Doing Business in
New Zealand
Produced by the UKTI Team at the British Consulate General in Auckland, New Zealand Contact: Deirdre Bonis Email: Deirdre.bonis@fco.gov.uk Last Updated: March 2011 The purpose of the Doing Business guides, prepared by UK Trade & Investment (UKTI) is to provide information to help recipients form their own judgments about making business decisions as to whether to invest or operate in a particular country. The Report’s contents were believed (at the time that the Report was prepared) to be reliable, but no representations or warranties, express or implied, are made or given by UKTI or its parent Departments (the Foreign and Commonwealth Office (FCO) and the Department for Business, Innovation and Skills (BIS)) as to the accuracy of the Report, its completeness or its suitability for any purpose. In particular, none of the Report’s contents should be construed as advice or solicitation to purchase or sell securities, commodities or any other form of financial instrument. No liability is accepted by UKTI, the FCO or BIS for any loss or damage (whether consequential or otherwise) which may arise out of or in connection with the Report.
Are you a member of a UK company wishing to export overseas? Interested in entering or expanding your activity in the New Zealand market? Then this guide is for you! The main objective of this Doing Business Guide is to provide you with basic knowledge about New Zealand ; an overview of its economy, business culture, potential opportunities and an introduction to other relevant issues. Novice exporters, in particular will find it a useful starting point. Further assistance is available from the UKTI team in New Zealand. Full contact details are available at the end of this guide.
Important Information - Sanctions and Embargoes Some countries may be subject to export restrictions due to sanctions and embargoes placed on them by the UN or EU. Exporting companies are responsible for checking that their goods can be exported and that they are using the correct licences. Further information is available on Business Link
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Content 1. Introduction ...............................................................................................................................................4 2. Preparing to Export to New Zealand ....................................................................................................11 3. How to do business in New Zealand....................................................................................................12 Recruiting and Retaining Staffing ................................................................................................16 Labelling and Packaging Regulations............................................................................................16 Getting your Goods to the Market ...................................................................................................17 Standards and Technical Regulation .............................................................................................17 Intellectual Property Rights ................................................................................................................17 4. Business Etiquette, Language and Culture..........................................................................................18 5. What are the challenges?.......................................................................................................................19 6. How to Invest in New Zealand ..............................................................................................................20 Financial Assistance...........................................................................................................................20 7. Contacts....................................................................................................................................................20 8. Resources/Useful Links...........................................................................................................................22
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1.
Introduction
New Zealand is a relatively easy country in which to conduct business due to a number of historical and business environment similarities it shares with the United Kingdom. New Zealand enjoys a long history of association with the UK and today the UK is New Zealand’s sixth-largest trading partner. New Zealand has a modern, prosperous and developed economy. With a small and sophisticated market New Zealand provides many opportunities for UK companies both experienced in and new to exporting. New Zealand’s lifestyle is often called relaxed with a moderate climate, open environment, reasonable public services, and relative security from war and terrorism. In general New Zealanders enjoy a comfortable standard of living. Strengths of the market In brief these are: • • • • • • • • •
Similar legal and financial systems to those in the UK Strong historical ties with anecdotally around 70% of the New Zealand population claiming links back to the UK Best placed to supply Pacific Islands A perfectly sized market for UK SME’s new to exporting One the least corrupt countries in which to do business (2010 Corruptions Perception Index) English speaking Many of the population travel widely – young New Zealanders continue to travel the world often using the UK as a base during their Overseas Experience (OE) holiday Free Trade Agreements with countries including Australia (CER), China (NZ-China FTA), Singapore (NZSCEP), and Thailand (NZTCEP). The New Zealand government continues to extend its reach into the wider global trading community with trade agreements currently under negotiation including Russia, Belarus and Kazakhstan (NZ-RBK), India (NZ-India FTA), and Korea (NZ-Korea FTA).
Opportunities in New Zealand New Zealand’s small market size has many opportunities to offer UK companies. Its size in particular makes the market a sound choice for UK SME companies new to exporting. The value of the UK’s reputation in making high-quality goods should not be forgotten in this market where high quality can compete with lower priced goods sourced from other countries. New Zealand imports a wide range of British goods and services, particularly in the following sectors: • • • • • • • • • •
Agriculture Biotechnology Creative Industries Education Food and Drink Giftware Healthcare & Pharmaceuticals ICT Marine Publishing 4
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Textiles
UK goods and services can also find a place in the New Zealand market in many other sectors such as Aerospace, Automotive, Clothing, Engineering, and Footwear. In general if the product is good and suits the local market then there is every chance it will sell in New Zealand. Contact the Auckland UKTI team for market assessments. Trade between UK and New Zealand UK exports to New Zealand were worth £437m (NZ$952m) in the 12 months end January 2011. Top 5 exports are from the automotive, pharmaceutical, and engineering sectors. Smaller value sectors such as beverages remain integral elements. The UK is New Zealand's sixth largest trading partner in twoway trade. New Zealand is one of the UK's top fifty export markets. New Zealand’s top 10 imports of main commodities from all countries are: • Petroleum and products • Mechanical machinery and equipment • Vehicles, parts, and accessories • Electrical machinery and equipment • Textiles and textile articles • Plastic and plastic articles • Optical, medical, and measuring equipment • Iron and steel, and articles • Pharmaceutical products • Paper and paperboard, and articles Source: www.stats.govt.nz Economic Overview New Zealand has a mixed economy which operates on free market principles. It has sizeable manufacturing and service sectors complementing a highly efficient agricultural sector. Exports of goods and services account for around one third of real expenditure GDP. Over the last quarter of a century, the New Zealand economy has changed from being one of the most regulated in the Organisation for Economic Cooperation and Development (OECD) to one of the least regulated. • •
Economic activity as measured by GDP was down 0.2 percent in the September 2010 quarter, following a 0.1 percent increase in the June 2010 quarter. Gross domestic product increased 1.4 percent in the year ended September 2010 compared with the year ended September 2009.
Other statistics as listed on the Statistics New Zealand website are: Gross domestic product (GDP): • Manufacturing was down 1.7 percent, and construction down 2.5 percent. On the expenditure measure of GDP: • The expenditure measure of GDP was down 0.4 percent in the September 2010 quarter. • Household consumption expenditure was up 0.5 percent. • Gross fixed capital formation was down 1.8 percent. Source: Statistics New Zealand www.stats.govt.nz 5
Response to and recovery from the 2008/2009 International Credit Crisis The New Zealand economy slid into recession in 2008. A number of issues resulted in a decline in domestic economic activity including a drought over the 2007/08 summer period leading to lower production of dairy products in the first half of 2008, high fuel and food prices, and high interest rates and falling house prices. Renewed optimism in the economy following the international credit crisis drove consumer and business confidence upwards, with a growth of 0.2% in the June 2009 quarter. This quarterly expansion marked the end of a five-quarter recession which began in March 2008. New Zealand's recession has been termed shallow in comparison to other OECD countries - New Zealand the seventh least affected out of the 30 member nations. In response to the international credit crisis, the Reserve Bank began lowering the Official Cash Rate (OCR) in July 2008 and introduced a range of facilities designed to ensure that adequate liquidity was available to the banking sector. The government provided further support including: • introducing retail and wholesale bank guarantees • personal income tax cuts on 1 October 2008 and 1 April 2009 • an accelerated package of ‘ready-to-roll' infrastructure projects spanning the housing, transport, education and energy sectors at an estimated cost of almost $500 million • a relief package designed to assist small and medium-sized businesses (which make up the largest proportion of New Zealand firms) in order to reduce compliance costs and improve the business environment in the face of the crisis. Source: New Zealand Treasury http://www.treasury.govt.nz/economy/overview/2010 Economic impact of the February 2011 earthquake in Christchurch A powerful earthquake on the 22nd of February devastated the Christchurch central business area as well as a number of suburbs resulting in severe structural damage to buildings, infrastructure and fatalities. The New Zealand economy had held up relatively well to recent recessionary forces but the February Christchurch earthquake has led to a damage estimate of NZ$11 billion and is likely to shave 1.5 percentage points from New Zealand’s 2011 GDP growth rate. GDP forecast for 2011 is expected to fall from 2% to 1.4%. Business and consumer confidence has been eroded. Opportunities for UK companies exist in rebuilding infrastructure. Economic impact of hosting the Rugby World Cup 2011 A report on New Zealand’s economy must take into account the expected impact on the economy around the Rugby World Cup 2011. The tournament will feature 20 teams, 48 matches, the final to be played at an expanded Eden Park, and the Tournament to be played over seven weekends during September and October 2011. •
RNZ 2011 announced in September 2006 that hosting RWC 2011 would generate more than $1.15 billion in total economic activity, and pump more than half a billion dollars into the New Zealand economy, according to an updated economic impact report prepared by Horwath Asia Pacific Ltd.
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According to the updated report, RWC 2011 will add $507 million to New Zealand’s gross domestic product, 23 per cent more than original forecasts prepared at the time of the bid to host the Cup.
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RWC 2011 will also provide the New Zealand Government an additional $112 million in tax revenue.
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Auckland, as host of the RWC 2011 Final, stands to gain around $240 million in additional gross domestic product and $262 million of total direct additional expenditure in the Auckland economy.
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Based on Australia’s experience of hosting RWC 2003, New Zealand can expect to attract as many as 66,000 international supporters, 2,500 international media, and up to 2,500 corporate and VIP guests throughout the Tournament.
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RWC 2007 brought in 350,000 additional visitors to France in September to October 2007 delivering a total economic impact estimated at up to £2.1 billion (NZ$5.7 billion).
Source: http://www.rugbyworldcup.com/destinationnewzealand/aboutrnz/factsheet.html Population New Zealand’s population currently stands at around 4.4 million and had an estimated growth in resident population of 1.1 percent in the December 2010 year. Historically, natural increase has been the dominant component of population growth. Over the last 40 years, natural increase has accounted for around 80 percent of New Zealand's total population growth. During the December 2010 year, natural increase accounted for 77 percent of population growth. New Zealand has an ageing population because of a shift to sustained low fertility and low mortality rates. At 31 December 2010, half of New Zealand's population was over 36.7 years, compared with a median age of 34.5 years a decade earlier. The median age for males is now 35.5 years, while for females it is 37.7 years. The number of centenarians (people aged 100 years and over) has increased significantly over the last 60 years. As of 2011, there are likely to be 400–500 centenarians currently living in New Zealand. Of these, fewer than 40 would be aged 105 years or over. At 31 December 2010, the population aged 15–39 years remained the largest population group, accounting for 34 percent of the total population. New Zealand's ethnic make-up has continued to change, according to 2006 Census results. European remained the largest of the major ethnic groups, with 2,609,592 people (67.6 percent of the population) in 2006. The Māori ethnic group is the second largest, with 565,329 people (or 14.6 percent). Of the major ethnic groups, the Asian ethnic group grew the fastest between 2001 and 2006, increasing from 238,176 people in 2001 to reach 354,552 people in 2006 (an increase of almost 50 percent). Those identifying with the Pacific peoples ethnic group had the second-largest increase from the 2001 Census, up 14.7 percent to total 265,974 people. New Zealand's Māori, Asian, and Pacific populations will continue to grow. The 'European or Other (including New Zealander)', Māori, Asian, and Pacific populations will all age, reflected in rising median ages and increasing proportions of people in the older ages.
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Estimated population projections: • • • •
New Zealand's European or Other population is projected to reach 3.47 million by 2026, an increase of 260,000 (0.4 percent a year) over the estimated resident population at 30 June 2006 of 3.21 million. New Zealand's Māori population is projected to reach 810,000 by 2026, an increase of 190,000 (1.3 percent a year) over the 2006 estimate of 620,000. New Zealand's Asian population is projected to reach 790,000 by 2026, an increase of 390,000 (3.4 percent a year) over the 2006 estimate of 400,000. New Zealand's Pacific population is projected to reach 480,000 by 2026, an increase of 180,000 (2.4 percent a year) over the 2006 estimate of 300,000.
The 2006 Census lists around 70,000 people identifying with the British ethnic group. Over 2.3 million of the population identified with the New Zealand European ethnic group. Please note: The 2011 Census will not be held due to the Christchurch earthquake. Source: Statistics New Zealand www.stats.govt.nz Given New Zealand’s history it is natural that a large proportion of the population will claim links back to the UK. Political Overview New Zealand is a parliamentary democracy and a constitutional monarchy with Queen Elizabeth II as the Queen of New Zealand. Elections are held every three years under a Mixed Member Proportional (MMP) system. There are seven political parties represented in the 49th Parliament by 122 members of Parliament. These include 63 general electorate members, 7 members representing Māori electorates, and 52 members selected from party lists. The seven parties are ACT New Zealand, Green Party, Labour Party, Māori Party, National Party, Progressive, and United Future. The New Zealand National Party (National Party) is the largest partner in the National-led Government. It has 58 members of Parliament in the House of which 41 represent electorates. The National party was elected in November 2008 (following a consecutive 3 term government led by the Labour Party). The current Party Leader and Prime Minister of New Zealand is the Hon John Key. National entered into support agreements with ACT New Zealand, United Future, and the Maori Party. The New Zealand Labour Party (Labour Party) has 42 members of Parliament, led by Hon Phil Goff. Source: New Zealand Parliament http://www.parliament.nz/en-NZ/MPP/Parties/ Getting here and advice about your stay
FCO Travel Advice The FCO website has travel advice to help you prepare for your visits overseas and to stay safe and secure while you are there. For advice please visit the FCO Travel section 8
The Christchurch Earthquake A powerful earthquake on the 22nd of February devastated central Christchurch resulting in severe structural damage to buildings, infrastructure and fatalities. It is expected that the central city area and surrounding suburban areas will be rebuilt. All New Zealand airports, including Christchurch are open as are all main roads. If your plans include Christchurch city, you are encouraged to contact your travel agent, accommodation, attraction or tour provider directly to confirm upcoming bookings. http://www.tourismnewzealand.com/news-and-features/christchurch-earthquake/
Getting here Passports/visas All visitors must have a valid passport, including return tickets. British passport holders can enter New Zealand as a visitor for up to six months on arrival without a visa, provided they can satisfy an Immigration Officer that they meet the requirements of the rules. Anyone wishing to work in New Zealand requires a work visa. For further information about entry requirements please contact the London branch of Immigration New Zealand: Tel: within the UK: 090 6910 0100 (calls cost £1.00 per minute) Tel: from outside the UK: +44 1 344 716 199 (normal toll charges apply) Website: www.immigration.govt.nz/Branch/LondonBranchHome Health advice New Zealand is considered one of the healthiest countries in the world in which to travel and no special health precautions are necessary. •All local water supplies are drinkable and food supplies meet strict New Zealand government regulations. •NZ has no vaccination requirements, however the World Health Organisation recommends that all travellers should be covered for diphtheria, tetanus, measles, mumps, rubella, chicken pox, polio and Hepatitis B regardless of their destination. •Special care should be taken in exposure to the sun. The ozone layer over New Zealand is thinner than elsewhere and burn times are much shorter than the UK. •Research has shown that asthma sufferers may be more at risk of an attack in New Zealand and sufferers should be suitably prepared. •Outbreaks of avian influenza ('bird flu') in Asia and Europe have heightened international health agencies' concern about the possibility of an influenza pandemic occurring. There are no recorded cases of bird flu in New Zealand. Information on health hazards, and precautions to take when travelling abroad can be found in the leaflet 'Health Advice for Travellers' available from main Post Offices. It is preferable where possible to seek treatment only after consultation with the British Consular representative. There is a limited arrangement with New Zealand covering emergency medical treatment; visitors are, however, strongly advised to take out comprehensive medical insurance to cover treatment outside this arrangement. For more information please visit the Ministry of Health website www.moh.govt.nz.
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Travelling to New Zealand Air New Zealand is well served by daily flights from the UK. Flight times vary between 23 and 27 hours. Services include British Airways/Qantas via Australia and Los Angeles, Air New Zealand via Los Angeles and Hong Kong, Air New Zealand/Singapore Airlines via Singapore, Thai Airways via Bangkok, Cathay Pacific via Hong Kong, Emirates via Australia and Dubai, Malaysia via Kuala Lumpur, Virgin via Los Angelas. There are two international gateways; Auckland and Christchurch. Wellington, Palmerston North, Hamilton and Dunedin receive international (Australia and Pacific Islands) flights. Airport departure tax From 1 July 2008 international passengers are no longer required to pay a NZ$25.00 departure fee. A Passenger Services Charge (PSC) is levied on airlines. Travelling in New Zealand New Zealand has an extensive network of air, train and road services. Complete information about all travel services available in New Zealand can be obtained from Tourism New Zealand www.newzealand.com/travel. Air New Zealand is well served by air transport with all major cities and towns linked to the national network. The main domestic airlines are Air New Zealand www.airnewzealand.co.nz and Qantas http://www.qantas.com.au/regions/dyn/home/qualifier-region-nz, with commuter airlines linking the smaller towns. Travel times by air: Auckland-Wellington 1 hour Auckland-Christchurch 1 hour 30 minutes Auckland-Sydney 3 hours 20 minutes Rail New Zealand has a limited railway network though train travel is reasonably fast and the trains modern and comfortable. Tranz Scenic run three main passenger services; the Overlander runs from Auckland to Wellington, the Tranz Coastal from Picton to Christchurch and the Tranz Alpine from Christchurch to Greymouth. For further information contact TranzScenic www.tranzscenic.co.nz. Roads There are over 96,000 km of roads, over 11,000 km of which are State highways. Traffic travels on the left side of the road with a speed limit of 100km/h on the open road and 50km/h in residential areas. Greater Auckland is spread out over a wide area with many industrial and commercial centres several miles out from the city centre. Because public transport is not well developed for these districts, and taxis can be fairly expensive, many visitors prefer to make use of hire cars. Car Hire Self-drive cars are available in the main towns. Hire is by day or week. Visitors will be required to produce a valid driving licence before they can take delivery of a hire car. British driving licences are accepted for this purpose. Arrangements can be made with hire firms where a car hired in one town can be surrendered in another, usually at no extra cost. For comprehensive information about driving in New Zealand visit the Land Transport NZ website www.ltsa.govt.nz. 10
Taxis Taxis are available in nearly all cities and towns in New Zealand. The NZ Taxi Federation has a list of all federation approved service providers http://www.taxifederation.org.nz/ Buses Good bus services operate in most of the larger towns of New Zealand. InterCity is the main operator for long distance travel www.intercitycoach.co.nz. Getting to and from the Airport All airports are well served by shuttle buses and taxis. Auckland airport is 25km from the CBD, Wellington 8km and Christchurch 12km. Specialist Travel Agents London-based travel agents specialising in the region are advertised in the UK press. For travel agents in New Zealand see the New Zealand Telecom Yellow Pages on arrival. Additional information Hotels New Zealand has a wide range of modern hotels and motels throughout the country. Tariffs vary significantly depending on the hotel, season and the locality. When making bookings it is worth enquiring about any business or corporate rates. Detailed information about accommodation can be obtained from Tourism New Zealand. Restaurants In addition to the restaurants in the hotels, there are good restaurants in all main towns. Usual liquor licensing hours in hotels are from 11am to 11pm. Most hotels have later hours on Friday and Saturday evenings. Licensed restaurants may serve liquor to diners from noon one day to 1.00 am on the following day. A number of unlicensed restaurants have permits whereby patrons may bring their own liquor (BYO) and some are both licensed and BYO. The New Zealand Yellow Pages have listings of hotels and restaurants www.yellowpages.co.nz. For a comprehensive listing of restaurants throughout New Zealand you can also visit www.eatout.co.nz. Note: New Zealand’s Smoke-Free legislation covers licensed premises and workplaces. For further information visit New Zealand Ministry of Health http://www.moh.govt.nz/smokefreelaw. Electricity The electricity supply is 230/250 volts AC, 50 cycles. Plug fittings are all of a three flat pin type which are not used in Europe. Plug conversion sockets are widely available. Most hotels, motels etc have razor points. Bayonet lamp fittings are widely used. Tipping In general, tipping is not a common practice in New Zealand. In some high-tourist destinations such as Rotorua and Queenstown the practice is becoming accepted. The decision lies in the hand of the visitor.
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Preparing to Export to New Zealand
Despite the relative ease with which business can be conducted in New Zealand it is important to fully prepare before arriving in New Zealand. Market research is vital to success. The UKTI team in Auckland strongly advise UK companies to both research and visit the market. First-hand experience
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alongside local UKTI guidance of the market is highly valuable. The TAP Solo and other UKTI services can put the UK company representative in the right place at the right time. UKTI’s team in Auckland, New Zealand can provide a range of services to British-based companies wishing to grow their business in the New Zealand market. Our services include the provision of market information, validated lists of agents/potential partners, key market players or potential customers; establishing the interest of such contacts in working with the company; and arranging appointments. In addition, they can also organise events for you to meet contacts or promote a company and its products/services.
You can commission these services under which are chargeable and operated by UK Trade & Investment (UKTI) to assist British-based companies wishing to enter or expand their business in overseas markets. Under this service, the Embassy's Trade & Investment Advisers, who have wide local experience and knowledge, can identify business partners and provide the support and advice 3.most relevant How to docompany's business in needs NewinZealand to your specific the market. To find out more about commissioning work, please contact your local UKTI office. See
www.ukti.gov.uk What companies should consider when doing business
New Zealand is one of the least corrupt countries and as such is a relatively easy country to do business with. New Zealand’s closeness in terms of distance and free trade agreements with Australia and Asian countries makes New Zealand companies well-versed in the business of importing and exporting. UK companies should note that many New Zealand firms rank at the top in some specialist sectors (for example Weta Workshop for their work on animation in films such as the Lord of the Rings Trilogy). New Zealand is a modern sophisticated country.
Gateways/Locations – Key areas for business With a third of New Zealand’s national population (around 1.3 million) living in the Auckland region this must be seen as one of the key areas for business. It is the largest industrial and commercial centre, with a major port and the main international airport in New Zealand. Wellington is the capital city. It is the seat of government, and a major port. Christchurch (population around 382,000) is the major centre of the South Island served by an international airport and the large port of Lyttelton. The city has an increasing output in science and technology and is an important agricultural, industrial and trading centre. Other cities include Hamilton, Tauranga, New Plymouth, Dunedin and Invercargill.
Market entry and start up Considerations Representatives in the market New Zealand importers, exposed to international competition and the proximity of the Asian market, have become experienced world traders, keenly aware of prices and margins. Direct importing by retailers occurs more frequently with the resulting demise of many traditional middlemen. Three main distribution options for UK exporters are: 12
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appoint a wholesaler sell direct to importing retailers appoint sales agents and sub-contract logistics functions to third parties
Most New Zealand importers travel regularly to the major international trade fairs and are therefore well aware of new trends and opportunities. Internet, email and increasingly e-commerce are the norm in NZ business. Most NZ agents or distributors will want to operate on an exclusive basis due to the relatively small size of the market. It is important to offer support to any agent or distributor through regular correspondence and visits (these can be part-funded by the UKTI Market Visit Support service). It is advisable to offer support for marketing either in the form of finance or by providing point of sale and marketing merchandise. It is generally advised not to appoint an agent in Australia to look after New Zealand unless the importer has a good presence in both countries with an adequate branch structure. Importers tend to concentrate on their home markets. Although the economies of both countries are becoming increasingly integrated they are not a single market. Some New Zealand importers also market into the Pacific Islands and the potential in these countries should be noted. For further information visit the New Zealand Importers Institute www.importers.og.nz.
Customs and Regulations Import controls There are no import licence requirements (removed in July 1992) or quotas in New Zealand. All imports require customs clearance once they cross the border. They are generally processed by a nominated Customs Broker. New Zealand Customs Service PO Box 29 Auckland New Zealand Tel: +64 9 359 0055 Fax: +64 9 359 6731 Email: feedback@customs.govt.nz (general enquiries) Website: www.customs.govt.nz (indicative rates can be found in the Working Tariff Document of New Zealand within the Library section on the Customs website) National Tariff Advisory Unit New Zealand Customs Tel: +64 9 473 6099 Fax: +64 4 499 7918 Email: ntau@customs.govt.nz The website for the NZ Importers Institute also provides useful information: Email: info@importers.org.nz Website: info@importers.org.nz Import duty concessions are usually granted when there are no suitable alternatives from NZ manufacturers and are usually available for use by all importers. Applications can be made to NZ Customs for interpretations of concessions. (Cost approx. NZ$40). If a concession is possible (and is
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not already in place) it can be applied for through the Ministry of Economic Development www.med.govt.nz (cost approx. NZ$200.) Additional taxes Goods and Services Tax (GST) With very few exceptions, goods imported into New Zealand are liable for Goods and Services Tax (GST) of 15 percent. GST is payable on the sum of following amounts: • the Customs value of the goods • any import duty, anti-dumping and countervailing duties, ALAC or HERA levies payable (see above) • the freight and insurance costs incurred in transporting the goods to New Zealand. GST is an indirect tax that is imposed on each sale or supply of goods and services starting from production and ending with the sale to the final consumer. Intermediate suppliers of goods and services receive a credit for GST paid so that the cost of the GST is borne only by the final consumer. Import Entry Transaction Fee An Import Entry Transaction Fee of $25.30 (GST inclusive) is payable on every commercial import entry and import declaration for goods with a duty and GST liability of $50 or more. A biosecurity risk screening levy of $12.77 is also collected by Customs on behalf of the Ministry of Agriculture and Forestry/Biosecurity New Zealand (MAFBNZ). The total, NZ$38.07, is collected at the same time as duty and/or GST. This is charged and shown separately on Deferred Payment and Cash Statements. The fee is included with the Duty and GST amount shown on the "Cleared Entry Message" received by importers and Customs Brokers who lodge electronic import entries. For further information visit New Zealand Customs www.customs.govt.nz. Controls on Trading The Commerce Act 1986 and the Fair Trading Act 1986 are New Zealand’s competition laws, aimed at protecting the competitive practice. Acts can be viewed at www.legislation.govt.nz • The Commerce Act 1986 The Commerce Act prohibits anti-competitive collusive and unilateral behaviour, and mergers that create or strengthen a dominant position in the market. The Commerce Commission is the public enforcement agency. • Fair Trading Act, 1996 This Act consolidates the law on misleading advertising: prohibits deceptive or misleading conduct and false representations about the provision of goods and services, prohibits certain unfair trading practices and provides for new consumer information and product safety standards. Enforcement is undertaken by the Commerce Commission. • Consumer Guarantees Act, 1993 The Act, administered by the Ministry of Consumer Affairs www.consumer-ministry.govt.nz creates statutory guarantees, which are given automatically every time a trader supplies goods or services to a consumer. This includes all items bought for everyday use. It includes regulations that manufacturers/importers must ensure that all goods are of acceptable quality i.e. they must be free from minor faults, they must be safe and durable and the goods must 14
correspond with any description, sample or demonstration model which is given to the consumer. In addition the law enforces that consumers should pay no more than a reasonable price unless a price has been agreed. The Ministry of Consumer Affairs Trading Standards Service has a consumer safety function- they educate consumers and traders in identifying safe products and using them safely. The Ministry can suggest modifications to make a product safe, request that unsafe products be removed from sale, assist companies recall unsafe products and help develop voluntary standards. Parallel Importing Since May 1998, an amendment to the Copyright Act has permitted the parallel importation of products subject to copyright (with the exception of medicines). This means that, providing a product was lawfully made, anybody may import it into New Zealand, with or without the permission of the copyright owner, and notwithstanding any exclusive distribution agreements the copyright owner may have entered into with other parties. While there has been no discernible change in consumer buying habits, and nobody has yet established dedicated ongoing lines of supply to bypass authorised suppliers, the ability for this to occur in the future has implications for British traders looking to appoint agents (and those renegotiating existing agency agreements) in New Zealand.
Legislation and Local Regulations New Zealand is a country with common historical ties, language, business and legal structures to the United Kingdom. As a result of a number of years of free market economic policies New Zealand has one of the most open competitive economies in the world with zero corruption. All legislation relating to the conduct of business and the operation of companies in New Zealand is enacted by New Zealand's parliament and administered by New Zealand government agencies. The Commerce Act 1986 provides the framework for promoting competition in markets for the long-term benefit of consumers. There are no import licence requirements or quotas in New Zealand. All imports require customs clearance once they cross the border. For further information visit New Zealand Customs Service http://www.customs.govt.nz and New Zealand Ministry of Foreign Affairs and Trade http://www.mfat.govt.nz and New Zealand Companies Office www.companies.govt.nz.
Responding to Tenders Tenders can be found on various websites such as GETS (www.gets.govt.nz), LGTenders (www.lgtenders.co.nz), and Tenderlink (www.tenderlink.com). As with all business communication with New Zealand companies responses are expected on time. UK companies should look carefully at tender documentation and follow rules pertaining to each tender. New Zealand has zero corruption so bribes are not the norm in New Zealand. Tenders issued by the New Zealand Government can be accessed via the New Zealand Government Electronic Tenders Services website www.gets.govt.nz. Registration is required and is a fast and easy 15
process. Note some tenders on this site tend to have relatively short time-frames and a UK company will find strong competition from local companies who may already have inside information about new tenders. UKTI staff based in Auckland have access to various tender databases and submit information about tenders as Business Opportunities on the www.ukti.gov.uk website. Contact UKTI Auckland for more information about tenders.
Recruiting and Retaining Staffing New Zealand's deregulated labour market is based on voluntary union membership, individual employment contracts, and proactive recruitment of skilled overseas workers. It has a highly educated and multi-skilled workforce. New Zealanders are famed for their "can do" and "Kiwi know-how" attitude. The latest data released by Statistics New Zealand in the Household Labour Force Survey: • During the December 2010 quarter, the unemployment rate rose by 0.4 percentage points to 6.8 percent. • The labour force participation rate decreased to 67.9 percent in the December 2010 quarter. • This is the lowest labour force participation rate since the March 2008 quarter. • During the December 2010 quarter, unemployment increased by 8,000 people (5.1 percent) to 158,000. • Employment decreased by 11,000 people (0.5 percent) during the December 2010 quarter, to 2,182,000. • Annually, employment increased by 27,000 people (1.3 percent). Source: http://www.stats.govt.nz/browse_for_stats/work_income_and_spending/employment_and_unemploy ment/HouseholdLabourForceSurvey_HOTPDec10qtr.aspx The employment of staff is done so in accordance with the Employment Relations Act 2000. A key principle of this act is that parties to employment relationships must deal with each other in good faith. For further information visit New Zealand Department of Labour www.dol.govt.nz, and Immigration New Zealand www.immigration.govt.nz.
Labelling and Packaging Regulations Labelling and packaging regulations in New Zealand vary depending on the type of product being sold. As a general rule, British suppliers would be well advised to label their goods "Made in England", "Made in Scotland", etc. Such indications have a much greater attraction in New Zealand where there is a traditional preference for goods made in the UK. For some products, such as clothing and footwear, country of origin labelling is compulsory. Information on fibre content labelling, care labelling and country of origin labelling for clothing and textiles can be found on New Zealand’s Commerce Commission website www.comcom.govt.co.nz. Packaging and labelling requirements for food and beverages are outlined on the New Zealand Food and Safety Authority’s website www.nzfsa.co.nz. For specific information regarding regulations for other types of goods please contact the UK Trade & Investment in New Zealand: Tel: + 64 9 303 2973 Email: trade_enquiries.auckland@fco.gov.uk 16
Getting your Goods to the Market Customers in New Zealand will expect products and services to be delivered on time. The main delivery options for New Zealand are sea freight, airfreight, post, air parcel post, and express or courier service. The best delivery method depends on speed, cost, reliability and product requirement (e.g. fragile or hanging garments). For all methods, except post, it is often easier to use a freight forwarder. Forwarders should be approached in the early stages of market research rather than waiting until the goods are ready to go.
Standards and Technical Regulation Standards New Zealand is the trading arm of the Standards Council - a crown entity operating under the Standards Act 1988. The Standards Council, an appointed body with representatives from all sectors of the community, oversees the development and adoption of Standards and standards-related products. The information centre can provide standards information that ranges from the availability and price of a standard to complex research into technical requirements for export markets. Standards NZ 155 The Terrace Private Bag 2439 Wellington Tel: +64 4 498 5990 Fax: +64 4 498 5994 Email: snz@standards.co.nz Website: www.standards.co.nz
Intellectual Property Rights Manufacturers and traders are strongly advised to patent their inventions and register their trademarks in New Zealand. Patent and trademark law is briefly described below, but it must be noted that such law is subject to change. The Intellectual Property Office of New Zealand (IPONZ) is the government agency responsible for dealing both with patent applications and the registration of trademarks. For more detailed and up-to-date information about patents and trademarks visit the IPONZ website www.iponz.govt.nz . Intellectual Property Rights IP rights are territorial, that is they only give protection in the countries where they are granted or registered. If you are thinking about trading internationally then you should consider registering your IP rights abroad. Patents The two main criteria for granting a patent in New Zealand are that it is a “manner of new manufacture� and that a description of the invention has not been published in New Zealand prior to the filing date of the application. The grant of a patent for an invention provides the owner with a right to exclude others from making, using or selling the patented invention during the term of the patent. In return the owner must make public a complete description of the invention. A patent will last for twenty years from the date that the Intellectual Property Office of New Zealand receives a complete application provided that the renewal fees are paid at the end of the fourth, seventh, tenth and thirteenth years of the patent’s existence. This patent will only protect your invention within New Zealand.
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New Zealand is party to the Paris Convention for the Protection of Industrial Property which entitles residents of other treaty countries to a one year priority right for patents. Trademarks In New Zealand protection is provided to registered trademarks through the Trademarks Act 2002. According to this act any sign capable of being represented graphically and distinguishing the goods and services of one person from those of another can be registered as a trademark. Once a trademark is registered the owner has the exclusive right to use that trademark for a period of ten years from the date the IPONZ receives the application and registration is renewable for further periods of ten years thereafter. As with patents, a New Zealand registered trademark will only receive protection in New Zealand. Trademark applications can be lodged online at http://www.iponz.govt.nz. Copyright New Zealand’s Copyright Act 1994 protects the same wide range of copyright works as are protected by UK copyright legislation. As both countries are party to the Berne Convention for the Protection of Literary and Artistic Rights, the works of UK nationals and works published in the UK are entitled to the same protection as New Zealand grants its nationals. Although not legally required, it is a good idea to include a copyright statement of notice on a work.
4.
Business Etiquette, Language and Culture
Around 70% of New Zealanders claim at least some British Ancestry and British visitors will usually feel quite at home. New Zealanders tend towards informality; visitors may soon find themselves addressed by their Christian or first names. Internet/email Due to New Zealand's isolated geographical location and time difference with the rest of the world email, e-commerce and the internet are all playing a major part in the way New Zealanders do business. UK companies visiting New Zealand should have an e-mail address on their business cards. New Zealand companies will expect prompt responses to email communications. Per capita, New Zealand is one of the most Internet connected nations in the world and most New Zealand companies now have their own website. Business is likely to be done by email rather than fax. All hotels provide internet link facilities and there are numerous cyber cafes in the larger towns and cities.
Language English is the day-to-day language for most New Zealanders. New Zealand has three official languages – English, Maori, and Sign Language.
Meetings and Presentations New Zealand companies generally will find time to fit in a meeting with a UK representative. It is important to make sure the right contact is sought for the meeting. However, introductions to more suitable contacts can always be made if the initial contact is not quite the right decision maker. UKTI staff can help pinpoint the right contact.
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Business meetings can be conducted in a number of ways from casual meetings on-site or at cafes to formal board meetings dependant on the nature of the product and sector. Showing up at your meeting late is not a good start to any potential business relationship. If you know you are going to be late do contact the New Zealand company to re-schedule if possible.
Negotiations When negotiating with New Zealand companies do keep in mind they will be keenly aware of costs once freight and mark-ups for example are taken into account. Price is always a key factor – if the product is seen to have a definite place in the market but is priced at too high a level the importer will be unlikely to agree on distribution. Remember New Zealand is a small market. The success of any business relationship will very much depend on the nature of the product or service and the level of local competition. Personal contact and visits are important and is often seen by New Zealand companies as a measure of the UK company’s interest in the local market.
5.
What are the challenges?
With New Zealand’s reputation as one of the least corrupt countries with which to do business there are few challenges. Some might perceive freight costs as a deterrent but in reality freight costs are not a major negative element. Challenges that UK companies should be aware of are: • • • •
Product suitability to the local market Local competition Price Finding the right distributor
Getting Paid - Terms of Payment Generally speaking, any of the customary methods of payment used in international commercial transactions can be used when doing business with New Zealand companies. Companies should contact an international branch of their own bank to advise the best route for their money to be transferred to the UK. Banks can also give advice on credit management and short-term credit insurance and factoring.
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6.
How to Invest in New Zealand
New Zealand’s efficient, market-driven economy delivers key benefits to investors, including business stability, extensive free-trade agreements, and active government support for investment. New Zealand is an export nation connected locally and globally by efficient technology and logistics. New Zealand has fast digital and wireless networks. New Zealand has efficient ports, a wide range of global airline services, and high-capacity submarine fibre-optic cables. New Zealand’s business-friendly taxation system supports capital development, research and development and international investment. Flexible labour policies ensure low employee add-on costs and minimal losses of work days to industrial action. New Zealand's competitive property and telecommunications costs also attract multinational investment projects to New Zealand. For further information visit Investment New Zealand www.investmentnz.govt.nz.
Financial Assistance The Reserve Bank of New Zealand, whose main function is to implement government monetary policy according to annual directives, supervises New Zealand's banking system. It also registers and supervises other banks. There are several major trading banks and numerous other banking institutions. Many of the big international banks are represented in New Zealand. For further information visit the Reserve Bank of New Zealand www.rbnz.govt.nz.
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Contacts
If you have a specific export enquiry about New Zealand which is not answered by the information on this report, you may contact: UK Trade & Investment Enquiry Service Tel: +44 (0)20 7215 8000 Fax: +44 (0)141 228 3693 Email: enquiries@ukti.gsi.gov.uk UK Offices Jeffrey Williams Australasia Level 1, 1 Victoria Street LONDON SW1E 6SW Tel: 020 7215 8293 Unit Fax no: 020 7215 8313
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If you prefer to contact the team in New Zealand direct, contact: British Consulate General Level 17, 151 Queen Street Private Bag 92014 Auckland 1 New Zealand Tel: +64 9 303 2973 Fax: +64 9 303 1836 Email: trade_enquiries.auckland@fco.gov.uk Contact: Deirdre Bonis Trade Development Officer Market Advisors in Auckland are (email trade_enquiries.auckland@fco.gov.uk): Barbara Harris Deputy Director, Trade and Deirdre Bonis Trade Development Officer Sector Portfolio: Business & Consumer Services; Clothing, Footwear & Fashion; Defence, Fire, Police & Security Industries; Creative & Media; Education & Training; Financial Services; Franchising; Food & Drink; Giftware, Jewellery & Tableware; Household Goods, Furniture & Furnishings; Leisure & Tourism; Marine; Paper & Printing; Sports & Leisure Infrastructure; Textiles & Carpets Paul Tuckley Trade Development Manager and Hamish Jenkin Trade Development Officer Sector Portfolio: Aerospace, Agriculture, Horticulture & Fisheries; Automotive; Biotechnology & Pharmaceuticals; Chemicals; Construction; Electrical, Energy & Power; ICT; Mechanical & Process Engineering; Environment & Water; Healthcare & Medical; Metals & Minerals; Oil & Gas; Ports & Logistics; Transport & Railways Kirsty Balfour Marketing & Research Assistant Sector – all sectors Paul Wilkinson Inward Investment Manager and John Paton Inward Investment Officer Inward Investment to the UK UK Trade & Investment can help you make the most of these opportunities and help you plan your approach to the market. You may find out more about the range of services available to UK companies trading internationally through your local International Trade Team. We hope that you have found this guide useful. For further information, please contact your International Trade Adviser or one of the UKTI team in New Zealand.
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8.
Resources/Useful Links
Business Link: International Trade Business Link’s International Trade pages provide an overview of export basics including licensing, customs procedures, classifying and movement of goods, other regulatory information and export paperwork issues. It also introduces exporters to the UK Trade Tariff. Essential reading for exporters! Find out more at: http://www.businesslink.gov.uk/bdotg/action/layer?r.s=tl&r.lc=en&topicId=1079717544
Country Information: BBC Website: http://news.bbc.co.uk/1/hi/country_profiles/default.stm FCO Country Profile: http://www.fco.gov.uk/en/travel-and-living-abroad/travel-advice-by-country/country-profile/ Culture and communications: CILT – National Centre for Languages - Regional Language Network in your area: http://www.cilt.org.uk/workplace/employer_support/in_your_area.aspx Kwintessential culture guides: http://www.kwintessential.co.uk/ Customs & Regulations: HM Revenue & Customs: www.hmrc.gov.uk Import Controls and documentation (SITPRO): http://www.sitpro.org.uk Economic Information: Economist: http://www.economist.com/countries/ Export Control Export Control Organisation: http://www.berr.gov.uk/whatwedo/europeandtrade/strategic-export-control/index.html/strategicexport-control/index.html Export Finance and Insurance: ECGD: http://www.ecgd.gov.uk/
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Intellectual Property Intellectual Property Office: www.ipo.gov.uk Market Access Market Access Database for Tariffs (for non-EU markets only): http://mkaccdb.eu.int/mkaccdb2/indexPubli.htm SOLVIT – Overcoming Trade Barriers (EU Markets only) www.bis.gov.uk/EUMarketAccessUnit Standard and Technical Regulations: British Standards Institution (BSI): http://www.bsigroup.com/en/sectorsandservices/Disciplines/ImportExport/ National Physical Laboratory: http://www.npl.co.uk/ Intellectual Property - http://www.ipo.gov.uk/ Trade Statistics: National Statistics Information: http://www.statistics.gov.uk/hub/index.html UK Trade Info: https://www.uktradeinfo.co.uk/ Travel Advice: FCO Travel: http://www.fco.gov.uk/en/travel-and-living-abroad/ NHS: http://www.nhs.uk/nhsengland/Healthcareabroad/ Travel health: http://www.travelhealth.co.uk/
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