Doing business in: New ZealandIntroductionNew Zealand has a deregulated, decentralised economy directly exposed to international competition. Over recent decades, successive New Zealand governments have reformed New Zealand’s trade rules by removing many barriers to imports, ending most subsidies, and ensuring that the rules relating to overseas investment are designed to encourage productive overseas investment in New Zealand.The business environmentNew Zealand is consistently ranked by the World Bank and others as one of the most business-friendly countries in the world. New Zealand was ranked as the sixth best country for Operational Efficiency and Public Services in the World Bank’s Business Ready 2024 report and as the fourth least corrupt country in Transparency International’s Corruption Perceptions Index 2024.New Zealand is an independent sovereign state and a member of the British Commonwealth of Nations. Parliament is triennially democratically elected. New Zealand does not have a written constitution. The electoral system became a ‘Mixed Member Proportional’ representation system in 1993, which generally results in coalition governments led by either the National Party or the Labour Party.New Zealand is not a federal state. All legislation is passed by a single chamber, the House of Representatives, which is the highest law-making body in the country.New Zealand is a common law jurisdiction. The law is developed from case law (the decisions of the courts) and from statutes enacted by the New Zealand Parliament. Case law may be superseded by statute.Māori are the indigenous people of New Zealand. The indigenous rights of Māori are stated in the Treaty of Waitangi (signed in 1840 by representatives of the British Crown and some, but not all, Māori chiefs). The Treaty is recognised in many forms of New Zealand’s legislation. New Zealand courts also have held that Māori rights might be recognised by the common law, without statutory expression, and a decision maker may be required to weigh the Treaty rights/interests even where there is no Treaty reference in legislation.New Zealand has various regulatory bodies that may affect the conduct of business, and which are responsible for monitoring, licensing and controlling certain types of business activities. The key regulators include the Overseas Investment Office, the Reserve Bank of New Zealand, the Financial Markets Authority, the Commerce Commission, the Registrar of Companies and the Takeovers Panel.Forming a companyConducting business using a New Zealand companyThe Companies Act 1993 (the Companies Act) provides for the incorporation of a limited or unlimited liability company and regulates the management and operation of companies incorporated in New Zealand. The most common type of company is a company limited by shares, which is by far the most common entity used to carry on business in New Zealand.New Zealand no longer distinguishes between public and private limited liability companies, although if a company is listed on the New Zealand Stock Exchange, additional requirements will apply to it through the NZX Listing Rules and other financial markets’ legislation.Procedural mattersIncorporating a company in New Zealand is a relatively simple process and is completed online at the New Zealand Companies Office.Before a company can apply for registration, an application must be made to reserve the company’s name. The New Zealand Registrar of Companies will not reserve a name in certain circumstances specified in the Companies Act, including if the name is identical to, or almost identical to, the name of another registered company.The essential requirements for incorporating a company in New Zealand include having:•at least one shareholder, who will be issued one or more shares•at least one director (who must be at least 18 years of age and not be disqualified, under the Act, from being appointed to hold the office of director), of whom at least one must be a New Zealand resident or an Australian resident who is also a director of a company incorporated in Australia, and•a registered office and address for service in New ZealandThe remaining directors (if any) do not need to be based in New Zealand. The Companies Office often requires additional evidence from overseas directors and shareholders upon receipt of an application for incorporation of a new company. This can include requests for certified copies of director or shareholder consent forms and, in respect of directors, certified copies of proof of residential addresses.All documents must be provided in English or Māori, or accompanied by an official translation. Any translation must be attested to by the translator as a true and accurate copy of the original, include their contact details, be on the official letterhead of the translation service, bear the stamp or signature of the translator, and be accompanied by the original document(s) (or copies of the same). Certified true copies must contain an original signature, attestation and contact details from a notary, solicitor, Justice of the Peace or person of similar standing in the community.A company is created when a ‘Certificate of Incorporation’ is issued by the Registrar of Companies and the company is registered on the New Zealand Companies Register. Each company is allocated a unique identifying company number on registration as well as a New Zealand Business Number (NZBN). Provided that all necessary information is available, companies can be registered and trading within one business day. Governing document requirementsA New Zealand incorporated company will typically have a constitution (although this is not required under the Companies Act). A constitution sets out the rights, powers and duties of the company, the board, each director and each shareholder. If a company chooses to incorporate without a constitution, its internal procedures are automatically governed by the Companies Act. A company will need to have a constitution if there are provisions in the Companies Act that shareholders wish to negate, add to, or alter in accordance with the Companies Act. However, a constitution must not contravene, or be inconsistent with, the provisions of the Companies Act.Directors’ duties and liabilitiesDirectors of a company are responsible for the company’s management or supervising its management. The Companies Act codifies a number of duties of directors which, if breached, can result in personal liability. This includes the:•duty to act in good faith and in the best interests of the company•requirement for powers to be exercised for proper purpose•duty not to incur obligations the company cannot meet, and•duty of care owed by directorsIn addition to these duties, directors must also comply with the Companies Act and constitution and not engage in reckless trading. Beyond the Companies Act, company directors also have responsibilities under a range of legislation. For example, directors have duties in relation to health and safety at work matters and the Fair Trading Act 1986.Directors’ duties, how they are enforced, and directors’ liability for breaching them are currently being reviewed by New Zealand’s Law Commission. However, any legislative reforms in this area will not be introduced until after the Commission completes its review and issues its final report in 2027. Financial reporting requirementsUnder the Companies Act, the following companies must prepare audited financial statements:•every large New Zealand company •every New Zealand company that is a public entity•every large overseas company•every New Zealand company with ten or more shareholders unless the company has ‘opted out’ in accordance with the Companies Act•every New Zealand company with fewer than ten shareholders if the company has ‘opted in’ in accordance with the Companies ActIf none of the above categories applies, a company will not be required by the Companies Act to prepare audited financial statements, but may be required to do so by another statute (for example, the Financial Markets Conduct Act 2013).For the purposes of the Companies Act and subject to an exemption available for ‘inactive entities’, an overseas company carrying on business in New Zealand or a subsidiary of an overseas company is ‘large’ if either: •as at the balance date of each of the two preceding accounting periods, the total assets of the overseas company and its subsidiaries (if any) exceed NZD 22m, or •in each of the two preceding accounting periods, the total revenue of the entity and its subsidiaries (if any) exceeds NZD 11m There is a higher threshold of 'large' for New Zealand companies. For the purposes of the Companies Act and subject to an exemption available for ‘inactive entities’, a New Zealand company is ‘large’ if either: •as at the balance date of each of the two preceding accounting periods, the total assets of the company and its subsidiaries (if any) exceed NZD 66m, or •in each of the two preceding accounting periods, the total revenue of the entity and its subsidiaries (if any) exceeds NZD 33m A company can meet the asset threshold in the ‘large’ test but not be considered a ‘large’ company if it is an ‘inactive entity’. A company will be an ‘inactive entity’ in respect of an accounting period if:•during that accounting period, the company: has not derived, or been deemed to have derived, any income; has no expenses; has not disposed of, or been deemed to have disposed of, any assets, and•at the end of that accounting period, the company has no subsidiaries or all of its subsidiaries are inactive entities in respect of that period.While an ‘inactive entity’ is not required to prepare financial statements under the Companies Act, it must file an inactive declaration at the Companies Office within five months after the company’s balance date if it is ‘large’ and also a subsidiary of an overseas company.Where a company is required to prepare audited financial statements and that company has a subsidiary, financial statements must be prepared for the group of companies.If an overseas company is required to prepare financial statements and has a New Zealand business that is large, the financial statements must include, in addition to the financial statements for the overseas company, financial statements for its New Zealand business, prepared as if the New Zealand business was conducted by a company formed and registered in New Zealand.All large overseas companies that carry on business in New Zealand and all large New Zealand companies with 25% or more overseas ownership are required to file audited financial statements with the Companies Office (unless certain exemptions apply). The Registrar may exempt large overseas companies from preparing financial statements if they are satisfied that compliance would be unduly onerous or burdensome, reporting requirements in the country where the company is incorporated are satisfactory, and the extent of the exemption is not broader than what is reasonably necessary to address the matters that gave rise to the exemption. The Registrar may grant an exemption on any terms and must publish their reasoning for granting the exemption.However, if the New Zealand branch of the overseas company is large, financial statements for the New Zealand business are still required to be audited and publicly filed.The Registrar has issued a class exemption for companies incorporated in Australia that have been granted relief by Australian Securities and Investments Commission (ASIC) instrument 2016/785. Companies that qualify must provide their consolidated financial statements, prepared and audited to Australian standards, to the Companies Office within 20 working days of the date they were required to be signed, along with a copy of the auditor’s report, a copy of the ASIC instrument, a copy of the Deed of Cross Guarantee (as required by the ASIC instrument), and a memorandum signed by two directors confirming the applicable exemption and ASIC relief. The class exemption will expire on 31 July 2030.The New Zealand Government is expected to introduce legislation in late 2025 which, if passed, will make a number of changes to the Companies Act. The proposed changes largely address specific issues that have been encountered in practice with the Companies Act, and they are designed to make things easier for businesses by saving time and money or clarifying provisions. Changes to the Act are also being made to further prevent the use of corporate structures for illicit purposes, which includes the introduction of unique identifier numbers for directors and shareholders. Investing in New ZealandAs part of its economic philosophy, the New Zealand Government believes that overseas investors will be attracted to New Zealand because of sound, consistent economic policies, good rates of economic growth and a stable political system.New Zealand does not provide broad monetary incentives for overseas investors. However, government funding (generally provided through tax incentives) is available for some sectors of operation and for eligible research and development expenditure in New Zealand.New Zealand has overseas investment controls that require overseas (non-New Zealand) persons to obtain approval before they can invest in certain types of assets.An overseas investor is required to comply with the general law of New Zealand in the same way as a New Zealand investor. For example, the Companies Act (regulating companies incorporated in New Zealand and overseas companies ‘carrying out business’ in New Zealand), the Partnership Law Act 2019 (regulating partnerships), the Commerce Act 1986 (regulating competition or anti-trust law) and the Banking (Prudential Supervision) Act 1989 (regulating banking) affect overseas and New Zealand investors in the same way.Financing a companyA New Zealand company can be financed by way of share capital and/or by way of debt. Finance may be provided by shareholders, a parent company and/or third-party lenders or investors. There is no prescribed minimum level of equity capital required by a New Zealand company. However, the Companies Act prohibits a company from undertaking certain transactions (including paying dividends, repurchasing its own shares, and providing financial assistance) unless it meets the ‘solvency test’. The solvency test requires the company to be able to pay its debts as they become due in the normal course of business, and that the value of the company’s assets is greater than the value of its liabilities (including contingent liabilities).Generally, interest incurred on debt financing is deductible for New Zealand income tax purposes, subject to the application of the thin capitalisation, transfer pricing and/or hybrid mismatch rules.There are thin capitalisation rules that apply to New Zealand companies that are 50% or more owned or controlled by a non-resident or a group of non-residents acting together. They also apply to non-resident companies. The inbound thin capitalisation rules apportion deductions for interest expenditure otherwise available to a company where the safe harbour debt-to-asset ratio for the ‘New Zealand group’ exceeds 60% and where the relevant company’s debt percentage is more than 110% of the debt percentage of the ‘worldwide group’. New Zealand’s transfer pricing rules restrict a company’s interest deductions to an arm’s length amount in the case of a cross-border related party borrowings. A specific interest limitation rule, which is unique to New Zealand, requires certain features to be disregarded and that a specified credit rating be applied when determining an arm’s length amount of interest. New Zealand has hybrid mismatch rules that can apply to counteract ‘deduction/non-inclusion’ and ‘double deduction’ outcomes, as well as the tax effects of hybrid entities, dual resident scenarios and ‘imported mismatches’ which may impact the deductibility of interest incurred by a company. Registration on the Overseas RegisterAn overseas (non-New Zealand) company can conduct business in New Zealand without needing to form a new New Zealand incorporated subsidiary company. However, that overseas company is required to register as an overseas company if it is 'carrying on business' in New Zealand on the New Zealand Companies Office’s Overseas Register (Overseas Register). In applying for registration, an overseas company must state its principal place of business in New Zealand. The Companies Act does not provide a clear definition of what activities constitute 'carrying on business', but does provide some guidance. Carrying on business will include: •establishing or using a share transfer or share registration office in New Zealand, or •administering, managing or dealing with property in New Zealand as an agent, personal representative or trustee, even if this is through the company’s employees or an agentFurther, the Companies Act states that the following activities will not by themselves amount to carrying on business:•becoming a party to, or settling a legal proceeding, claim or dispute•undertaking activities that concern only the company’s internal affairs, such as holding meetings of directors or shareholders•maintaining a bank account, investing funds, or buying or leasing property•selling property through an independent contractor•creating evidence of a debt or creating a charge on property•collecting or securing debts, or enforcing security rights in relation to those debts•carrying out a one-off transaction that takes no more than a month to complete and will not be repeated•soliciting or procuring an order that becomes a binding contract only if the order is accepted outside New Zealand •entering into a contract of insurance as an insurer with a New Zealand policyholder It is advisable for overseas companies to seek New Zealand professional advice prior to commencing business in New Zealand.Registration of an overseas company on the Overseas Register does not establish a separate legal entity to the overseas company. For that reason, the overseas company is directly responsible for any debts or liabilities relating to its New Zealand business.An overseas company wishing to register on the Overseas Register in New Zealand must first reserve its company name with the Companies Office before business is commenced. Within ten working days of commencing business in New Zealand, the Companies Act requires an overseas company to deliver to the Registrar an application for registration. The application must include specified information relating to the overseas company, including the full names and residential addresses of its directors, the date which the company commenced carrying on business in New Zealand, and evidence that the company is incorporated outside New Zealand and a copy of the instrument constituting or defining the constitution of the company (and, if these documents are not in English, a certified translation).Overseas companies that are incorporated in Australia do not need to file their constitution, evidence of incorporation or director details with the Registrar due to information sharing facilities implemented by the New Zealand Companies Office and the Australian Securities and Investment Commission.An overseas company registered in New Zealand may also be required to file with the Companies Office, audited financial statements for both the overseas company and for the New Zealand branch operations (see the Financial reporting section below).Opening a bank accountA subsidiary of an overseas company or a branch office is able to open a bank account in New Zealand, provided it complies with the bank’s account opening procedures. New Zealand banks conduct due diligence on new customers in order to comply with New Zealand's anti-money laundering and sanctions legislation and to meet their own risk appetite. The Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AML/CFT Act) requires banks to obtain and verify identity information about new customers, the beneficial owners of new customers, and any persons acting on behalf of a customer. Enhanced customer due diligence may be required for persons identified as higher risk, in which case the bank will also seek to obtain and verify information relating to the customer’s source of wealth or source of funds. Banks are also required to comply with New Zealand sanctions regulations, through which New Zealand implements UN sanctions, as well as the Russia Sanctions Act 2022, which gives effect to New Zealand’s autonomous sanctions. In practice, at onboarding, banks will check the identity information of a prospective customer (and any beneficial owners or agents) as against global sanctions lists to identify possible matches with designated persons.Normally, to open an account, all signatories, directors, trustees or partners will need to attend the appointment at the same time and provide the relevant identification documents, although different banks may have different procedural requirements for this. An IRD number and withholding tax rate should also be supplied in order to ensure that the bank withholds any tax on accruing interest at the appropriate rate (and not at a penal rate).Utilising office spaceNew Zealand offers a largely pragmatic legal framework for businesses to acquire, lease, develop, and operate property. However, the commercial environment can be complex due to overlaps with overseas investment regulations and local planning rules, all of which can significantly impact timelines, costs and risk allocation. Key considerations for most businesses include understanding property ownership structures, navigating overseas investment requirements, negotiating commercially sound leases and ensuring compliance with planning and building regulations.Title to propertyMost businesses occupying business premises in New Zealand either own the underlying property (via a freehold or ‘fee simple’ interest) or lease their premises. Each offers distinct advantages and drawbacks, depending on a business’ commercial objectives. Freehold ownership provides businesses with indefinite tenure and potential for capital appreciation but also ties up that business’ capital and allocates various risks and costs to the owner. Leasehold interests, by contrast, allow the business to preserve its capital, provide flexibility and allow that business’ occupancy to be aligned with its operational needs, but are constrained by limited lease terms, rent payment obligations and often strict controls on the business’ use and development of the premises. Other less common ownership and occupancy arrangements for businesses include unit titles and licences. Unit titles are more common in smaller multi-unit developments and impose rights and obligations on owners and tenants in relation to the use of ‘common property’ and the payment of shared levies. Licences are generally more informal and flexible arrangements than leases, often used for short-term or shared occupancy arrangements, but they offer less security of tenure and fewer statutory protections to businesses.Overseas Investment and propertyForeign investment in freehold and certain leasehold interests in ‘sensitive land’ in New Zealand requires the approval of the Overseas Investment Office (OIO) unless an exemption applies. Sensitive land is broadly defined and includes all residential land, all non-urban land more than five hectares in area, and a range of other land (such as interests in land located in waterfront areas that are constructed over un-reclaimed parts of the foreshore, e.g. on docks). The definition also captures land which adjoins certain types of sensitive land. Determining whether land is sensitive is complex and should be done by a provider with specialist expertise. See ‘Regulatory Compliance’ for further information.Overseas persons are generally free to lease commercial properties in New Zealand. However, OIO consent will be required if the commercial property which is to be leased is considered ‘sensitive land’ and the lease is for a term of ten years or more (including any right of renewal). Proposals for overseas investment in most types of sensitive land (excluding residential land) require evidence that the overseas investors intend to reside in New Zealand indefinitely or that the proposal is to the benefit of New Zealand. In determining whether the proposal for ownership or control of sensitive land is for the benefit of New Zealand, the OIO will have regard to certain factors, including economic, environmental and heritage factors. Alternative tests apply to land that is sensitive only because it is residential (including demonstrating that it is for non-residential use). Whether land is residential is determined by its classification on the relevant local authority’s valuation roll. Overseas investors cannot take an interest in residential land (either through a lease for longer than three years (including rights of renewal) or outright purchase), unless they are New Zealand, Australian or Singaporean citizens or permanent resident class visa holders, or an exemption applies. To meet one of the available exemptions, overseas investors must show that they are acquiring the land to increase the housing supply in New Zealand or to use the land for non-residential purposes.Commercial leasing Commercial leasing for a larger number of businesses in New Zealand, is the principal means by which they occupy commercial property (across various sectors). Commercial leases are governed by the Property Law Act 2007, and must be in writing and signed. Although leases may be registered, it is uncommon except for long term leases or leases with material strategic value.The final lease terms agreed between the parties often depend on the tenant’s operating model and the relative bargaining power of the parties. Leases in New Zealand are comprehensive and often follow (or are based on) one of the ‘standard form’ lease templates, which are widely used in the market. Leases cover a wide variety of commercial terms, most of which are subject to negotiation between the landlord and the tenant: •term (including rights of renewal •rent (including rent review mechanisms)•lease security (for example parent company guarantees or bank guarantees)•tenant maintenance, repair, and make-good obligations, and •assignment, subletting, and change of control restrictions Given New Zealand’s seismic context, leases often address the seismic strength rating of the building/premises and may include landlord seismic strengthening obligations and rent abatements if the premises are found to be ‘earthquake prone’. Buying and selling propertyAs an alternative to leasing land, businesses may (subject to regulatory restrictions imposed under the Overseas Investment Act 2005 as noted above) purchase land in New Zealand. Agreements for the sale and purchase of land must be in writing and signed. These agreements can be unconditional or, commonly, subject to conditions precedent. Purchaser‑favourable conditions often include the requirement for OIO consent (where applicable), or a due diligence condition. Unlike many jurisdictions, it is common for due diligence to occur post‑signing (under a contractual condition), rather than being completed before the sale and purchase agreement is signed. Transfers of land titles are registered electronically with Land Information New Zealand (LINZ). Use and development of propertyThe Resource Management Act 1991 (RMA) regulates use of land, air, and water in New Zealand, through regional and territorial authorities. Each authority has planning and zoning rules specifying permitted activities and those requiring resource consent. Authorities also issue Land Information Memoranda (LIMs), which collate property‑specific information held by the relevant authority (including hazards and special features) relevant to development or use of property. Where consent is required, applications are lodged with the relevant authority and may be granted, sometimes subject to conditions. The New Zealand Government is currently underway with significant reviews of the RMA and the wider resource management system, so changes in this space are anticipated.Building in New ZealandThe Building Act 2004 and the Building Code govern building work in New Zealand. Most building work requires building consent from the territorial authority, and a ‘code compliance certificate’ is issued on completion if the works meet Building Code requirements (unless the work is exempt). Immigration controlsNew Zealand's immigration law is set out in the Immigration Act 2009 (Immigration Act), Immigration Regulations and in Immigration New Zealand's Operational Manual.The Immigration Act provides for two main categories of visa—residence class visas and temporary entry class visas. Subject to resident class visas holders showing a commitment to New Zealand (eg spending enough time in New Zealand and, tax residence status), residence class visa holders may be eligible to apply for permanent resident visas. Temporary entry class visas consist of temporary, interim and limited visas.New Zealand has a universal visa system. This means that all foreign nationals must have an appropriate visa to work in New Zealand, unless a visa waiver applies. Depending on whether a person is from a visa waiver country, a visa may be required to travel to, enter and stay in New Zealand.Working in New ZealandA valid work visa is required for any person who is not a New Zealand or Australian citizen or permanent resident, or subject to an exemption, to work in New Zealand. A work visa holder must comply with any limitations on the work they undertake that is imposed by their visa.Unless an overseas person already holds an ‘open’ visa allowing them to work in New Zealand (such as a resident visa, working holiday visa or partnership visa) they will need to be supported by an employer to obtain a work visa. It is an offence for an employer to employ an offshore person who does not have an appropriate visa to work in New Zealand.Generally, all employers wanting to hire offshore workers will need to be accredited. Employers can become accredited under the Immigration New Zealand’s Accredited Employer Work Visa (AEWV) scheme. The AEWV is a commonly used temporary work visa. To employ migrants on this visa, employers must gain accreditation (they need to show they are a viable and genuinely operating business that is compliant with employment, immigration and business standards). The employer must pass a job check and the migrant must obtain the relevant visa in order for the employer to hire a migrant on this visa. Employers can apply for different levels of accreditation depending on the number of migrants they wish to hire. The job check confirms that the job pays the market rate, the terms of employment comply with New Zealand employment laws and standards and (unless an exception applies—ie they are on Immigration New Zealand’s Green List or earning at least twice the median wage) the job meets the labour market test. The labour market test is where the employer checks that there are no New Zealand citizens or residents available for the job before advertising it to migrants.The Worker Protection (Migrant and other Employee) Act 2023 was introduced to prevent migrant worker exploitation. It allows immigration officers and Labour Inspectors to request documents (such as time records, leave records and other documentation relating to the remuneration or employment conditions of migrant employees), to ensure employers are meeting their legal obligations. It is an offence to fail to provide the requested documents and Immigration New Zealand can also issue infringement penalties to employers in breach of immigration rules. People wanting to live and work permanently in New Zealand can (subject to meeting a number of eligibility requirements) apply for a straight to residence visas or a work to residence visa.In appropriate circumstances, a migrant’s partner and dependent children can be granted visas allowing them to live, study or work in New Zealand.From November 2025, people interested in acquiring and growing a New Zealand business can apply for the Business Investor Work Visa. This visa replaced the Entrepreneur Work Visa, which applications have closed for. The Business Investor Work Visa allows holders to stay in New Zealand for up to four years and requires, amongst other things, that they invest NZD 1m in an existing business for three years or invest NZD 2m in an existing business for 12 months.Provided that they meet one of these investment thresholds, investors may either purchase the business outright or acquire at least 25% of the business. At the end of the respective term, they may apply for residency if they have, amongst other things, actively operated and grown the business, maintained five full-time equivalent jobs and created at least one new full-time equivalent job for a New Zealand citizen or resident.ResidenceEvery person wishing to remain in New Zealand permanently must apply for residence. Residence entitles a person to live, study and work indefinitely in New Zealand.The main categories for residency applications are Business, Skilled Migrant, Family, and International/Humanitarian.The Skilled Migrant category has a minimum English language requirement. All categories have health and character requirements and some have specific requirements.High net worth investors interested in living indefinitely in New Zealand can apply for an Active Investor Plus (AIP) Visa. Its objective is to attract skilled and experienced active investors to help build globally successful New Zealand businesses that align with the New Zealand Government’s objectives. Among other requirements, applicants must invest at least NZD 5m under the Growth category for at least three years or at least NZD 10m for five years under the Balanced category in acceptable investments in New Zealand. They must spend a required number of days in New Zealand. Once they have transferred their funds to New Zealand and placed in acceptable investments, they will be issued a residence class visa and, at the end of their respective term (provided they have met all requirements), they can then apply for permanent residence visas.Key employment lawsEmployment relationships in New Zealand are regulated by a combination of legislation and the common law.The principal statute in New Zealand is the Employment Relations Act 2000 (ERA), which is founded on the concept of ‘good faith’ (see further below). In June 2025, the New Zealand Government introduced the Employment Relations Amendment Bill (Amendment Bill) which would amend the ERA. At the time of writing, the Amendment Bill is under Select Committee consideration. The current proposals in the Amendment Bill include:•clarifying the distinction between employment and principal/contractor arrangements•changing the way that personal grievance (a claim against an employer by an employee) remedies are assessed•introducing a high-income threshold for unjustified dismissal claims, and •changing rules around how employers must deal with collective agreements There are other statutes regulating holidays, parental leave, minimum wages, health and safety, privacy, human rights and minimum working conditions. Good faithNew Zealand's employment relations system is underpinned by a statutory obligation on employers, employees and unions to deal with each other in 'good faith' in employment matters. Among other things, employment matters include bargaining for employment agreements, consultation between an employer and its employees, a proposal by an employer that might impact on the employer’s employees, discussing and proceeding with any proposal which may affect employees, making employees redundant and allowing workplace access to union representatives. The duty of good faith contains several specific requirements imposed by the ERA that parties must comply with, including requiring parties not mislead or deceive each other, to be active and constructive and to be responsive and communicative in their employment relationship.Employment agreementsUnder the ERA, employment relationships for all employees in New Zealand are governed by either:•an individual employment agreement (IEA), being a contract between an employer and a single employee, or•a collective agreement (CA), being a contract between one or more employers, one or more unions, and two or more employees (who come within the agreement’s coverage clause)An employee can agree to enter into an IEA or, alternatively, can join a union, which may negotiate a CA with the employer. Both IEAs and CAs must be in writing and contain certain minimum terms, which are set out in the ERA and other employment-related legislation such as the Holidays Act 2003. In all other respects, terms of employment are open for negotiation between the employee (or the union or other representative on the employee’s behalf) and the employer. For example, entitlements to redundancy payments, overtime rates, and long service leave are matters for negotiation. A number of procedural requirements also apply to bargaining for IEAs and CAs:•before entering into an IEA, employers are required to provide the prospective employee with a copy of the intended agreement, inform the prospective employee that they are entitled to seek independent advice about the intended agreement, and provide them with a reasonable opportunity to do so•unions are only able to negotiate CAs through a collective bargaining process. There are various ‘good faith’ requirements that apply to collective bargaining. In short, employers and unions must negotiate in good faith for a CA. There is an obligation to conclude a CA unless there is a genuine reason, based on reasonable grounds, not toMost agreements are indefinite and continue until the agreement is terminated by either party. However, both casual and fixed term employment arrangements are recognised by the law (with the requirements for fixed term agreements being set out in the ERA). Termination of employmentAn employee can terminate their employment by giving the employer notice of resignation. On the other hand, an employer must have a substantive reason for terminating an employee’s employment (eg for serious or repeated misconduct, poor performance, medical incapacity and redundancy) and follow a fair and reasonable process before giving notice of termination of employment.Under the ERA, any dismissal or other action by an employer that may have an adverse effect on the continuation of employment of the employee must meet the statutory test of justification—the employer's actions, including how the employer acted, must be what a 'fair and reasonable' employer could have done in all the circumstances at the time the dismissal (or other action) occurred. This statutory test of justification includes: •sufficiently investigating the allegations against the employee•raising the concerns with the employee•providing the employee with a reasonable opportunity to respond to the concerns, and •genuinely considering the employee’s explanation regarding the allegations before making a decision The ERA also provides protection for employees when their employers’ business is restructured and their work will be performed by or on behalf of a new employer. Certain categories of employee (such as those engaged in the cleaning or food catering industries) are deemed ‘vulnerable’ to the effects of restructuring. When the employer’s business is restructured, those vulnerable employees have the right to elect to transfer to the new employer on identical terms and conditions of employment. Employees, who are not deemed to be ‘vulnerable’, do not have a right to elect to transfer to a new employer. The CAs and IEAs of these employees must contain an employee protection provision. These provisions set out the procedures that the employer will follow when negotiating with the new employer in relation to the effects of the restructuring upon employees and the process to be followed at the time of restructuring to determine an employee’s entitlements (if any) if they are not offered employment by a new employer.Employment relationship problemsIn relation to any potential adverse action in the workplace and/or termination of employment (or any other disciplinary action), employees can raise a personal grievance claim. Personal grievances for anything other than sexual harassment claims must be raised within 90 days from when the action alleged to give rise to a personal grievance arose or came to the employee’s notice. An employee has 12 months in which to raise a personal grievance for sexual harassment.All employment agreements must include a plain language explanation of the services available for the resolution of employment relationship problems. Mediation provided by the Ministry of Business, Innovation and Employment is required in almost all situations as the first forum for dispute resolution. Failing resolution at mediation, formal legal proceedings relating to employment disputes, grievances and other employment relationship problems are determined by specialist institutions (the Employment Relations Authority (Authority) and the Employment Court (EmpC)). Employees can take claims against their employers for a number of reasons including (but not limited to) unjustified dismissal, unjustified disadvantage, discrimination or sexual or racial harassment. In addition, ‘disputes’ may be pursued in respect of the interpretation, application or operation of an IEA or a CA.Employees working under the control of a business/organisation other than their employer (e.g. in a labour-hire context) can also apply to the Authority or EmpC to join the other business/organisation as a party to a personal grievance they have raised as a controlling third party. If joined as a controlling third party, the other business/organisation may be liable for a portion of any remedies awarded to the employee.Wages or salarySubject to certain taxation and other legislation, under the Wages Protection Act 1983, an employer must pay the entire amount of any wages/salary to an employee without deduction, unless the deduction is requested, or consented to, by the employee. Wages/salary must be paid in cash unless otherwise agreed to by the employee. Most commonly, wages/salaries are paid to employees by direct credit.The Minimum Wage Act 1983 allows minimum wages to be set by Order in Council. This Act also provides for a 40-hour, five-day week (not including overtime), but this can be varied by agreement between the employee and the employer.KiwiSaverKiwiSaver is a voluntary retirement savings scheme that all employers must offer to their employees. The scheme is governed by the KiwiSaver Act 2006. Under the scheme, employees who participate in KiwiSaver must contribute at least 3% of their gross salary or wages to the KiwiSaver scheme of their choice. Employers must also contribute 3% on behalf of each participating employee. The default rate of employee and employer contributions for KiwiSaver will rise to 3.5% on 1 April 2026 and 4% on 1 April 2028.Health and safetyThe Health and Safety at Work Act 2015 (HSW Act) is the primary statute regulating workplace health and safety in New Zealand. A business must ensure, ‘so far as is reasonably practicable’, the health and safety of workers who work for the business. A breach of the HSW Act is a criminal offence.Where there are multiple duty holders who owe overlapping duties to the same workers, those businesses must consult, cooperate and coordinate their activities. Officers (including legal directors and those in senior governance roles) each owe a ‘due diligence’ duty to take reasonable steps to ensure their business is meeting its health and safety obligations. Businesses and individuals are exposed to significant penalties under the HSW Act, including fines and imprisonment.Contracting with third partiesThe principles that govern contracting in New Zealand are similar to those of other Commonwealth jurisdictions. Those principles include:PrincipleGuidanceFreedom of contractParties are largely free to contract as they wish without government interference. In particular situations, terms not expressly included by the parties may be implied into contracts by common law or statute. For instance, the Contract and Commercial Law Act 2017 provides a set of default rules that will apply to contracts for the sale of goods, unless inconsistent with the express terms of the contract, and the Consumer Guarantees Act 1993 implies guarantees as to the quality and standard of goods and services into consumer contracts.Certainty of termsThe terms of a contract must be sufficiently certain in order to be legally binding and enforceable between the parties. The contracting parties should ensure the terms of the contract are clear and unambiguous, and that each party’s obligations are clearly stated. The test is an objective one, and although the court may imply terms into the contract and/or use extrinsic evidence to determine intent, if a significant matter is ambiguous, it may find the contract void for uncertainty.AuthorityFor a contract to be enforceable, it is generally necessary that any person entering the contract on behalf of the contracting party has the express or implied authority to bind the contracting party. Therefore, steps should be taken to verify that the person entering into the contract has the required authority.CapacityThere is a presumption that a person entering into a contract has full capacity to do so. However, capacity can be restricted by common law rules and statute (including for minors and persons lacking mental capacity), or by the internal/constitutional documents of a company, and so should always be checked.FormationIt is a requirement that certain types of contracts must be written or be executed by deed to be legally binding (for example, certain contracts relating to the disposition of interests in land). Other contracts will be enforceable whether they are written, oral, or a combination of the two. While generally, contracts can be oral, it is recommended that all contracts are written and signed by each party, as the terms of a disputed oral contract may be more difficult to prove.Implied termsIn addition to the terms that the parties have expressly adopted, other 'implied' terms may be included in the contract by statute or the courts. They are equally as binding and enforceable as the express terms of a contract.The New Zealand Supreme Court in 2021 clarified the test for implication for a term by the courts. The Court affirmed the BP Refinery test as representing the law in New Zealand, while adding some qualifications, including that the legal test for the implication of a term is a standard of strict necessity, and that an unexpressed term can only be implied if the court finds that the term would spell out what the contract, read against the relevant background, must be understood to mean.Liquidated damages clausesLiquidated damages clauses set predetermined amounts to be paid by the party in breach in the event of a breach of contract. Courts have traditionally been reluctant to enforce these provisions unless they are no more than a genuine pre-estimate of a loss flowing from the breach.However, in 2020, the New Zealand Supreme Court held that a clause stipulating a consequence for breach of a term of a contract will only be unenforceable if that stipulated consequence is out of all proportion to the innocent party’s legitimate interests in performance of the relevant contract term. The consequence will be out of all proportion if it is exorbitant when compared with the legitimate interest protected by the relevant contract term. This approach allows for less interference by the court in the contractual terms negotiated between the parties.Limitations of liabilityCommon methods for limiting liability in contract include:•placing a time limit on a party’s ability to make a claim•limiting the maximum liability of a party•limiting the kinds of loss that can be recovered in the event of breach—for instance, excluding indirect or consequential loss•excluding specific kinds of liabilityThe New Zealand courts recognise the economic reality and legitimacy of risk allocation through limitation of liability clauses, as well as the principle of freedom of contract, but they are reluctant to enforce them in some circumstances. Therefore, limitation clauses must be drafted in clear and unambiguous language.In some circumstances, it is not possible to limit liability through a contract. Some statutes, such as the Consumer Guarantees Act 1993 (CGA) and the Fair Trading Act 1986 (FTA), prevent parties from contracting out of certain types of liability.Taxation overviewNew Zealand income tax is imposed tax on the worldwide income of New Zealand residents and on the New Zealand-sourced income of non-residents, subject to the availability of relief under an applicable double tax agreement (DTA). New Zealand currently has a network of DTA’s with 41 countries and jurisdictions.Income tax is levied on the annual gross income from all sources, less annual total deductions and any losses carried forward. The net amount is the taxpayer’s taxable income. New Zealand does not have a comprehensive capital gains tax. However some gains, which would otherwise be capital in nature, can be subject to New Zealand income tax (for example, where land or personal property was acquired for the dominant purpose of disposal, gains on any ‘financial arrangement’ and a specified percentage of the value of certain ‘foreign investment funds’). New Zealand also has a bright-line test for residential land where gains are subject to New Zealand income tax when the land is disposed of within two years, subject to exclusions such as for a person’s main home. The tax year runs from 1 April to 31 March in the following year. However, there is an ability for non-individuals to obtain approval to adopt a non-standard balance date, for example, to align the balance date of a New Zealand subsidiary company with that of its non-resident parent.IndividualsIndividualsAn individual is resident in New Zealand for New Zealand income tax purposes where:•they have a permanent place of abode (broadly, a fixed or habitual home) in New Zealand (whether or not they have a permanent place of abode elsewhere) •they are physically present in New Zealand for more than 183 days in any 12-month period, or•they are absent from New Zealand in the service of the Government.The rate of New Zealand income tax that applies to individuals varies between 10.5% and 39%, depending on the taxable income of the individual. New Zealand has a ‘transitional resident’s’ exemption for new migrants and certain returning New Zealanders who become New Zealand tax residents. The ‘transitional resident’s’ exemption exempts an individual’s foreign-sourced income (other than employment or personal services income) for approximately four years. During this time, the individual’s New Zealand-sourced income continues to be subject to New Zealand income tax. CompaniesA company is resident in New Zealand for New Zealand income tax purposes where:•it is incorporated in New Zealand •it has its head office in New Zealand•it has its centre of management in New Zealand, or•its directors exercise control of the company in New Zealand The corporate tax rate in New Zealand is 28%. New Zealand does not have a branch repatriation tax. New Zealand has a ‘dividend imputation system’, where tax paid by New Zealand resident companies can be attached as imputation credits to dividends that are paid to its shareholders. New Zealand resident shareholders can use these imputation credits against their tax liability. While non-resident shareholders cannot use imputation credits in the same way, the attachment of imputation credits can eliminate or reduce non-resident withholding tax (NRWT) on the dividend. Fully-imputed dividends paid to non-residents can effectively be paid free of NRWT.As noted in the Financing a company section above, New Zealand has thin capitalisation, transfer pricing and hybrid mismatch rules that may be applicable. A company should be able to carry forward its tax losses to set off against future taxable income where the ‘shareholder continuity test’ or ‘business continuity test’ are satisfied. Under the ‘shareholder continuity test’, tax losses can be carried forward where 49% continuity of ownership is maintained. If there is a greater than 51% change in ownership, tax losses from the 2013/14 income year onwards may still be able to be carried forward if there is no ‘major change’ (other than certain permitted major changes) in the company's business activities during a defined period following the ownership change. Tax losses can also be transferred to other group companies in a profit position, provided that certain conditions are satisfied. The OECD’s Pillar Two Global Anti-Base Erosion Rules (GloBE Rules) apply in New Zealand, requiring in-scope New Zealand headquartered multinational groups and overseas headquartered multinational groups with a presence in New Zealand (for example, a subsidiary or a branch) to pay top-up tax to the New Zealand Inland Revenue Department where the effective tax rate in the relevant jurisdiction is below the 15% rate specified in the GloBE Rules.Withholding taxesResident withholding tax (RWT) applies to payments of interest and certain dividends made by New Zealand residents and non-residents that have a ‘fixed establishment’ (a fixed place of business in which substantial business is carried on) in New Zealand to New Zealand residents and in the case of payments of interest, to non-residents that have a ‘fixed establishment’ in New Zealand and meet certain other requirements. RWT does not need to be withheld by the payer of interest or dividends where the recipient has RWT-exempt status. NRWT applies to payments of interest, dividends and royalties paid by a New Zealand resident company to non-residents that are not subject to the RWT rules. The domestic rate of NRWT on interest and royalties is 15%. The domestic rate of NRWT on dividends is 30%, but this may be reduced where the dividend is fully-imputed (0% where the recipient holds a direct voting interest of 10% or more of the company paying the dividend, and 15% otherwise). The domestic rates of NRWT may be reduced if there is an applicable DTA between New Zealand and the jurisdiction of residence for the recipient. Payments of interest may be subject to an approved issuer levy (AIL) equal to 2% of the interest payable by the borrower, in lieu of NRWT. AIL may be reduced to 0% for certain widely-held bonds. Broadly, AIL is only applicable where the required registrations are undertaken, the loan is between ‘non-associated’ parties and is not otherwise treated as ‘related-party debt’.Where a payment is made by a New Zealand resident to a ‘non-resident contractor’ (broadly, a non-resident performing services in New Zealand or supplying the use of, or right to use, certain personal property in New Zealand), non-resident contractors tax (NRCT) must be withheld at the rate of 15% of the payments (subject to the availability of a NRCT exemption certificate). TrustsIncome derived by trusts is either trustee income or beneficiary income. Trustee income is all income derived by a trustee other than beneficiary income, and is taxed at the rate of 39% (a 33% rate applies where trustee income (after deductible expenses) does not exceed NZD 10,000).Beneficiary income is income that is distributed in the same income year in which it is derived by the trust, or within the later of six months from the end of that income year and the date by which the trustee files (or should have filed) the income tax return for the income year. Beneficiary income is generally taxed at the beneficiary’s marginal tax rate (with exceptions for ‘minor beneficiaries’ and certain ‘close company’ beneficiaries which are taxed at a rate of 39%). Trustees of trusts settled outside New Zealand may be subject to New Zealand income tax on their worldwide income if the ‘settlor’ (broadly, a person who transfers value to the trust) is a New Zealand tax resident.‘Taxable distributions’ from ‘non-complying trusts’ are taxed at a rate of 45%, to discourage New Zealand tax resident settlors from making use of trusts that are not subject to New Zealand income tax on their worldwide income.Goods and services tax (GST)GST is charged at a rate of 15% on the supply of most goods and services. Certain supplies may be charged with GST at a rate of 0%, for example, certain supplies of land. Significant exceptions are for supplies of financial services and residential rental accommodation, which are exempt from GST. A person is eligible to register for GST if they carry on or intend to carry on a ‘taxable activity’ (any activity, continuously or regularly, involving the supply of goods and services to another person for consideration). Registration is required when taxable supplies made by the person in New Zealand have exceeded or are likely to exceed NZD 60,000 in any 12-month period. Otherwise, a person may voluntarily register if they are below the NZD 60,000 threshold and carry on or intend to carry on a ‘taxable activity’. GST may be charged on supplies made by non-resident suppliers where: •the relevant goods are in New Zealand when supplied•the relevant services are physically performed in New Zealand•supplies of ‘low value’ goods (those with a Customs value of NZD 1,000 or less) are made to customers in New Zealand, orsupplies of ‘remote services’ (services that have no necessary connection between the place the service is physically performed and the location of the recipient of the services) are made to customers in New ZealandIn the case of ‘low value’ goods and ‘remote services’, an exemption applies where the customer is GST-registered and acquired the goods or services for the purposes of their ‘taxable activity’, unless the offshore supplier chooses to treat the supplies as being chargeable with GST. An offshore supplier operating an ‘electronic marketplace’ (ie online stores that facilitate sales by underlying suppliers to recipients) may be liable to return GST on all supplies made through the electronic marketplace as if the operator was the supplier of the goods or services.GST is also charged on supplies of certain accommodation and transportation services provided through electronic marketplaces. Broadly, the electronic marketplace is deemed to be the supplier for GST purposes and is required to return GST on those supplies. Where accommodation services are provided through an electronic marketplace and involve a ‘listing intermediary’, the listing intermediary may be required to return GST. Underlying suppliers can opt-out of these rules where certain conditions are met. Underlying suppliers who are GST registered may continue to claim GST on their costs. Underlying suppliers who are not GST registered and who choose not to voluntarily register receive a credit from the electronic marketplace for 8.5% of the value of the supply.Other taxesNew Zealand operates a no-fault, Accident Compensation Corporation (ACC) scheme for accidental injuries. ACC compensation is funded by levies imposed on employers and employees. The ACC scheme is governed by the Accident Compensation Act 2001 which prohibits legal claims for compensation arising out of personal injury.Employers must deduct pay-as-you-earn (PAYE) from PAYE income payments (ie salary or wages) paid to employees and certain payments made to independent contractors. PAYE is deducted on account of the employee’s final tax liability for an income year.Fringe benefit tax (FBT) is payable by employers who provide non-cash benefits provided to employees. A fringe benefit may include company vehicles, low-interest loans and subsidised goods or any other benefit of any kind received by an employee (subject to certain limited exceptions). Employers will generally pay FBT and file FBT returns on a quarterly basis (in certain circumstances, an employer may elect to pay FBT and file FBT returns on an annual basis). Various exemptions to the FBT regime may apply, for example, a vehicle that is specifically used for work purposes where personal use is incidental or certain benefits (such as food and drink) provided on the employer’s premises. Contributions made by an employer to most superannuation schemes will be deductible to the employer but subject to employer superannuation contribution tax (ESCT) at rates between 10.5% and 39%, depending on the employee’s annual salary or wages.There is no stamp duty, transfer taxes, transaction taxes or other similar duties or taxes in New Zealand.Regulatory complianceOverseas Investment lawsForeign investment in New Zealand is regulated by the Overseas Investment Act 2005 (OIA) and the Overseas Investment Regulations 2005 (OIR). In broad terms, the OIA enables the Overseas Investment Office (OIO) to review overseas investment proposals to ensure they meet particular standards. The OIO can block proposals that do not meet these standards and can impose conditions on acquisitions by overseas investors. The OIO is responsible for monitoring compliance with any conditions of a consent granted under the OIA.There are two alternative approval regimes pursuant to the OIA and OIR: the ‘consent’ regime and the National Security and Public Order (NSPO) ‘call-in’ regime. In brief, the consent regime requires that an overseas person obtains consent from the OIO if it proposes to acquire, or acquires ‘control’ of sensitive land (which includes ‘residential’ and ‘lifestyle’ land), business assets exceeding certain monetary thresholds (ie ‘significant business assets’), or fishing quota in New Zealand. Control is generally associated with an overseas person obtaining more than a 25% ownership or controlling interest in a relevant asset or land. The consent regime is mandatory and suspensory.The NSPO regime may apply to an overseas investment that does not meet the consent thresholds but which involves a ‘strategically important business’ for the purposes of the regime. Notably, the level of investment which triggers the application of the NSPO regime is lower than that of the consent regime. In most cases, the NSPO regime may apply to AMU acquisition of an interest in a strategically important business (ie the ‘ownership and control’ threshold is effectively >0%). Where the investment concerns a media business, the call-in power would only apply when an overseas person intends to acquire a 25% or more ownership or control interest in the media business. For listed issuers the threshold is 10% or more. Filings pursuant to the NSPO regime may be mandatory or voluntary depending on the nature of the investment.The New Zealand Government is proposing major changes to New Zealand’s overseas investment regime as part of a broader strategy to promote overseas investment in New Zealand. The proposed reforms will streamline the OIO consent process for most investments, although the consent process for overseas investments in residential land, farmland and fishing quota will remain unchanged. Specifically, the proposed reforms include:•amending the OIA’s purpose statement to provide a more balanced framework which recognises that overseas investment generally provides benefits to New Zealand but also acknowledges that such investment can pose risks to New Zealand’s interests, which need to be managed under the regime•consolidating the OIA’s substantive tests (being the Investor Test and the Benefits to New Zealand Test) into a modified ‘National Interest Test’ as the primary test for all investments except for investments in residential land, farmland and fishing quota•granting the OIO the power to grant consent and impose conditions under the national interest test without involving the relevant Ministers •creating a new regulation-making power enabling regulations to specify new classes of screened transactions that must undergo a national interest assessment, and•amending the OIR to give the relevant Minister the power to designate new ‘strategically important businesses’ that do not currently fit within the existing categories, potentially requiring these to be compulsorily notifiedThe Overseas Investment (National Interest Test and Other Matters) Amendment Bill 2025 is currently before Parliament and is expected to be passed into law by the end of 2025, with the new regime in force by early 2026.Competition (anti-trust) lawThe core principles of New Zealand’s competition law are similar to those of Australia, and in substantive effect similar to the principles operating in the United States, the UK and the EU. Broadly speaking, the Commerce Act 1986 (Commerce Act) aims to promote competition in New Zealand markets for the long-term benefit of consumers. It does this by:•prohibiting anti-competitive conduct and arrangements, including cartel conduct and misuses of market power•prohibiting mergers and acquisitions which ‘substantially lessen competition’ in a market, and•governing the imposition of price control on particular goods and servicesThe New Zealand Commerce Commission (NZCC) is responsible for administering and enforcing the Commerce Act. The NZCC may grant clearances for mergers or acquisitions where it is satisfied that the proposed acquisition would not have, or would not be likely to have, the effect of substantially lessening competition in a market. The NZCC may grant an authorisation, on public benefit grounds, for a proposed acquisition or for certain conduct that would otherwise result in a substantial lessening of competition.There are pecuniary penalties for breaching the business acquisition provisions in the Commerce Act. Individuals face a maximum penalty of NZD 500,000, while body corporates are liable to pay: the greater of NZD 10m, three times the commercial gain or 10% of New Zealand turnover. The Commerce Act also contains a declaration mechanism, allowing the NZCC to apply to the High Court for a declaration in instances where an overseas person acquires a controlling interest in a New Zealand body corporate through the acquisition outside of New Zealand of assets or shares. If a declaration is granted, the High Court may make an order requiring the New Zealand body corporate to:•cease carrying out business in New Zealand in the market to which the declaration relates, no later than six months after the date of the declaration (or any longer period specified by the court)•dispose of shares or other assets specified by the court, or•take any other action that the court considers is consistent with the purpose of the Commerce ActThe Commerce Act contains a broad prohibition on contracts, arrangements or understandings which have the purpose, effect, or likely effect of substantially lessening competition in a market. It is also illegal for a person with substantial market power to engage in conduct which has the purpose, or has or is likely to have the effect, of substantially lessening competition in a market. Generally, a firm will have a substantial degree of power in a market if it can operate relatively independently of market forces. All other things being equal, the larger the sustained share of the market held by a firm, the more likely it is that the firm will have a substantial degree of market power. Prior to 5 April 2023, the Commerce Act contained three limited exceptions for certain conduct in relation to statutory IP. These exemptions have now been removed meaning it is necessary for rights holders to assess whether existing or proposed agreements (or conduct) concerning IP comply with the Commerce Act.Under the Commerce Act, it is a criminal offence for a person to enter into, give effect to, or intend to give effect to, an arrangement that contains a ‘cartel provision’ (a provision that has the purpose, effect, or likely effect of price fixing, restricting the output of goods or service in New Zealand or, allocating the market for a good or service between the parties to the arrangement) unless an exception applies. There are exceptions to the ‘cartel provisions’ for:•collaborative activities•vertical supply contracts, and•joint buying and promotionThe NZCC can elect to file civil or criminal proceedings against any person alleged to have entered into, given effect to, or intended to give effect to, a cartel arrangement. The NZCC can give clearance to certain contracts, agreements, understandings or covenants that contain cartel provisions subject to certain guidelines.The pecuniary penalties for breaching the restrictive trade practices provisions of the Commerce Act are aligned with those described above in respect of business acquisitions.The New Zealand Government has committed to undertake a substantial overhaul of New Zealand’s competition law regime. In September 2025, Cabinet papers were released offering insight into the proposed amendments. The changes, which are intended to become law in 2026, aim to provide greater certainty for businesses. They include:•the ability for the NZCC to accept behavioural undertakings from merging parties as a condition for merger clearance or authorisation•a new statutory notification regime allowing businesses to notify the NZCC of proposed collaborative conduct, which may breach the cartel prohibition, and to proceed unless the Commission objects•increased protections for confidential business information shared with the NZCC•enabling the NZCC to assess patterns of small business acquisitions over a three-year period, and to clarify the test used by the Commission to assess so-called ‘killer’ acquisitions, where dominant firms acquire innovative start-ups, and •introducing an objective economic test for ‘below-cost’ pricing to counter ‘predatory’ pricing practices, where dominant firms deliberately undercut prices to drive out competitorsAt the date of writing, no bill has yet been introduced to give effect to these proposals. However, the expectation is that the proposed amendments will be introduced to Parliament by the end of 2025. Consumer and small business protection lawThe protections in the Fair Trading Act 1986 (FTA), Consumer Guarantees Act 1993 (CGA) and the Credit Contracts and Consumer Finance Act 2003 (CCCFA) aim to protect consumers by:•prohibiting conduct that is likely to be misleading or deceptive. This prohibition is broad and includes not only the making of untrue claims or statements but also omitting to give all relevant details and failing to correct mistaken impressions•prohibiting unconscionable conduct in trade•prohibiting unsubstantiated representations and unfair contract terms in standard form consumer and small trade contracts•implying guarantees into sales contracts with consumers. The CGA implies into contracts of sale guarantees as to the quality and standard of goods and services. These guarantees cannot be excluded from transactions for consumer and services, other than where goods or services are acquired for commercial purposes, this is stated in the supply contract, and it is fair and reasonable to exclude the guarantees, and•requiring creditors who enter into consumer credit contracts to provide consumers with a written disclosure statement containing specific information about the terms of the contract. The CCCFA places restrictions on the means of applying interest and provides rules for fees, payments, credit-related insurance, repayment waivers and cancellation. Lenders must exercise the care diligence and skill of a responsible lender in all dealings with borrowers and guarantors, make reasonable inquiries, help borrowers and guarantors make informed decisions, act reasonably and ethically, and comply with the repossession rules. In addition, lenders must be registered on the Financial Service Providers Register and, subject to narrow exceptions, certified by the Commerce CommissionFinancial services regulationAnyone offering financial products in New Zealand must comply with the Financial Markets Conduct Act 2013 (FMCA). Unless an exclusion applies, this involves, among other things, preparing a Product Disclosure Statement (PDS) containing prescribed information, registering the PDS and all other required information on the online Disclose Register, and compliance with various governance and conduct obligations. The FMCA sets out a number of exclusions from these requirements. Some of the exclusions in the FMCA remove disclosure requirements altogether, and others set limited disclosure requirements. The FMCA also:•provides for licensing regimes for the following financial sector participants: fund managers of a registered scheme, financial advice service providers (in respect of a service provided to retail clients), certain supervisor trustees, providers of discretionary investment management services (in respect of a retail service), derivatives issuers (in respect of regulated offers to retail investors), financial institutions (banks, licensed insurers and licensed non-bank deposit takers in respect of services provided to consumers) and equity crowdfunding and peer-to-peer lending platforms•regulates securities exchanges•imposes fair dealing requirements in relation to financial products and financial services by prohibiting misleading or deceptive conduct, and false, misleading, or unsubstantiated representations•mandates a climate-related disclosure regime for climate reporting entities (being large listed issuers, large registered banks, large licensed insurers, large credit unions and building societies and large managers of registered managed investment schemes), and•provides for a mutual-recognition regime between Australia and New Zealand which enables an issuer in Australia or New Zealand to offer certain financial products in both countries using one disclosure document prepared under regulation in the issuer’s home countryLiability and enforcementAs in other jurisdictions, non-compliance with New Zealand’s financial services regulation laws can result in significant civil and criminal penalties. The FMCA imposes (among other things):•civil pecuniary penalties for making misleading statements in PDSs and advertisements of up to the greater of: (i) the consideration for the relevant transaction (if any); (ii) three times any gain made or loss avoided; or (iii) NZD 1m for an individual or NZD 5m for companies•a system of escalating liability from infringement notices for minor breaches through to criminal penalties of up to ten years' imprisonment and fines of up to NZD 1m for individuals and NZD 5m for companies for the most egregious conduct, and •a maximum ten-year prohibition period by the Financial Markets Authority (FMA) or the Registrar of a person from managing or being a director of an entity and/or providing financial advice services or client money or property services. In serious cases, the High Court may impose orders for an indefinite period Conduct of Financial InstitutionsThe New Zealand Government has made it clear that ensuring financial institutions’ conduct and culture result in good outcomes for all customers is a priority. A new conduct of financial institutions (CoFI) regime came into force in March 2025 and applies to registered banks, licensed insurers and licensed non-bank deposit takers (Financial Institutions). Under the CoFI regime, Financial Institutions are required to:•be licensed by the FMA in respect of their conduct towards consumers•comply with the ‘fair conduct principle’ when providing relevant services to consumers, and establish and maintain effective fair conduct programmes that meet the minimum requirements to enable such compliance•take all reasonable steps to comply with their fair conduct programme (which includes regularly reviewing whether their distribution methods operate consistently with the fair conduct principle), and•comply with regulations that ban target-based sales incentives. Intermediaries must also comply with those regulationsThe New Zealand Government has proposed amending the minimum requirements for fair conduct programmes. Any changes are unlikely to take effect until 2026.Climate-related disclosuresThe FMCA provides for a mandatory climate-related disclosures regime, which applies to climate reporting entities, being large listed issuers, large registered banks, large licensed insurers, large credit unions and building societies and large managers of registered managed investment schemes (CREs). CREs are required to prepare climate statements, obtain an assurance engagement in relation to statements to the extent the statements are required to disclose greenhouse gas emissions and lodge copies of climate statements with the Registrar of Financial Service Providers within four months after the entity’s balance date. In October 2025, the New Zealand Government announced changes to the climate-related disclosures regime to raise the reporting threshold for listed-issuers from NZD 60m to NZD 1b, remove managers of registered managed investment schemes from the regime and adjust the director and company liability settings. These changes will be included in the Financial Markets Conduct Amendment Bill (FMC Bill) (see below).Upcoming FMCA reformThe FMC Bill, if passed into law in its current form, will also require prospective purchasers or investors to obtain approval from the FMA prior to obtaining significant influence (defined as obtaining 25% of voting rights or the right to appoint 50% of directors) over an FMCA market services licence holder or an authorised body. It will also require an FMCA market services licence holder or an authorised body to obtain the approval of the FMA before entering into a significant transaction (asset sale) of all or a material part of the business or an amalgamation. The regime will apply slightly differently to overseas persons that hold an FMCA market services licence (overseas licensee) or are an authorised body (overseas authorised body). A change of control of an overseas licensee or overseas authorised body will require notification to the FMA but not approval. However, FMA approval would be required if an overseas licensee or overseas authorised body was to sell all or a material part of its New Zealand business. Approval would also be required if an overseas licensee or an overseas authorised body proposes to acquire all or part of a New Zealand business that will be a material part of its New Zealand business after completion or amalgamates with another person.The FMC Bill also proposes to introduce a single licensing obligation to replace the current multilayered licensing framework for market service providers under the FMCA. This change would consolidate multiple existing licences into one, simplifying the regime.The FMC Bill passed its first reading in May 2025. The proposed amendments are not expected to be enacted or come into force until 2026 at the earliest. Australian mutual recognition arrangementsPart 9 of the Financial Markets Conduct Regulations 2014 provides for a mutual recognition scheme between New Zealand and Australia. This scheme allows issuers to extend offers of certain financial products in their trans-Tasman counterpart country without needing to prepare a separate offer document under the other country’s laws. Certain minor procedural requirements must be met to rely on the mutual recognition scheme.Financial Service Providers Register Under the Financial Service Providers (Registration and Dispute Resolution) Act 2008 (FSP Act), financial service providers must register on the online Financial Service Providers Register, and those who provide financial services to retail clients in New Zealand must be a member of an approved dispute resolution scheme. Registration is required if a person is in the business of 'providing a financial service' (whether or not the business is the principal or only business) and:•the financial services are provided to persons in New Zealand (either by or on behalf of the financial service provider). This does not apply: merely because the financial services are accessible by persons in New Zealand; if the extent to which you provide financial services does not meet the prescribed thresholds; or if you do not have a place of business in New Zealand and do not provide services to retail clients in New Zealand, or•the person is required to be a licensed provider under a licensing enactment in New Zealand, or•the person is required to be registered under the FSPA by or under any other enactment, or•the person is a reporting entity to which the AML/CFT Act applies.Some entities are exempt from compliance with the FSP Act (e.g. non-profit organisations providing free financial services, lawyers, qualified statutory accountants and real estate agents).AML/CFT Act‘Reporting entities’ have obligations under the AML/CFT Act. A reporting entity is any entity that is a casino, a financial institution, a designated non-financial business or profession, a high-value dealer or TAB NZ. A designated non-financial business or profession includes law firms, conveyancers, incorporated conveyancing firms, accounting practices, real estate agents and other entities providing certain trust and company services. Although the AML/CFT Act does not contain any territorial provisions, it is likely to apply to non-resident entities that are actively and directly advertising or soliciting business from persons in New Zealand to such an extent that the entity is carrying on business in New Zealand. Protecting key assets and employeesIntellectual propertyNew Zealand provides comprehensive protection through both registered and unregistered intellectual property rights in alignment with the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and various international conventions. Key IP rights and similar protection in New Zealand include patents, confidential information, registered trade marks, the FTA and passing off for unregistered trade marks and get up, copyright, registered designs, layout designs (the 3D layout of an integrated circuit), moral rights, performer’s rights and plant variety rights.Trade marksNew Zealand protects trade marks through registration under the Trade Marks Act 2002, the FTA and the laws of passing off. A registered trade mark can be a sign, logo, colour, smell, taste, sound, or shape (provided that it can be represented graphically), which is used by a business to identify and distinguish its goods or services from those of others in the market.The registration of a trade mark under the Trade Marks Act 2002 gives the owner exclusive rights to that trade mark for specified goods and/or services with protection extending to similar marks and similar goods and services, and even wider protection for well-known marks. For a trade mark to be registered, it must have a distinctive character (including through acquired distinctiveness in the market from use and reputation over time) and it must not be confusingly or deceptively similar to any previously registered or unregistered trade mark used or registered for the same or similar goods or services, with extended protection available for well-known marks. If consent to registration is obtained from the proprietor of another registered mark, the registrar must register the mark (subject to any other issues that might prevent registration being overcome).The registered protection period is ten years from the date of registration. Registrations can be renewed for further periods of ten years with a grace period for renewal of six months following the expiry date. Registrations are vulnerable to removal for non-use if there is a continuous period of non-use for three years or more post-registration.Unregistered brands can be protected through the FTA and the tort of passing off if there is a misrepresentation and deception or confusion arising from use or the likelihood of it. Copyright also protects logos, some product designs and some slogans and strap lines. It is generally important that brands and trading names are cleared for use to ensure they do not infringe the registered or unregistered rights of a third party, and, where possible, trade marks are registered. Registering a trade mark provides a defence to a claim of infringement of another registered trade mark (but not to claims under the FTA or passing off).PatentsNew Zealand law relating to patents is governed by the Patents Act 2013 (although the Patents Act 1953 continues to apply to patent applications made before 13 September 2014). A patent is a monopoly right giving exclusive rights to exploit an invention for a period of 20 years (provided renewal payments are made) from filing the complete specification. A patent application can be filed with a provisional (followed by a complete) specification or a complete specification. A patentable invention (subject to some specifically excluded inventions) must:•be an appropriate ‘manner of manufacture’•involve an inventive step when compared to the prior art base that is ‘non-obvious’•be new or novel, and•be usefulA patent application can also be filed in New Zealand for protection overseas through the Patent Cooperation Treaty (PCT). Under the PCT system, a patent application can be made that designates other countries that participate in the PCT. This application will simultaneously seek protection for the invention in each of the designated countries.CopyrightCopyright protects the expression of ideas, not the ideas themselves. It is the exclusive right to reproduce or to otherwise deal with original literary, artistic, dramatic, or musical works, together with other protected subject matter, such as films, sound recordings, and computer programs. It is governed by the Copyright Act 1994 and registration of copyright in New Zealand is not possible. Copyright arises automatically on the creation of a qualifying work if relevant parameters are met.For copyright to exist, the product/object in question must fall into a category of work under the Copyright Act 1994 and be original. In order for a work to be original, there must have been a sufficient exercise of skill, judgment and labour put into the work. Generally, the original copyright in a work will be owned by the person who actually performs or creates the work. Exceptions include where a contract is used to change the default ownership position, work produced in the normal course of employment and for some works produced under commission.New Zealand’s copyright regime is unusual, in that protection is extended to industrially applied designs, although the term of this copyright is generally limited to 16 years. For other works, copyright generally subsists for 50 years following the death of the author/creator of the work. For films, sound recordings and broadcasts, the 50-year term runs from the end of the year the work is made or, if made available to the public, from the end of the year it is made available to the public. Free trade agreements with the United Kingdom and the European Union include commitments to extend certain terms to 70 years, however New Zealand law will not change until legislation is passed effecting this change.New Zealand adheres to a range of international conventions, including the Berne Convention, providing reciprocal copyright protection with other member countries.The Copyright Act 1994 has been under review since 2018 and the review is currently paused at the public consultation stage, but the New Zealand Government intends to consult publicly on potential options for change to the copyright regime and seek further feedback on objectives through the next public consultation process.Plant variety rightsPlant varieties, which are governed by the Plant Variety Rights Act 2022 (PVR Act), are an important intellectual property right in an agricultural country like New Zealand. A grant of plant variety rights may only be made if the Commissioner of Plant Variety Rights is satisfied that the plant variety is novel, distinct, uniform and stable. The (post grant) duration of protection for a woody plant variety is 25 years and 20 years for a non-woody plant variety, with a regime for protection through a provisional right equivalent to a granted right—if the grant does not eventuate the provisional right is void.Plant variety rights give:•the exclusive right to produce for sale/sell reproductive material, and•for vegetatively propagated fruit/vegetable producing plants, the exclusive right to propagate for commercial production of flowers/fruitThe PVR Act has amended and modernised plant variety legislation so that:•it is compliant with New Zealand’s international obligations under the CPTPP in relation to the 1991 version of the International Convention for the Protection of New Varieties of Plants (UPOV 91)•it is consistent with the Treaty of Waitangi (by instituting a Māori Plant Varieties Committee and imposing new disclosure requirements on breeders when working with indigenous plant species), and•other commercial concerns are dealt with including amendment to the compulsory licensing framework by repealing a prior exclusion relating to certain ‘sell-back’ licensing arrangements when assessing reasonable availability. These sell-back conditions in licenses are necessary to establish the confidence to make significant long-term investments in innovation. The PVR Act features a public interest test to, in the Ministry of Business, Innovation and Employment’s words, ‘reflect the need for reasonable quantities of material being available to the market, while also continuing to incentivise innovation’Registered designsNew and original features of shape, configuration, pattern, or ornament, as they are applied to an article, may be registered under the Designs Act 1953. Design registration gives the owner the exclusive right to use that design in New Zealand. ‘Use’ of the design includes making, importing/selling, or hiring the article to which the design has been applied, and licensing out the design. Registered protection is for an initial period of five years, renewable for two additional five-year periods, giving a possible total protection period of 15 years.To be registrable in New Zealand, a design must have ‘local novelty’, meaning that the design must not have been published or publicly used in New Zealand before the date of the application.Restraint of trade clauses/restrictive covenantsAn employer may attempt to restrict the ability of former employees to compete with the employer’s business by use of a restrictive covenant (restraint of trade) clause. Such restrictions are prima facie void on public policy grounds, and it is for the employer to show that a post-employment restraint is reasonable in the circumstances to protect a trade secret, confidential information, or some other proprietary interest. A court may decline to enforce a restraint it deems unreasonable or a court may modify a restraint to render it reasonable and enforceable.Restrictive covenants are often included in commercial agreements involving the sale of a business (where such a clause is normally given in return for payment for the goodwill in the business), or licence/franchise operations. While these clauses are treated by the courts as being contrary to public policy, a more liberal approach is taken compared with restraints that apply to employees on the basis that these are freely negotiated by more equal parties at arm’s length from each other. Restrictive covenants in this context are more likely to be upheld and enforceable.Commerce Act 1986As noted in the Competition (anti-trust) law section above, from 2023, it is necessary for IP rights holders to assess whether existing or proposed agreements (or conduct) comply with the Commerce Act.Useful links•Commerce Commission•Companies Office•Department of Internal Affairs•Employment Relations Authority•Financial Markets Authority•Immigration New Zealand•Inland Revenue Department•Intellectual Property Office•New Zealand Law Society•Ministry of Business, Innovation and Employment•New Zealand Trade and Enterprise•NZX