What you need to know if you want to start a business, buy an existing business or transfer your business to New Zealand
Knowing your future market and customers will be absolutely vital for a successful start-up.
If you are currently working in your own business, or if you have management experience in your area of work, you are already familiar with the process of establishing and running a business. This will of course be of huge advantage to you when establishing yourself in the business world in New Zealand.
However, you are entering a foreign market and are going to deal with customers from different backgrounds. You will also come across differences in company law and tax regulations, as well as some, maybe unexpected, aspects in New Zealand business etiquette.
Working with experienced New Zealand business advisers and accessing their local knowledge right from the beginning will be the key to your success.
A few topics to consider before you start:
- testing your business idea
- financing your business
- setting up accounting and record-keeping systems
- employing staff and dealing with professional advisors
- understanding tax
Step one: You need a Business Plan!
Although starting a business is relatively easy in New Zealand compared to other countries, you need to get it right.
- You need to have a business idea and
- write a business plan that will describe your service or the product you will be selling to your future customers.
- You need to work out a break even analysis to see if your business will make a profit.
- You will also have to do substantial market research to get an overview of the New Zealand market and analyse your potential competitors. Is your product or service going to be better than theirs?
Next: Your Marketing Plan
Now you will have to think of how to market your business in the New Zealand market. Who are your customers, where can you find them and how can you approach them?
The key is understanding who your customers will be and how you can offer your service or product to them so you will ultimately make a profit. To be able to do so you need a good insight of the New Zealand market and its customers.
What is the best structure for your business?
In New Zealand there are a few options to choose from for your business structure.
You can be a sole trader, work in a partnership or set up a limited liability company.
Starting out as a sole trader might be a good option to get started on a small scale but you will be personally liable for business debts should things not go well. Partnerships and companies are inexpensive to set up.
If you want to register a Limited Liability Company, you will do a name check first to ensure that the name you have chosen for your company is available by searching the New Zealand Companies Register at the Companies Office.
It is a good idea to talk to a New Zealand lawyer and tax adviser before deciding which business structure will work best for you.
Getting things right with the Tax Department, IRD
You will have to register with the Inland Revenue Department, no matter which business structure you will chose.
Register for Goods and Services Tax, GST?
If your total income is going to be over $60,000 per year you must be registered for GST and file regular GST returns (1, 2 or 6 monthly). GST registered businesses must add GST to all sales and then pass the collected GST to IRD.
You can claim a refund of GST paid on expenses. Your accountant will be able to set up your tax records and help you with filing your annual tax return and claiming tax deductible expenses.
Do you need staff?
If you want to employ somebody to work for you, you will have to comply with New Zealand employment law, use the appropriate employment agreements, keep records and manage pay, holidays, breaks and worker safety.
Ask us if you would like to get templates, examples and links to practical tools and more detailed information.
What kind of visa will you need to run a business in New Zealand?
If you want to be self-employed, an Entrepreneur Work Visa is the right program for you.
It is the first of two steps to obtain Permanent Residence in New Zealand as a business owner. Once you have been granted your Entrepreneur Work Visa and operated your business in New Zealand for two years or more, you can apply for an Entrepreneur Residence Visa. If you meet the fast track requirements of this category, you can apply after six months.
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Ask our Business and Investor Migration Expert
If you want to find out more about establishing your own business in New Zealand, contact Dr. Carsten Hallwass, the Business and Investor Migration Adviser at NZIC.Ask Dr.Carsten Hallwass for a Free Assessment