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When visiting New Zealand, it’s easy to note that it is a pretty great market for a business. New Zealand’s economic advantages and socio-political landscape make it attractive not just for business owners that reside within New Zealand, but also those from overseas.
This usually begs the question – “Can a tourist start a business in New Zealand?”.
The answer is both yes and no.
A person visiting New Zealand as a tourist cannot start a business in New Zealand as the conditions of their visa are unlikely to allow this. However, this does not mean that only people that live in New Zealand can start and operate a business here.
In fact, the New Zealand market welcomes overseas business owners and has greatly benefited from hosting businesses from all over the world both economically and by the increase in consumer choices.
In order to become a part of this, you will first need to attain the kind of visa that permits you to conduct business in New Zealand. Then you’re all set to go!
Here at Sprintlaw, while we cannot take care of your visa requirements, we can help you with the business set up process provided that your visa allows you to do so.
Keep reading to find out more about starting a business in New Zealand as a non-resident.
What Is The Business Environment Like In New Zealand?
Currently, New Zealand sits at number 1 out of 190 countries for its ease of doing business. The New Zealand economy, governance, social and political landscape all contribute to making it a highly ranked region in terms of running a business.
Therefore, you can expect a healthy business environment that is supportive of business endeavours.
However, it’s important to do your own research before starting a business in any region beforehand. Assess matters such as demand, supply of certain materials, competition, interest in the specific product or service as well as consumer values to see if your business idea is fit for the New Zealand market.
Even though the New Zealand economy is considered well sought after for its ease in doing business, this statistic doesn’t guarantee all businesses success.
Therefore, it’s important you enter into the market prepared for any challenges and obstacles you may need to overcome.
Can A Tourist Open A Business In New Zealand?
There are different types of ways people can enter into New Zealand. Commonly, people arrive in New Zealand as tourists, students and employees. It all depends on the kind of visa you hold. The visa you have will determine your reason for being in New Zealand and what kind of activities you can undertake while staying in New Zealand.
Typically, a tourist visa does not allow its holders to work or start a business of any kind in New Zealand (remember, violating the terms of your visa is a legal offence).
Therefore, it’s crucial you enter New Zealand on the right kind of visa if you intend on undertaking business activities while you are here. Visit the New Zealand Immigration website for more information.
Can I Run A Company As A Non-Citizen In New Zealand?
You don’t have to be a New Zealand citizen to run a company in New Zealand. In fact, non-residents of New Zealand can still run a company in New Zealand. However, they will need some help from people they trust that do reside in New Zealand.
Every company that operates in New Zealand must have a director that lives or resides in New Zealand or Australia. This is a requirement under the Companies Act 1993, which regulates all companies in New Zealand.
A private company will need at least one resident director, whereas a public company needs to have a minimum of 3 directors, two of which must reside in New Zealand.
What Are A Company Director’s Duties?
Directors play an important role in the higher levels of a company and are integral to a company’s success. Therefore, it’s important to select a director that not only fulfils the residential requirements, but also takes their director duties seriously.
Director duties are the rules of conduct every director must follow under the Companies Act 1993. A breach of director’s duties is considered a violation of the law and, depending on the severity of the breach, can lead to legal consequences such as imprisonment.
Director duties include:
- Acting in good faith
- Never abusing their powers
- Acting with care and diligence
- Always using the information they can access appropriately
How To Start A Business In New Zealand
Before you get caught up in the more complicated matters, you will need to check off your business registration as one of the first steps to starting a business in New Zealand.
In New Zealand, all businesses are required to have a New Zealand Business Number (NZBN) which can be attained when registering your business.
Business registration can be done online through the New Zealand Business Number website.
Make sure you have all your details together before getting started so you can get through the application efficiently. You can also register your business name and apply for any relevant taxes here as well.
For more information on what taxes might apply to you as a non-resident New Zealand business, visit the Inland Revenue Department (IRD).
If you are registering a business, then you are all good to go once your application has been approved and you have received your NZBN.
However, when setting up a company there are some additional steps required. In order to operate a company in New Zealand, you will also need to get registered with the Companies Office.
Like an NZBN, this process can be done online with the Companies Office. Naturally, a company structure is very different to other types of businesses. Therefore, be prepared to provide a lot more detail when doing your registration.
Once you have completed your registration, keep these identifying numbers close by – they are useful and often required when dealing with government agencies or conducting other official tasks.
What Licence Do I Need To Start A Business As A Tourist?
Aside from visa requirements, there are no specific business licences that apply solely to business owners that are from outside of New Zealand.
Therefore, your business licence requirements will essentially be the same as New Zealand business owners. This means that your industry and business operations will determine whether you need a business licence or not as well as what type of licence you will require.
You can look up what kind of business licence you might need by using the New Zealand Business website. The site allows you to either look up a businesses licence by name and get details about that specific type of business licence.
Alternatively, it also allows you to fill out some information regarding your business in order to generate a list of what licences you may need as well as information on attaining them.
What Legal Documents Do I Need?
Any business owner, whether they are a resident or non-resident of New Zealand, will need to have the right legal documents in place so their business can be protected and operate in a legally compliant manner.
When you’re an overseas business owner, multiple jurisdictions might be a factor for you. In this case, you might want to make sure contracts are internationally enforceable. An internationally enforceable contract takes into consideration the need for the contract to be applicable in more than one region, meaning it will be catered and written to make sure it can hold wherever you need it to.
Before you get into having those contracts drafted to apply internationally, you might want to take a look at the different types of contracts and other legal documents you will need to operate a business in New Zealand.
Should I Have Contractor Agreements?
In order to run your business, you might consider hiring staff to help out. Depending on the kind of employees you choose to have it’s important to have a formal agreement with them in place, signed by both parties.
Many business owners choose to hire contractors which are external employees that generally serve for the completion of a specific task or project for a certain period of time. They aren’t an internal employee of the business and therefore, their rights as well as responsibilities should be listed accordingly.
It’s important to note that an employee’s rights are different from a contractor’s rights. For example, the Employment Relations Act 2000 applies to employees, but not to contractors.
This becomes a tricky area in the context of sham contracting, where employers try to make employees look like contractors so that they can get away with not paying them minimum wage or providing other employee entitlements.
So, it’s essential to understand the difference between employees and contractors when fulfilling your employer obligations.
It’s also important to have a Contractors Agreement that clearly states their employment type.
On the other hand, if you’re hiring employees, you will need to have an Employment Agreement in place that contains all their rights, in accordance with New Zealand employment standards.
Do I Need A Privacy Policy?
When deciding to take the steps to put your business online through its own website, it’s crucial to have the right legal documents in place there, too.
A Privacy Policy is legally required from all businesses that collect any kind of personal information from their customers. Personal information includes anything that can be used to identify an individual, such as names, addresses, emails or bank account details.
The Privacy Act 1993 and the New Zealand Information Privacy Principles (IPP) require business’ websites to have a Privacy Policy in place that lets customers know their data is being collected, for what purposes and how it’s being used as well as stored. Additionally, if your business is conducting activities in the EU, the GDPR applies as well.
In this case, you’ll need to have a GDPR Privacy Policy.
At Sprintlaw, our privacy lawyers can draft a Privacy Policy that is tailored to your business’ specific needs. Contact us today for a no-obligations chat!
Non-Disclosure Agreements
Privacy isn’t just for website policies – it’s also important in everyday business practices to keep your business secure.
A Non-Disclosure Agreement (NDA) is a confidentiality agreement between parties that lets them know what information needs to stay between them. For example, if you’re letting an investor look through important documents such as your business plan, then it’s good to have them sign a Business Plan Non-Disclosure Agreement so they cannot reveal those ideas to others.
Like we mentioned above, New Zealand has a healthy business environment, but also a competitive one! As such, it’s worth investing in strong Confidentiality Agreements to protect your business’ trade secrets and retain your competitive edge.
What Laws Apply To Me As A Non-Resident Business Owner?
As a non-resident business owner, you will still be subject to New Zealand rules and regulations. Therefore, it’s important to become familiar with them so your business doesn’t get penalised for any wrongdoings.
You need to be aware of the Consumer Guarantees Act 1993 and the Fair Trading Act 1986 as they determine how your business practices are allowed to impact your customers and the general public.
The laws cover matters such as:
- Misleading and deceptive conduct
- False advertising
- Unfair contract terms
- Consumer rights
- Product safety
- Consumer guarantees
Key Takeaways
It is possible for people that aren’t New Zealand residents to operate a business in New Zealand, however, they can’t do this on a tourist visa. At Sprintlaw, while we cannot help you with your visa requirements, we can aid in setting up your business in New Zealand.
To summarise what we’ve discussed:
- The New Zealand business environment is stable and generally good for starting a business
- Non-residents can operate a business in New Zealand, however, if you intend to come to New Zealand for this purpose you will need the right visa
- If you plan on setting up a company, you will need to have a director that resides in New Zealand
- Make sure you hire someone trustworthy that will follow through on their directors duties
- Look up any licences you will need for your business
- Have all your legal documents drafted</
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