Investing in Aotearoa New Zealand FEBRUARY 2021
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Investing in Aotearoa New Zealand FEBRUARY 2021 Simpson© Simpson Grierson Grierson 2021 Contents Introduction 01. 02. 03. About Simpson Grierson Introduction to Aotearoa Overseas investment Mergers & New Zealand regulation Acquisitions 04. 05. 06. 07. Competition/ International trade Financial Services Structuring a business Anti-trust Regulation 08. 09. 10. 11. Buying, selling and Use and development Fund Raising and Contract law and leasing property of property Capital Markets Consumer protection 12. 13. 14. 15. Data privacy Workplace relations Intellectual Property Tax 16. 17. 18. Insolvency Economic response Doing business with to climate change Māori organisations This guide introduces you to New Zealand’s business and trading environment, with particular focus on legal and regulatory matters intended to assist with initial enquiries about investing in New Zealand. It is updated regularly. The information in this guide is necessarily general, and should not be relied upon as a basis for making business decisions. Your business needs and specific circumstances must be considered, and government policy, market conditions and relevant laws may have changed since the guide was last updated. STUART EVANS MICHAEL POLLARD BARNEY CUMBERLAND Banking & Finance Corporate & Commercial Tax DDI +64 9 977 5321 DDI +64 9 977 5432 DDI +64 9 977 5155 M +64 21 633 422 M +64 21 400 852 M +64 21 497 462 [email protected] [email protected] [email protected] Simpson Grierson is one of the New Zealand’s “Simpson Grierson has one of the largest corporate leading full service commercial law firms. practices in New Zealand and is active in major About We have three offices, in Auckland, Wellington transactions involving private equity, public and and Christchurch. private M&A, capital markets, business restructuring Simpson Grierson and commercial infrastructure projects. It has niche We have extensive experience in helping offshore expertise in key industry sectors such as dairy, mining, investors with New Zealand investment projects. We help forestry, infrastructure, aged care and insurance, and ‘end to end’ – from evaluating an investment opportunity, advises both SMEs and larger corporates.” assisting in the acquisition process and with integration Legal 500, 2020 issues, through to navigating operational issues that arise day to day. Ultimately, we will help you to maximise the “Simpson Grierson houses a substantial offering of value of your investment. IPO, M&A, private equity and corporate restructuring We have acted on some of the largest offshore knowledge, with experience in high-profile transactions investments made in New Zealand recently (read more across a wide range of industries. Often instructed by here). We deal regularly with the Overseas Investment prominent funds, private equity firms and international Office and other regulatory bodies potentially involved corporates on inbound investment into New Zealand.” in investment transactions in New Zealand. We have Chambers and Partners, 2020 excellent long-standing relationships with New Zealand’s leading corporate finance and accountancy firms, “The service and support we received was first-class,” investment banks and environmental advisors. reports one client, going on to describe the Simpson We have speciality expertise in New Zealand’s planning Grierson team members as “exceptional in terms of and resource management consenting process, employee their availability, flexibility and commerciality.” relations laws and intellectual property matters. Chambers and Partners, 2020 We also have excellent international connections. We are New Zealand’s only member of Lex Mundi, the world’s “Another client describes the lawyers as “agile, receptive leading association of independent law firms and we and responsive,” adding: “They offer an innovative are a co-f ounder of the Pacific Rim Advisory Council. approach to problems.”“ Our partners include members of the International Bar Chambers and Partners, 2020 Association and the Inter-Pacific Bar Association. Please get in touch. We would be delighted to talk to you. Simpson Grierson HOME Investing in New Zealand 1 GEOGRAPHY Aotearoa New Zealand (New Zealand) is a Pacific Auckland SECTION 1 archipelago, made up of two main islands (the North and South Islands), Stewart Island (at the bottom of the South Introduction Island), and many smaller islands. The main centres are Auckland, Hamilton, Tauranga and Tauranga to Aotearoa Wellington in the North Island, and Christchurch and Hamilton Dunedin in the South Island. Most of New Zealand’s New Zealand residents live in these main centres. Outside the main centres, the country is sparsely populated. New Zealand has a temperate climate. The warmest summer months are typically January to March. New Zealand’s time zone is GMT +12 hours. POPULATION AND CULTURE New Zealand has a population of around 5 million, and Queenstown is a culturally diverse nation. Traditionally, New Zealand Wellington culture has reflected a blend of New Zealand-European (descended from predominantly British settlers arriving from the 1800s onwards) and Māori – New Zealand’s Christchurch indigenous people. New Zealand is also home to large Pasifika, Chinese, Indian, English, South African and Dunedin Korean communities. Nearly one third of the population was born overseas. The official languages are English, Te Reo Māori (the Māori language) and New Zealand Sign Language. English is the principal spoken language. Te Reo Māori is spoken regularly in some local communities and has recently experienced a resurgence. New Zealand has a culture of innovation and New Zealanders are famous for having a ‘can-do’ attitude. 90% of the population are active internet users. New Zealanders generally enjoy a high standard of living. Simpson Grierson HOME Investing in New Zealand 2 BUSINESS LANDSCAPE (CPTPP) with, among others, Brunei, Canada, Japan, Local government consists of democratically elected Malaysia, Mexico and Singapore. regional councils and territorial authorities, who are New Zealand is regarded as having one of the lowest levels primarily responsible for planning and environmental of corruption in the world. The country was ranked 1st New Zealand is currently negotiating a number of new management, local public services and local transport. out of 187 countries on the Corruption Perceptions Index free trade agreements, including with the UK, the EU, published in January 2020. India and Russia. New Zealand provides state access to education, health services and social welfare. These services, as well as Auckland, Wellington and Christchurch are the main the justice system and national transport infrastructure, centres of business. Auckland – home to around 35% of MONETARY POLICY are all centrally managed. the country’s population – is the largest regional economy, The New Zealand dollar is the unit of currency, freely generating nearly 38% of New Zealand’s GDP. Wellington is floating against all major currencies. the seat of government, and where the New Zealand Stock LEGAL SYSTEM AND COURTS The Reserve Bank of New Zealand is the central bank, Exchange and government sector organisations are based. The legal system is based on the English ‘common law’ and controls monetary policy. Under current policy, Christchurch is the South Island’s main business hub, with system, and many New Zealand laws are based on English the Reserve Bank has a dual mandate: to maintain price a strong focus on agriculture and primary industries. or Australian law. stability by keeping inflation between 1% and 3%, and Tourism is traditionally New Zealand’s biggest export to support full employment. New Zealand’s Official New Zealand’s hierarchical court system is made up of industry, representing about 6% of GDP. Agricultural Cash Rate is currently at 0.25%. the Supreme Court (now the country’s highest court), exports account for approximately 5% GDP. New Zealand the Court of Appeal, the High Court, and various There are no restrictions on the flow of capital or has a thriving innovation and investment community subordinate courts and tribunals. Judges and judicial earnings of a New Zealand business to overseas investors. particularly focused on agri-tech and bio-tech products officers are appointed non-politically and under strict rules Profits, dividends, interest, royalties and management fees and services. to maintain judicial independence. can be moved freely into or out of New Zealand, although New Zealand is a signatory to the Paris Agreement, and some payments to other jurisdictions may be subject to Although New Zealand has a statutory Bill of Rights, steps have been taken towards prompting or requiring non- r esident withholding tax. this does not have constitutional superiority over other businesses to reduce carbon emissions and otherwise statutes, and no court has power to overrule statute. adapt to the challenges presented by climate change GOVERNMENT A unique feature of New Zealand’s legal system is the (discussed more in Section 17). New Zealand is a “Westminster style” parliamentary “no fault” accident compensation scheme. Under this democracy, and constitutional monarchy (similar to scheme, plaintiffs cannot sue for losses arising from INTERNATIONAL TRADE the UK). The government is led by the Prime Minister. personal injury in New Zealand (except in very rare cases). New Zealand’s main trading partners are China, Australia, New Zealand governments are generally centrist, leaning