New Zealand Country Economy Analysis
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This document provides an overview of New Zealand's business environment. It discusses New Zealand's economy, exports, trading partners, tourism industry, ease of doing business, investment opportunities and challenges. Key points include: - New Zealand has a small, open economy driven by exports such as dairy products, meat and tourism. Major trading partners are Australia, China, US and Japan. - The economy was impacted by the global financial crisis but recovered due to strong government finances, exports and rebuilding after the Christchurch earthquake. - New Zealand ranks highly in terms of ease of doing business and investment safety. It has low corporate taxes and free trade agreements with many countries. - Opportunities exist in clean technology
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New Zealand Country Economy Analysis
- 1. NEW ZEALAND Open for SOUTH PACIFIC BUSINESS ENVIRONMENT MBA 434 - 2013 Business
- 2. MBA 434: South Pacific Business Environment - 2013 GROUP Tuesday 5pm Paula Avinesh Gaythri Vinita
- 3. MBA 434: South Pacific Business Environment - 2013 AGENDA COUNTRY PROFILE ECONOMIC OVERVIEW EXPORTS / IMPORTS TOURISM TRADING PARTNERS BUSINESS DEVELOPMENT POLICY GLOBAL FINANCIAL CRISIS BUSINESS ENVIRONMENT INVESTMENT EASE OF DOING BUSINESS BUSINESS CHALLENGES RECOMMENDATIONS CONCLUSION REFERENCE
- 6. COUNTRY PROFILE Māori name Aotearoa Capital Wellington Largest city Auckland Population 4,242,048 Area 269,652 sq km Currency New Zealand dollar Geography North & South Islands
- 7. COUNTRY PROFILE Government Unitary parliamentary constitutional Monarch QueenElizabeth II Governor-General Sir JerryMateparae Prime Minister John Key
- 8. ETHNIC GROUPS European / other 10% 7% 1% Māori 15% 67% Official Languages 95.9% English 4.2% Māori 0.6% NZ Sign Language Asian Pacific peoples
- 9. NZ Cities Auckland Wellington Population 2013 1,397,300 395,600 Christchurch 375,900 Hamilton 209,300 Napier-Hastings 125,000 Tauranga Dunedin 122,200 118,400 Palmerston North 83,300 Nelson Rotorua 61,100 56,100 New Plymouth 53,000 Whangarei Invercargill 52,500 49,000 Whanganui 39,500 Gisborne 34,40
- 11. CLIMATE Cool temperate to warm temperate with a strong maritime influence Snow - South Island and southern parts of the North Island Maximum temperatures are normally in the mid to low 20 (°C) over most of the country.
- 16. INFRASTRUCTURE energy from renewable energy, primarily hydroelectric power and geothermal power Bus services private car Railways Six international airports Telecommunications
- 22. ENTERTAINMENT & SPORTS MUSIC blues, jazz, country, rock and roll and hip hop SPORTS Rugby , Golf, netball, tennis and cricket
- 24. NEW ZEALAND Open economy that works on free market principles Very export-driven competitive economy
- 25. ECONOMIC OVERVIEW Total Nominal GDP (NZ$million) Nominal GDP growth Year end $208,688 31-Dec-2012 2.5 31-Dec-2012 Nominal GDP per capita (NZ$) $45,769 31-Mar-2012 Real GDP (NZ$million) $142,774 31-Dec-2012 Real GDP growth (%) Real GDP per capita (NZ$) CPI inflation Unemployment rate (%) 1.5% 31-Dec-2012 $32,341 31-Dec-2012 0.9 02-Feb-2013 6.6% 02-Feb-2013 Total exports (NZ$million) $48,020 31-Dec-2012 Total imports (NZ$million) $53,740 31-Dec-2012 Trade surplus/deficit (NZ$million) -5,720 31-Dec-2012
- 26. INDUSTRY BY SECTORS Accommodation Agriculture, horticulture, and forestry Alcohol availability Bioscience and biotechnology Construction Energy Film and television Imports and exports Information communications and technology Manufacturing and production Retail trade Tourism Wholesale trade
- 27. EXPORTS - COMMODITIES Commodity NZ$ millions Year end Milk powder, butter, and cheese 12,428 31-Dec-2012 Meat and edible offal 5,167 31-Dec-2012 Logs, wood and wood articles 3,160 31-Dec-2012 Crude oil 1,790 31-Dec-2012 Mechanical machinery and equipment 1,716 31-Dec-2012 Fruit 1,563 31-Dec-2012 Fish, crustaceans and molluscs 1,382 31-Dec-2012 Wine 1,218 31-Dec-2012 Electrical machinery and equipment 1,119 31-Dec-2012 1,042 31-Dec-2012 Aluminium and aluminium articles
- 28. EXPORTS - COMMODITIES 890 31-Dec-2012 874 31-Dec-2012 917 31-Dec-2012 Precious metals, jewellery and coins 807 31-Dec-2012 Miscellaneous edible preparations 747 31-Dec-2012 Optical, medical, and measuring equipment 721 31-Dec-2012 Wool 717 31-Dec-2012 Wood pulp and waste paper 589 31-Dec-2012 Raw hides, skins, and leather 567 31-Dec-2012 Textiles and textile articles 560 31-Dec-2012 Casein and caseinates and steel and articles Iron Preparations of cereals, flour and starch
- 38. IMPORTS Main import commodities (2012) NZ$(million) Petroleum and products 8,366 Mechanical machinery and equipment 6,071 Vehicles, parts, and accessories 4,882 Electrical machinery and equipment(1) 3,948 Textiles and textile articles 2,116 Plastic and plastic articles 1,685 Optical, medical, and measuring equipment 1,337 Iron and steel, and articles(1) 1,247 Total – all commodities 47,451
- 39. TOURISM International tourism expenditure contributed $9.8 billion Domestic tourism expenditure increased 2.4 % Generated to GDP of $7.3 billion, or 3.7 % of GDP. Additional $9.8 billion for tourism, or 5.0 % of GDP. Employed 110,800 full-time equivalents or 5.7 % of total employment in New Zealand. Tourists generated $1.3 billion in GST revenue.
- 45. TOP TRADING PARTNERS Country Exports Imports Total NZ$ NZ$ trade NZ$ (million) (million) (million) Australia 10,848 7,369 18,217 China, People's Republic of 5,887 7,439 13,326 United States of America 3,997 5,026 9,023 Japan 3,441 2,921 6,362 Korea, Republic of 1,675 1,454 3,129 Singapore 813 2,163 2,976 United Kingdom 1,545 1,267 2,812 Germany 775 1,994 2,769 Malaysia 875 1,478 2,353 Thailand 732 1,330 2,062 Total trade 47,702 46,896 94,598
- 48. BUSINESS DEVELOPMENT POLICY Six key policy drivers: A growth-enhancing tax system Better public services Support for science, innovation and trade Better regulation, including regulation around natural resources Investment in infrastructure Improved education and skills.
- 49. THE GLOBAL FINANCIAL CRISIS Economic slow-down in global financial crisis 2008 2% decline in 2009 Achieved 1.7% growth in 2010 2% in 2011 and 3% in 2012
- 50. CRISIS-RECOVERY Exports, trading partners Australia and China, Strong Government accounts Well-capitalised banking system The strong terms of trade and the boost to GDP from the rebuilding of Christchurch, have led to a solid and on-going growth.
- 51. BUSINESS ENVIRONMENT New Zealand ranked fourth safest economy in Asia-pacific region for Investment Country Australia Hong Kong Singapore New Zealand Japan South Korea Taiwan Malaysia China India Indonesia Philippines Thailand Vietnam Bangladesh Risk Rating DB1d (lowest risk) DB2a (low risk) DB2a (low risk) DB2c (low risk) DB2d (low risk) DB2d (low risk) DB2d (low risk) DB3b (slight risk) DB3d (slight risk) DB3d (slight risk) DB4b (moderate risk) DB4b (moderate risk) DB4d (moderate risk) DB5b (high risk) DB5c (high risk)
- 52. BUSINESS ENVIRONMENT Reduced corporate income tax rate No payroll tax No social security tax No capital gains tax. low-inflation environment Independent monetary policy Focus on price stability
- 53. BUSINESS ENVIRONMENT New Zealand FREE TRADE AGREEMENT China Australia Vietnam Philippines Cambodia Brunei Indonesia Hong Kong Myanmar Thailand Malaysia Laos Singapore Chile
- 54. CLEAN TECHNOLOGY New Zealand an innovator in the development of energy, fuels, materials, and environmental technologies necessary to create a sustainable low carbon global economy
- 55. WHY INVESTMENT Safety, stability, ingenuity, and proximity to Asia's booming economies are just a few of the reasons to invest in New Zealand.
- 56. INVESTMENT ADVANTAGE Safe and secure business environment Ease of doing business Cost of doing business Simple tax system Efficient, market-oriented economy Access to other markets
- 57. INVESTMENT ADVANTAGE Innovative and entrepreneurial culture Flexible immigration policies Abundant resources Transport and freight - world-class infrastructure The Maori economy - Joint venture developments Banking - financial stability Sophisticated telecommunications
- 58. EASE OF DOING BUSINESS Topics DB 2014 Rank DB2013 Change in Rank Rank 1 1 No change 12 11 -1 Getting Electricity 45 45 No change Registering Property 2 2 No change Getting Credit 3 3 No change Protecting Investors 1 1 No change Paying Taxes 23 21 -2 Trading Across Borders Enforcing Contracts 21 19 -2 18 18 No change Resolving Insolvency 12 13 1 Starting a Business Dealing with Construction Permits
- 59. BUSINESS INCUBATORS The ICEHOUSE, Auckland E-Centre Massey, North Shore, Auckland SODA Inc, Hamilton The BCC, North Creative HQ, Christchurch Upstart , Dunedin
- 60. BUSINESS CHALLENGES Climate Change Global Financial Crisis Barriers of entry Natural Disaster (Earthquake) High Competitive Economy Currency rate and fluctuation Culture and Languages
- 61. RECOMMENDATIONS Focus on Economic development ; Export sector Research & Development Business reallocation Evacuation Plan Innovation ecosystem Establish more Business Incubators
- 62. CONCLUSION New Zealand is well established developed economy and has lot of business investment opportunities.
- 63. REFERENCE • http://www.newzealandnow.govt.nz/investing-in-nz/opportunities- outlook • http://www.franchisingexpo.co.nz/ • http://www.nzte.govt.nz/en/invest/sectors-of-opportunity/ • http://www.newzealandnow.govt.nz/investing-in-nz/stability-security • http://www.forbes.com/sites/kurtbadenhausen/2012/11/14/newzealand-tops-list-of-the-best-countries-for-business/ • http://www.customs.govt.nz/features/fta/pages/default.aspx • http://data.worldbank.org/region/LDC
- 65. NEW ZEALAND THANK YOU SOUTH PACIFIC BUSINESS ENVIRONMENT MBA 434 - 2013
Editor's Notes
- New Zealand is a small and relatively remote group of islands and was one of the last islands to be discovered and settled by humans. Thus, it contains a beautiful landscape and flourishing animal life and biodiversity that attracts flocks of tourists annually. New Zealand is a parliamentary constitutional monarchy that also recognizes Queen Elizabeth II as Head of State and in their national anthem, while John Key is the Prime Minister. New Zealand has one of the highest living standards and happiness ratings in the world, and tends to be a strong advocate for peace and environmental sustainability, banning nuclear weapons and protecting its diverse wildlife. The country’s GDP is $157.877 billion dollars, with a GDP per capita of $35,374 for its population of about 4.3 million. Its education, literacy, and health standards are all very high with a life expectancy of 80.2 years (keep on living, Jamie). Of course, New Zealand is a hot spot for travelers looking for beautiful topography and biodiversity, and while you’re there you can stop by the wonderful city where Jamie came from: Wellington (pictured).GDP | NotesThe gross domestic product (GDP) or gross domestic income (GDI) is one of the measures of national income and output. GDP can be defined in three ways, which should give identical results. First, it is equal to the total expenditures for all final goods and services produced within the country in a specified period of time (usually a 365-day year). Second, it is equal to the sum of the value added at every stage of production by all the industries, plus taxes and minus subsidies on products. Third, it is equal to the sum of the income generated by production like compensation of employees, taxes on production and imports less subsidies, and gross operating surplus.
- Official languages 95.9% English4.2% Māori0.6% NZ Sign Language
- 15 Cities – Auckland is highly populated
- GDP – Construction is the main driver of growth over the next couple of years – mainly residential. Net exports is likely to take a hit as import penetration starts to build with as the economy recovers. GDP is forecast to increase to 3.6% in 2014 from 2.9% in 2013.Unemployment – the current rate is 6.2% and the labour market is tightening with the increase in economic activity. Forecast to fall to 5.2% by March 2015. Tighter labour market will mean higher wage growth but also because of higher inflationary expectations as the economy recovers.Inflation - quite subdued and the annual rate has been 1% or less over the last four quarters. A strong NZD, weakening commodity prices and low inflation globally are conspiring to offset domestic-demand driven price increases. Low inflation also becomes self-fulfilling to the extent that it moderates inflation expectations and price-setting behaviour elsewhere.Current Account - The current account deficit appears to be stabilising in a 4.0% to 5.0% of GDP range. This is thanks largely to a resurgence in the commodity prices of the goods that New Zealand exports. This is a welcome development to the extent that it may appease nervous rating agencies for a year or so.OverallThe New Zealand economic expansion is gaining in momentum. The rebuild of Christchurch is now building up a head of steam and this is supporting increasingly widespread confidence. Very low interest rates and a booming housing market are playing their part too. Eventually this will necessitate a response from the central bank but while annual inflation remains below 1.0% (and set to stay there for a while) it suggests that any such response might be some time in coming. Meanwhile, the NZD remains supported by money printing elsewhere and the relative strength of the economy here.
- NZ Road – Advanced
- NZ Road – Advanced
- Economic indicators CPISeptember 2013 quarter+0.9%GDPin volume termsChange from March 2012 quarter+0.2%SGDP in current prices Year ended March 2013$211,019 million GDP per capita in current pricesYear ended March 2013$47,487 Current account balance June 2013 quarter-$2,157 millionS Change from last quarter-$148 millionSNet international positionJune 2013 quarter-$151,264 million
- Programme for International Student Assessment ranks New Zealand's education system as the 7th best in the world, with students performing exceptionally well in reading, mathematics and science.
- Dairy powerhouseNew Zealand will be the world’s second largest dairy exporter in 2013, second only to the combined countries of the EU, according to US Department of Agriculture estimates.New Zealand’s Fonterra is the world’s largest export dairy company
- •International tourism expenditure contributed $9.8 billion (16.1 %) to New Zealand’s total exports. •Domestic tourism expenditure increased 2.4 % ($328 million) to $14.2 billion. •Tourism generated a direct contribution to GDP of $7.3 billion, or 3.7 % of GDP. •The indirect value added of industries supporting tourism generated an additional $9.8 billion for tourism, or 5.0 % of GDP. •employed 110,800 full-time equivalents or 5.7 % of total employment in New Zealand. •Tourists generated $1.3 billion in GST revenue.
- Programme for International Student Assessment ranks New Zealand's education system as the 7th best in the world, with students performing exceptionally well in reading, mathematics and science.
- Economic slow-down following the global financial crisis in September 20082% decline in 2009, the economy pulled out of recessionAchieved 1.7% growth in 2010 2% in 2011 and 3% in 2012
- Like most OECD countries, New Zealand’s economy experienced an economic slow-down following the global financial crisis in September 2008. As in other advanced economies, business and consumer confidence declined. Unlike most OECD countries however, after a 2% decline in 2009, the economy pulled out of recession. It achieved 1.7% growth in 2010, 2% in 2011 and 3% in 2012. That compared with 0.3% growth in the UK and negative 0.9% in the euro area; 0.4% in Japan; 1.1% in Canada; and 1.6% in the USA.Recovery has been led by exports, with strong demand from our major trading partners Australia and China, who have been less affected by the crisis. Relatively strong Government accounts and a well-capitalised banking system have provided a stable base for the economy. These positives together with continued strong terms of trade and the boost to GDP from the rebuilding of Christchurch, have led to a solid and on-going growth.
- Free Trade Agreements Free Trade Agreements (FTAs) are designed to assist New Zealand exporters – by providing improved access to certain markets, and reducing trade barriers in those markets.New Zealand FTAs establish:preferential tariff rates for New Zealand goods in designated overseas marketsrules by which New Zealand goods can qualify for those preferential tariffs (rules of origin)customs procedures for determining which goods qualify for preferential tariffs under the FTA (rules of origin procedures)general principles for customs procedures among the signatories: these commit each country to the freeing-up of trade and to the provision of customs procedures which are always predictable, transparent and fair.Exporters looking to trade in these markets should first make sure that they:review the relevant FTA before exportingunderstand the preferential tariff rates that specifically apply to their products (most tariff rates will be phased out over time and gradually reduced to zero)establish whether or not their products qualify under the rules of origin fully understand and follow the rules of origin procedurescheck the specific FTA for the market in question (tariff rates, rules of origin and procedures vary between FTAs).Detailed information on all New Zealand’s FTAs is available on the website of the Ministry of Foreign Affairs and Trade (MFAT). The site contains links to useful tools and additional information to help exporters in particular markets – eg, tools to locate tariff rates under specific FTAs. There is also information on FTAs which are currently being negotiated. Details on all our current and future FTAs can be found at:
- New Zealand has long been an innovator in the development of energy, fuels, materials, and environmental technologies necessary to create a sustainable low carbon global economy. One of New Zealand Trade and Enterprise's goals is to introduce offshore investors and strategic partners to New Zealand companies that are developing clean technologies or projects.New Zealand generates up to 75 percent of its electricity from abundant and secure renewable energy sources such as hydro, geothermal and wind.These clean energy sources have low carbon intensity for industry, New Zealand is one of the few countries in the world with the potential to generate 100 percent renewable electricity.The country's agricultural sector produces a constant stream of new environmental science and practice, and national legislation is world-class in its promotion of sustainable resource management.
- Safe, stable and secure business environmentNew 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 2013)lack of corruption (Transparency International Corruption Index 2012)starting a business (World Bank Doing Business report 2013)Anti-corruption NGO Transparency International continued to rank New Zealand Number 1 for honesty and integrity in its public sector in 2012, the seventh 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 businessNew 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 businessNew 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 systemNew 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 taxno 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 economyNew 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 20 percent of GDP by the early 2020s. Read the Government's Budget Policy Statement 2012.legislative requirements to maintain public debt at prudent levelsbeing 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 assessmentmaintaining 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 marketsNew Zealand's geographic proximity and extensive free-trade agreements (FTA) provide access to key global markets.New Zealand currently has FTAs in place with:ChinaAustraliaVietnamPhilippinesCambodiaBruneiIndonesiaHong KongMyanmarThailandMalaysiaLaosSingaporeChileNegotiations 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 cultureNew 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 policiesNew 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.Abundant resourcesNew 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 freightNew 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 economyAssets 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.BankingThe Reserve Bank of New Zealand supervises New Zealand's banking system; its main function being to implement Government monetary policy according and 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.Sophisticated telecommunicationsNew 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.3G mobile networks are operating and the auction of 4G mobile spectrum is scheduled for the second half of 2013.
- Safe, stable and secure business environmentNew 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 2013)lack of corruption (Transparency International Corruption Index 2012)starting a business (World Bank Doing Business report 2013)Anti-corruption NGO Transparency International continued to rank New Zealand Number 1 for honesty and integrity in its public sector in 2012, the seventh 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 businessNew 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 businessNew 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 systemNew 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 taxno 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 economyNew 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 20 percent of GDP by the early 2020s. Read the Government's Budget Policy Statement 2012.legislative requirements to maintain public debt at prudent levelsbeing 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 assessmentmaintaining 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 marketsNew Zealand's geographic proximity and extensive free-trade agreements (FTA) provide access to key global markets.New Zealand currently has FTAs in place with:ChinaAustraliaVietnamPhilippinesCambodiaBruneiIndonesiaHong KongMyanmarThailandMalaysiaLaosSingaporeChileNegotiations 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 cultureNew 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 policiesNew 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.Abundant resourcesNew 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 freightNew 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 economyAssets 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.BankingThe Reserve Bank of New Zealand supervises New Zealand's banking system; its main function being to implement Government monetary policy according and 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.Sophisticated telecommunicationsNew 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.3G mobile networks are operating and the auction of 4G mobile spectrum is scheduled for the second half of 2013.
- 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.
- 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.