary policy in order to promote stability in pricing, as well as overseeing the maintenance of the financial system. It also supervises banks operating within New Zealand, including those which may be owned by overseas entities.

Most financial services are regulated within New Zealand. For example, insurance providers (domestic or overseas providers) are governed by the principles of the Insurance (Prudential Supervision) Act 2010. Domestic and overseas financial service providers fall under the ambit of the Financial Services Providers (Registration and Dispute Resolution) Act 2008. Regulatory frameworks and compliance will generally depend upon the type of investment venture.

Capital Markets

New Zealand operates three securities markets:

  • New Zealand stock market (NZSX);
  • New Zealand alternative market (NZAX); and
  • New Zealand Data Market (NZDX).

NZSX is the principal market for equity securities for larger Corporations; the NZAX offers securities for small or medium-sized businesses. Fixed income businesses are generally listed on the NZDX. Any offer of securities to the New Zealand public must comply with the New Zealand Securities Act 1978 and the Securities Regulations 2009. This includes primary, dual, or overseas listings.


The Income Tax Act 2007 governs income and overseas tax for individual and corporate tax payers. Taxes are normally levied on annual gross income from all sources less annual total deductions, as well as any losses carried forward. Gross income is defined as income which includes all gains on financial instruments, and short-term or planned profits on land or shared transactions.

Deductions might be defined as expenses incurred in gaining income or in carrying out business for the purpose of gaining income. Tax is payable in New Zealand if a person is a resident in New Zealand, or if the person is non-resident but derives an income from a source within New Zealand. Worldwide income will be dependent on in which country and how that income is derived.

New Zealand resident companies are taxable on their worldwide income at a rate of 28%, unless that company has made an election with the IRD to be a look-through company (‘LTC’). This means that the shareholders themselves are liable for income tax on the LTC’s profits, rather than the company itself. They can offset the LTC’s losses against their own personal income in New Zealand. Non-resident shareholders of an LTC are not liable to pay income tax in New Zealand on any overseas sourced income, only on income sourced in New Zealand. An overseas company is taxable at the same rate if its income has a New Zealand source.

The New Zealand dividend imputation system under which tax is paid by New Zealand resident companies allocates an imputation credit to dividends paid to shareholders. New Zealand resident shareholders may offset this imputation credit against tax liabilities in respect of other dividends; however, this will be dependent upon a range of factors, i.e. the rate of non-resident withholding tax, or if a New Zealand resident company receives dividends from a foreign tax company.

In order to ensure overseas owned companies pay the appropriate level of tax on their New Zealand sourced profits, a transfer pricing regime exists. Maintenance of the appropriate pricing records and compliance with other New Zealand regulatory regimes such as PAYE, Goods and Services Tax, and Kiwi Saver (Superannuation Schemes) also apply.


The above is an overview of useful information for overseas investment within New Zealand, but does not constitute legal advice. Specific legal requirements and compliance must be assessed on a case-by-case basis, and are dependent upon business needs or plans. Doing business in New Zealand needs careful guidance through the legislative frameworks and processes in order to ensure proper compliance. Before taking steps to invest in New Zealand, we strongly suggest that you consult with legal experts.

[1] Information supplied by the Ministry of Foreign Affairs and Trade of New Zealand.

[2] Information supplied by the Ministry of Foreign Affairs and Trade of New Zealand.

[3] Information supplied by the Ministry of Foreign Affairs and Trade of New Zealand.