Getting your New Zealand business started on the right foot
Starting a business in New Zealand is much the same as any country. Remember though that New Zealand is home to only 4 million people, so the market will never be large.
Before starting your business, there are a minimum set of practical requirements of which you should be aware. These few, very basic items and processes will make life, and business, a lot easier for you.
A bank account for your money
Most New Zealand banks will offer excellent business services. To open a business account, they may also require identification, and are likely to run a credit check. Two of New Zealand’s main banks have dedicated business resource centres with a range of free business support content. Visit the Business Resource Centre.
Choosing a suitable trading name
You don’t register a business name in New Zealand. You can usually use any name you like unless, of course, someone else already is. You don’t want to invest in building up recognition of your trading name in the marketplace only to find that you have to change it later because it is confusingly similar to the name of some other business.
You will not be able to register a company name that conflicts with one already registered. However, if you wish to operate as a sole trader there is no central register. Check the Intellectual Property Office’s website to see if there is a similar registered trademark or brand name to the one you want already in use. You can also check the Yellow Pages and the UBD directories online. To be safe, it is recommended that you also search the Register on the Companies Office website for a possible name clash.
To secure your trading name, you can register your trademark or brand, or form a company (steering clear of any similar sounding names of companies in your industry).
Do I need a tax agent or accountant?
Inland Revenue prefers all business owners to have tax agents (generally an accountant) to process the business’s tax affairs, so it is important to contact an accountant well before the end of your first year’s trading in New Zealand. Your accountant will agree on systems with you and will be able to give you important advice on ways to save tax and minimise issues with the Inland Revenue Department.
Accounting costs can be reduced if your affairs are arranged in an orderly manner, using the processes your accountant prefers and understands. Inland Revenue offer a fantastic interactive business tool that will answer all your queries.
Goods and Services Tax (GST)
Two free booklets from Inland Revenue will give you a good overview of GST:
- GST Guide to registration: Do you need to register? (IR 365)
- GST Registration (IR 360)
The booklets are downloadable from the IRD website or obtainable from the nearest IRD office.
Should I register for GST?
Registering for GST is not compulsory until your business’s annual sales exceed NZ$60,000. However, as soon as you register, you can claim 12.5% GST on all you business expenses and purchases. Of course, you will also be required to pay 12.5% GST on all your business income and capital sales.
Further assistance
The main government portal for small businesses in New Zealand offers a wide range of business help and links to government and non-government resources, including a range of free online training modules.
The New Zealand Trade and Enterprise website has extensive information on starting a business in New Zealand. The Department of Labour website offers guidance and tools on employing and retaining staff, as well as health and safety.
What next?
Don’t take anything for granted, seek professional help before you start a business and consider living in an area before you commit. Buying a business in a new country before you manage to understand the local conditions will always be tough, but it can be ultimately very rewarding. Join business associations like the local Chamber or Commerce and other industry associations to get a balanced perspective.
Written by Glen Senior, The Small Business Company
Glen Senior is CEO of The Small Business Company (www.tsbc.co.nz)