Guide on starting a business in New Zealand

Launching a business gives you the chance to be your own boss, work flexible hours, pursue your passions, and achieve financial independence.

And it’s easier than you think. New Zealand consistently ranks among the World Bank’s “easiest places to do business”¹ due to its streamlined online processes. As the World Economic Forum notes, the entire setup can take less than half a day.²

To make things even easier, we’ve compiled a guide on how to start a business in New Zealand. From a requirement checklist to costs, challenges, and best practices, we cover everything an entrepreneur needs to know.

Table of contents
Checklist on Starting a business in NZ Cost to start a business in NZ Common challenges involved Best practices Wise: A global payment solution for your business FAQs

Checklist on Starting a business in New Zealand

Keen to kick off your next Kiwi venture? Here’s a checklist for starting a business in New Zealand.

Market research

Market research evaluates your customers and competitors to assess financial viability. First, analyse target audience demographics like location, gender, age, income, spending habits, motivations, and pain points.

Next, assess competitors to gauge market saturation. Do online sleuthing–Google Maps and Search–to see who you’re up against, and compare their strengths and weaknesses.

The larger the investment, the more you should allocate to market research. Big businesses hire third-party firms to conduct in-depth assessments. To DIY it, gather free data from annual company reports, trade publications, and Statistics New Zealand.

Leading Kiwi industries include agriculture, tourism, and renewable energy. You can still succeed in other sectors if your product stands out.

A business plan

Every entrepreneur needs a business plan. The document paves a roadmap to success by clarifying your objectives, operations, strategies, milestones, and finances.

Unless you’re aiming for investors, it doesn’t need to be long. Many smaller businesses shoot for a succinct one-pager. Possible topics include a company overview, product definition, value proposition, business objectives, SWOT analysis, management, and financials.

Need a hand? See our business plan template or learn how to write a business plan.

👆Click here to read more about how to write a business plan

A business structure

New Zealand has three main business structures, each with distinct legal and financial obligations.

• Sole trader: The owner is personally responsible for income and losses.
• Partnership: Two or more owners share personal responsibility for income and losses
• Company: Separate legal entity with one or more owners, who aren’t usually liable for losses.³

The Choose a Business Structure tool can help determine which works best for you.

Registering a business in New Zealand

Once you’ve chosen a structure, you can start registering your New Zealand business.

• Sole traders need only let the Inland Revenue Department (IRD) know of their intention to trade.⁴ Get a personal IRD number if you don’t already have one.
• Partnerships require a separate IRD number, and each partner pays tax on their own income via their own IRD number.⁵ It’s wise to draft a partnership agreement to document key conditions.
• Registering a company requires more paperwork. You’ll have to pay a $118.74⁶ (plus GST) application fee and gather various documents. For the details, learn how to register a company in New Zealand.

You may also wish to reserve a business name. The ONECheck tool determines whether a business name, web domain, and trademarks are already in use. If not, register them with the tool. Note that a registered business name doesn’t have to match your trading name.

While not obligatory, the New Zealand Business Number (NZBN) publishes key business information publicly to facilitate faster communication and build trust. Some businesses refuse to trade with those without an NZBN.

Companies automatically receive an NZBN during the registration process.⁷ Sole traders and partnerships must apply separately.

Insurance

There’s no single, all-encompassing insurance policy covering all potential risks. Many businesses take out multiple policies to cover different things.

An insurance broker can help you identify risks and find suitable policies. Common policy types and what they cover include:

• Assets: Theft and damage of business-related items
• Commercial property: Property damage caused by natural disasters, fire, or burglary
• Business interruption: Losses caused by business interruptions
• Liability: Legal costs from being sued
• Commercial vehicle: Vehicle damage caused by traffic accidents, fire, and natural disasters
• Key person: Losses resulting from losing a critical employee
• Cyber: Losses from data breaches, hacking, phishing, and IT scams
• Contract work: Accidental damage while renovating your business premises.

Legal compliance

Hiring staff? You must comply with New Zealand Employment legislation. Key considerations include holidays, wage protection, parental leave, minimum wage, equal pay, and migrant protection.⁸ You can register as an employer through the IRD.⁹

New Zealand has strong intellectual property (IP) laws. Copyright applies automatically when producing content. Modest fees apply to registering a trademark or patent¹⁰, but it’s a small price to pay to safeguard your IP.

When collecting or using personal information, you must comply with the Privacy Act 2020. The data owners must know you’re collecting their data, why, how you will use it, and how it will be stored.¹¹

Licenses, certificates, and qualifications

You and your staff must possess the necessary certifications, qualifications, and licenses to fulfil your duties. From architects to engineers and accountants, qualifications are a non-negotiable for several specialised white-collar professionals. Many educators also need degrees, as do healthcare professionals.

Licenses are a must for electricians, plumbers, and gasfitters. Other trades may have their own specific occupational licensing requirements. Working on-site often requires a General Construction Induction (GCI), also known as a “white card.” Hazardous activities, such as operating cranes or working at heights, require advanced certifications.

Hospitality businesses must comply with the Food Act 2014. Follow the Sale and Supply of Alcohol Act 2012 if you plan to sell booze.¹²

A business communicating through email or SMS should take care not to breach the Unsolicited Electronic Messages Act 2007.¹³

Tax registration

All businesses must register with the IRD and pay tax on profits. Sole traders can use an existing personal IRD number, while partnerships need a new one. Companies register an IRD number during the incorporation process.¹⁴

New Zealand businesses typically file their first tax return as a lump sum at the end of the first financial year. Subsequent tax returns are often paid in instalments called provisional tax. Provisional tax is compulsory if you paid more than $5,000¹⁵ in tax on the previous return.

If you expect your business to turn over more than $60,000¹⁶ in the next 12 months, you must register for GST. Learn more about business tax rates in New Zealand.

A business bank account

Opening a business account streamlines bookkeeping by separating business and personal expenses. The best business accounts also integrate accounting software to minimise tiresome manual tasks, such as payment reconciliations and cross-checks.

Banks offer a range of products to business customers, including business loans, corporate credit cards, insurance, payment solutions, and industry advice. If you’ll make frequent international transfers, you could benefit from an alternative service like Wise Business.

Sign up for the Wise Business account! 🚀

Infrastructure

If you’re starting an online business, invest in a webpage, social media accounts, a payment gateway, an inventory management system, and other digital assets. Starting a business from home may require renovating rooms, setting up a home office, or upgrading your internet. A brick-and-mortar retail store, of course, requires a larger investment to lease and retrofit a shopfront.

In addition to low-cost transfers, Wise Business is a single-platform solution for bulk payments, handling invoices, issuing cards, and tracking expenses.

How much does it cost to start a business in New Zealand?

Registration is cheap. The sole trader and partnership structures are free, while registering a company costs $118.74⁶ (plus GST). The fee for reserving a business name is just $10 + GST.¹⁷

But expenses stack up. Common one-time costs include real estate, permits, equipment, vehicles, retrofitting, furniture, branding, and web development. Ongoing expenses include insurance, utilities, wages, rent, stock, ingredients, and materials.

Once you’ve added up your projected expenses, slap on another 20-30% to cover unforeseen costs and price hikes. Expect to spend the first six months’ running costs to get your business off the ground.

Entrepreneurs can source capital from personal savings, business loans, or investors. If attempting the latter two, a detailed business plan is essential. Most lenders like to see real-world experience before approving a loan.

Government grants can help new businesses grow. Streams include support for Maori business owners and tech start-ups, as well as subsidised mentoring for all business types.¹⁸

Common challenges involved with starting a business in New Zealand

While New Zealand is a relatively easy place to do business, trading here is not without challenges.

• Market saturation: Expect stiff competition in many sectors.
• Securing funding: Investors may hesitate to fund entrepreneurs without a proven track record.
• Tax obligations: GST and withholding taxes can create accounting headaches.
• Reluctant spending: High living costs prompt Kiwis to skip non-essential purchases.
• Compliance: There are many legal obligations in this well-regulated nation.
• Talent acquisition: Many bright local minds flee New Zealand for more lucrative opportunities abroad.
• Limited reach: New Zealand has a relatively small population.
• Foreign transactions: Banks have high FOREX and transaction fees when paying suppliers, contractors, or even staff members overseas in their local currencies.

Best practices to scale your business

Starting a business in New Zealand is easy enough. Growing it is an entirely different matter.

Get professional advice

As a first-time business owner, you can’t hope to understand the complexities of employment law, taxation, and compliance. A pro consultant can show you the ropes to make life easier and mitigate the risks.

Hold cash flow reserves

Cash flow woes can see a finely-tuned business come unstuck. Gather a sizable reserve to save you from sticky situations while your business takes off.

Track performance

Adaptation is essential for growth. Use accounting software to keep close tabs on your finances and determine where you can improve profits and slash expenses.

Monitor the market

Keep a keen eye on what’s happening in your industry to stay abreast of the latest trends. Understanding consumer shifts and competitor behaviour can help you optimise your product and stay one step ahead.

Wise: A global payment solution for your business

Need to pay suppliers or staff situated overseas? Wise Business could save you a tidy sum. With low transparent pricing and coversions at the mid-market exchange rate, you’ll spend less on international transfers than what it generally costs.

Wise Business helps streamline overseas business payments without foreign transaction fees, saving up to 3x compared to other providers.

A Wise Business account allows users to can send, receive, and hold in multiple currencies. Experience hassle-free global transactions by transacting like a local business. Here's what you get with a Wise Business account:

• Free to register — Hold and convert between 40+ currencies. Send to 140+ countries
• Debit cards for you and your team, which you can use in 150+ countries
• Multi-user access for team members, with ways to control and manage permissions
• Pay up to 1,000 recipients at once with the Wise batch payments feature
• Integrate with your favourite cloud accounting solutions like Xero, QuickBooks, and more
• Get account details to receive in 8+ currencies for a one-time fee of 40 NZD

Sign up for the Wise Business account! 🚀

This general advice does not take into account your objectives, financial circumstances or needs and you should consider if it is appropriate for you.

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FAQs

1. How do I set up a business in NZ with no money?
Your best bet is to look for business ideas that don’t require much capital, such as pet sitting, cleaning, personal training, drop-shopping, and online freelancing.

2. How much does it cost to register a business in NZ?
You can register a company for just $118.74⁶ (plus GST). Registering a partnership or sole trader doesn’t attract any fees.

3. How old do you have to be to start a business in NZ?
Partners in partnerships don’t have age requirements. Company directors must be 18 or over.

4. How do I open a business in NZ online?
After registering your new online business, build a web presence by investing in social media marketing and an SEO-optimised webpage.

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Sources:

1. Business NZ: New Zealand Good for Business
2. World Economic Forum: Fastest Countries for Starting a Business
3. Business NZ: Choose A Business Structure Tool
4. Business NZ: Becoming A Sole Trader
5. Business NZ: Starting A Partnership
6. Companies Register: Registering A Company
7. Companies Register: New Zealand Business Number
8. Employment: Employment Legislation
9. IRD: Register as an Employer
10. NZ IP: Protect Your Business Ideas
11. NZ Data: Data Privacy
12. Institute of Canterbury: Legislation
13. Legislation: Unsolicited Messages Act 2007
14. Companies Register: Tax Registration
15. IRD: Provisional Tax
16. IRD: Registering for GST
17. Companies Register: Reserving a Business Name
18. Business NZ: Grants and Help for New Businesses