13/02/2023 · Last update: 04/08/2025

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Your Complete Guide to Start a Business in New Zealand

When it comes to starting a business, NZ’s aspiring entrepreneurs can feel like it’s both a daunting and exciting prospect. This article will guide you on the costs associated with setting up shop in New Zealand, as well as where to find help and resources so that you can get your venture off the ground successfully!

New Zealand is a great place to start a business, and test it before you take it to the rest of the world. Not everyone has those aspirations, but NZ is an easy place to get started and a reflection of how consumers buy in the western world. There are plenty of resources out there to get you on your feet, but more importantly, Kiwi’s love to support someone giving it their best. The Kiwi spirit often transpires into some of the greatest entrepreneurial stories one could hope for!

Guide to starting your business in New Zealand:

1. The cost of living in New Zealand (Not Auckland) is relatively low compared to other developed countries. This means that your start-up costs will be lower as well!
2. There are plenty of resources available to help you get started, including the NZTE (New Zealand Trade and Enterprise) website and the Ministry of Business, Innovation and Employment website.
3. It is important to raise your financial literacy and know the tax obligations you have. It might seem like a foreign language to begin with, but take this seriously, because no-one (Including accountants) care about your money as much as you do. Read books, starting with Rich Dad, Poor Dad.
4. New Zealand has a favourable tax environment for businesses, with some of the lowest corporate tax rates in the world. For more information on this, go to the Inland Revenue website.
5. There are plenty of networking and support groups available for businesses in New Zealand. These can be a great way to meet other like-minded entrepreneurs and get advice and support.
6. There’s no minimum capital required to start a company in New Zealand. In the Netherlands, you must have 45,000 Euros, just to open a business.

That said, opening a business isn’t for the fainthearted. It’s tough, so don’t do it unless you’re 100% committed.

Steps for Setting Up Your Business in New Zealand

Check the viability and profitability of your business idea

So you’ve got what feels like the next million-dollar business idea. Maybe it’s a trendy café in Wellington’s CBD, or perhaps a tech startup that’ll revolutionize how Kiwis manage their finances. Before you dive headfirst into registering your company, here’s the reality check: not every brilliant idea translates into a successful business.

Testing your idea doesn’t mean spending thousands on market research. Here’s how to validate your concept on a shoestring budget:

• Start with conversations. Talk to 20-30 potential customers about their problems. If you’re considering a meal delivery service for busy Wellington professionals, chat with office workers during their lunch breaks about their current habits and pain points.
• Test with a minimum viable product (MVP). Before launching that full meal delivery service, try delivering homemade lunches to 10 regular customers for a week. See if they actually order consistently and provide feedback.

Study your competitors

Your competitors aren’t just businesses to beat, they’re your best teachers. For example, if you’re planning to open a fitness studio in Hamilton, spend time observing how existing gyms and studios operate. Count foot traffic during peak hours, check class schedules, and notice what equipment they prioritize. Investigating these will show you how you can do better than the existing local business.

Here’s what smart entrepreneurs investigate about their competition:

• Product offerings: What are they selling that customers love?
• Pricing strategies: Are they premium, budget, or somewhere in between?
• Marketing tactics: Where and how are they reaching customers?
• Gaps in service: What are customers complaining about in online reviews?

 

Cost to Start a Business in New Zealand

Starting a business in New Zealand can be a relatively easy and low-cost process, especially when compared to other countries. The government has put in place a number of initiatives to encourage entrepreneurship and there are plenty of resources available to help you get started.

The cost of setting up a business in New Zealand will depend on a number of factors, including the type of business you want to set up, the size and location of your business, and whether you need to register for GST.

Generally speaking, you can expect to pay around $1,000 to set up a small business in New Zealand, including registering a company name ($10+GST), incorporation ($118.74). You can do this through the New Zealand Companies Registrar. Just make sure your business name doesn’t infringe on anyone else’s trademark or existing business name.

Understanding GST Registration: When It Helps (And When It Hurts)

Once you’re earning $60,000 annually, GST registration becomes mandatory. But here’s the insider tip: you can register voluntarily from day one, and for some businesses, this makes perfect financial sense.

When early GST registration pays off:

• High setup costs: Starting a food truck? You’ll spend big on the truck, cooking equipment, and packaging before your first sale
• Equipment-heavy businesses: Photography studios, construction companies, or manufacturing operations
• B2B services: Your business customers can claim GST back anyway

Take that food truck example. If your setup costs hit $57,500 (including GST), you can claim back $7,500 in GST returns. That’s real money back in your pocket when you need it most.

When to skip early registration:

• Service-based businesses: Babysitting, tutoring, graphic design with minimal expenses
• Unlikely to hit $60,000: Your pricing becomes less competitive when you add 15% GST

Getting a New Zealand Business Number (NZBN)

Other Expenses to Consider if You Want to Start a Business

One of the biggest costs associated with starting a business is finding the right premises, but in this day and age, who needs an office? If you are, in fact, planning on renting or leasing commercial space, you should factor in the cost of rent, utilities, insurance, signage and any fit-out or renovation costs. Don’t rush into these costs when starting. Protect your cash-flow at all costs as fixed overheads are what commonly drowns businesses. What you can do however, is ask suppliers to contribute to signage costs, or fit out if you have enough clout with them.

Another significant cost associated with starting a business is marketing and advertising. You’ll need to budget for things like your online presence, such as buying a domain name, paying for website design ($5,000-$10,000), online advertising ($1000 per month), an Agency to run your advertising ($2000 per month), print advertising, and signage.

Of course, there are also general business costs that need to be considered when starting any new venture. These include things like office supplies, accounting software ($70 per month), insurance, and licenses or permits required by your local council.

Following Business Regulations: Licenses, Permits, and Insurance

Don’t let paperwork kill your business dreams before you even start. New Zealand has specific licensing requirements that vary dramatically depending on what you’re doing.

Essential licenses you might need:

• Food businesses: Food safety certificate (think cafés, food trucks, catering)
• Alcohol sales: Liquor license for bars, restaurants, or bottle shops. You’ll also need to attend one of the Responsible Service of Alcohol (RSA) workshops across New Zealand.
• Construction: The exact requirements vary depending on where your business operates, but in general you’ll need a building license, heave machinery license, high risk work license, etc.

Insurance isn’t optional either. Liability insurance protects your business when things go wrong. A customer slips in your store? Your graphic design work causes a client’s marketing campaign to fail? Without proper coverage, you’re personally on the hook, unless you registered as a limited liability company. Consult an insurance broker to find the best business insurance for you.

Where to Find Help with Starting a Business in NZ

Get your accountant involved early. The best accountants are those who push the boundaries, but never cross them. Evaluate your accountant on their risk-factor. If they run a larger firm, you’ll find safety in compliance.

Your accountant can help you choose between different business structures available. It is important to choose one that will work best for you. A company has completely different obligations, rules and loopholes in comparison to a partnership, or sole trader. Choose wisely.

Once you have chosen a business structure, you need to register your business with the Companies Office. This can be done online or through a paper application. You will need to provide some basic information about your business, such as its name, address, and contact details. You will also need to choose a registered office address and appoint a director for your company.

After your company has been registered, you need to apply for a Business Licence from the New Zealand Government. This licence allows you to operate your business and ensures that you comply with all the relevant laws and regulations. Once you have been granted a Business Licence, you can start operating your business.

If this all seems too hard to D.I.Y, then leave it to your accountant.

Start-up companies often use consultants or mentors to help them. Banks may also offer specialised support for new businesses, so it is worth talking to your bank about what services they can offer you.

Types of Business Structures Available in New Zealand

There are four main types of business structures available in New Zealand: sole traders, partnerships, companies, and trusts. Each has its own advantages and disadvantages, so it’s important to choose the right one for your business.

If you’re not sure which is the right business structure, don’t worry. You can always start out as a sole trader and then change your business structure later on once you’re ready to scale.

Sole Traders

Sole traders are the simplest and most common type of business structure in New Zealand. They’re easy to set up and you have complete control over your business. However, you’re also personally liable for all debts and losses incurred by your business.

Sole traders can begin their business without the need to register anything more than an IRD number.

However, If you’re employing staff, you’ll need to register as an employer. You may also need to register for GST.

Partnerships

Partnerships are similar to sole traders, but involve two or more people. You’ll need to have a partnership agreement in place that sets out each partner’s rights and responsibilities. Like sole traders, partners are personally liable for all debts and losses incurred by the business.

Partners declare profits earned via their personal income tax linked to their individual IRDs.

The partnership needs to file a Partnership income tax return (IR7) to allocate the profits or losses to each person.

As with sole traders, they may also need to register as employers and for GST.⁵

Companies

Companies are separate legal entities from their owners (shareholders). This means that shareholders aren’t personally liable for the company’s debts and losses – only the company itself is responsible. Companies can be either registered or unregistered. Unregistered companies are less common and have fewer protections under the law.

This entity type requires the most amount of work. To incorporate your company, you need to

• Reserve a business name
• Get an Internal revenue department (IRD) number
• Register the following:
• Company address
• As an employer
• For GST
• The appointment of a director
• Company shareholders
• File director and shareholder consent forms
• Issue company shares
• Incorporate a constitution (not mandatory)

Trusts

Trusts are a more complex structure that can be used for a variety of purposes, including asset protection and tax minimisation. Trusts can be either express trusts or implied trusts. Express trusts are created by a written trust deed, while implied trusts arise from the actions of the parties involved (for example, when one person transfers property to another with the intention of creating a trust).

The Benefits of Running a Business in New Zealand

New Zealand is a great place to start a business. The cost of living is relatively low, and there are plenty of resources available to help you get started. There are also a number of tax benefits and incentives available to businesses in New Zealand. Here are some of the main benefits of starting a business in New Zealand:

Tax benefits and incentives

There are a number of tax benefits and incentives available to businesses in New Zealand. This includes the research & development tax credit, which can refund up to 33% of eligible R&D expenditure back to businesses. There are also a number of grants and subsidies available for businesses undertaking certain activities or operating in certain sectors.

Stable political environment

New Zealand has a stable political environment, which provides certainty for businesses planning for the long term. The country has strong institutions and a well-developed legal system, which provides an ideal platform for doing business.

Access to markets

New Zealand offers access to markets across Asia.

Taxation and Compliance Considerations

Many people are surprised to learn that there is no capital gains tax in New Zealand. This means that any profits you make from selling your business will be completely tax-free. However, there are still a number of other taxes that you need to be aware of when running your business in New Zealand.

Income tax is the main tax that you will need to pay as a business owner. The good news is that the corporate tax rate in New Zealand is only 30%, which is relatively low compared to other countries. You will also need to pay GST (Goods and Services Tax) on any products or services that you sell. The current GST rate is 15%.

If you are planning on hiring staff, then you will also need to pay PAYE (Pay As You Earn), which is a deduction from your employees’ wages for income tax. The current PAYE rate starts at 12.17%.

There are a number of compliance requirements that businesses need to meet in New Zealand, such as keeping accurate financial records, filing annual returns, and paying taxes on time. Failure to comply with these requirements can result in hefty fines or even imprisonment. This is where your trusty accountant comes in! Both a good accountant and lawyer are worth their weight in gold!

Government Support for Startups and Small Businesses

If you’re thinking of starting a business in New Zealand, you’ll be glad to know that the government is very supportive of small businesses and startups. There are a number of programs and initiatives in place to help new businesses get started and grow.

One of the most important things for any startup is access to funding. The government has a number of schemes in place to help startups access business finance, including loans, grants, and equity investment.

Development grants

If you’re lucky enough to be in an industry which attracts development grants from the NZ Government, you may be able to minimise your reliance on the aforementioned business funding options.

Through partner institutions like Callaghan Innovation, you may be fortunate enough to receive a form of funding or assistance.

Even if you don’t qualify for grants, you may be able to receive mentorship and training.

Check with the NZ Government, to see what’s out there for new small businesses and established businesses.

Angel investment

Angel investment funds come from high net-worth or wealthy individuals who typically invest in start-up and early-stage businesses, usually in exchange for a share of the business.

Angel investors are often experienced entrepreneurs and can bring knowledge and contacts as well as capital. This sort of investment usually requires giving up a share of the business in return for capital. Angel investors are often part of a network, for example, the Angel Association New Zealand or Ice Angels.

The government also offers a range of tax incentives for businesses, including research and development tax credits, accelerated depreciation, and capital gains tax exemptions. These can save your business a significant amount of money and make it more competitive. Many accountants are also licensed tax advisors so when hiring consider killing two birds with one stone!

There are also a number of free or low-cost business support services available from the government, including advice on starting your business, mentoring, and networking opportunities. These can be extremely valuable when you’re first getting started.

So if you’re considering starting a business in New Zealand, be sure to take advantage of all the support that’s available from the government. With the right help and advice, you can give your startup the best chance of success.

Financing Options Available to Start a New Business

Let’s be honest, great ideas don’t pay the bills. You need actual cash to make your business into reality. Starting a business NZ wide can be costly depending on your business operations and products and services. Good thing New Zealand offers more funding options than most entrepreneurs realize.

Development Grants through Government Agencies and Non Profits

A business may apply for the government’s Small Business Finance Scheme, which offers loans of up to $100,000 for new businesses. But this is no easy feat to get awarded, and often the red-tape associated with jumping through a series of hoops outweighs the benefit.

Development grants through organizations like Callaghan Innovation can provide:

• Direct funding: Cash injections for qualifying industries and projects depending on your business type
• Mentorship programs: Access to experienced business advisors
• Training opportunities across New Zealand on topics like getting started in business, marketing, health and safety topics, etc.
• Networking events: Find a business community that you can learn from and support your goals

A great resource to keep ontop of all things New Zealand business is the New Zealand Companies Office and business.govt.nz. Both websites are a good starting point in running a business, and they also have free seminars and workshops across New Zealand on a variety of business topics.

Even if you don’t qualify for grants, don’t skip this step. The mentorship and training alone can save you from costly mistakes in managing your business.

The perks don’t stop at grants. New Zealand offers tax incentives that can significantly boost your bottom line:

• R&D tax credits: Perfect for tech startups or if you have an innovative organisation in a critical business industry
• Accelerated depreciation: Write off equipment costs faster
• Capital gains exemptions: Keep more of your profits when you sell

There are also a number of private lenders, like Quickloans who offer business loans and banks offering lines of credit specifically for small businesses. Additionally, many banks offer business banking products with competitive rates and terms.

Hidden Costs in Starting a Business

When you’re starting a business, it’s important to be aware of all the costs involved. Many people focus on the initial investment and don’t consider the ongoing costs. This can lead to financial problems down the road.

1. Some of the hidden costs in starting a business include:
2. Licenses and permits: You may need to get several licenses and permits before you can start operating. The cost of these can add up quickly.
3. Insurance: You’ll need to get insurance for your business. This can be expensive, especially if you’re in a high-risk industry.
4. Office space: If you’re not working from home, you’ll need to rent or buy office space. This is another ongoing cost that can add up quickly.
5. Provisional Tax: Ask your accountant how provisional tax works. Don’t get caught out not being able to pay your tax bill in your second year of business.
6. Equipment: You’ll need to buy or lease equipment for your business. This can be costly, especially if you need specialized equipment.
7. Inventory: If you sell products, you’ll need to stock inventory. This can be expensive, especially if you have a lot of products or unique items.
8. Advertising and marketing: You’ll need to spend money on advertising and marketing to promote your business. Digital marketing is not magic, so assume a minimum of a 6-month calibration period until they find the winning formula.

Conclusion

Starting a business in New Zealand can be a daunting task, but with the right knowledge and help it can also be very rewarding. With an understanding of what it costs to start up, where to find the necessary help, and other helpful tips, you’ll have all the information you need to get started. If you still feel overwhelmed by this process, there are many resources available that can provide additional support and guidance. We hope this guide has helped give you confidence in taking the first step towards starting your own business in New Zealand and if you’re looking for a finance partner, please reach out to QuickLoans for further details.