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New Zealand OverviewNick Arathimos
Investment New Zealand
Investment New Zealand
What is Investment New Zealand?
New Zealand’s investment promotion agency
A division of Trade NZ
Facilitates foreign direct investment (FDI)
“We give you the inside running”
New Zealand - Key Facts
Population - 3.8 million
Land area - 271,000 sq. km
(about the same size as UK or Japan)
Currency 1 NZ$ = 43 cents USD
1 NZ$ = HK$3.40
New Zealand Economy
Deregulated
Prices are market driven rather than determined by the government
Free movement of money in & out of NZ
Deregulated employment market
More than farming
Business in NZ
Transparency in business processes
Efficient, open & honest bureaucracy
Just do it attitude
Simple low tax structure
Economic growth combined with low inflation
Democratic
Percentage Contribution to GDP by Economic Activity
Manufacturing 18.2%
Tourism 15.9%
Finance 14.7%
Transport 8.4%
Mining 8%
Software 7.2%
Agriculture and Fishing 5.8%
GDP GrowthGDP Growth
0.3
2
6.5
5
3.1 3.2
1
33.5
4
0
1
2
3
4
5
6
7
8
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
What’s NZ like for Business ?
8 Universities, 20 + Polytechnics
8 Crown Research Institutes
Professional and skilled workers
Competitive costs – c30% lower than Australia
Robust, modern infrastructure
EXPORT = LIFE
Exports USD 10 billion = 30 % g.d.p
Free Market with Australia = 23 million
Singapore on board
Hong Kong under negotiation
USA, Chile, ASEAN?
Where Do The $’s Come From?
Visible Exports
Dairy, Meat, Wood and Wool - 65%
Added Value Manufacturing - 25%
Invisible Exports
Tourism, Software and Consultancy
Big Four Global Markets
Australia
USA
UK
Japan
Taxation in NZ
Main taxes are Income Tax and Goods and Services Tax (GST)
Personal Tax Rates:
15% on income NZ$0- $9,500
21% on NZ $9500- $38,000
33% on income NZ$ 38,000- $60,000
39% above NZ$60,000
GST applies at a uniform rate of 12.5%
Company Tax 33%
IT Industry in NZ
NZ IT Valued at $9.5 billion
Approximately 50,000 employed in IT
4,500 IT students in NZ Universities
1,500 graduates annually
40% increase in graduates since 1998
Trend encouraged by Government
Software Services and Exports
77 61
41
61
74
39
89
79
120
105
181
0
50
100
150
200
250
300
350
NZ$ Millions
1994 1996 1998
Computer &Education ServicesSoftware
New Zealand - Ideal Test Market
Cost-effective testing
Scaleable demographics
Sophisticated market of early adopters
A season ahead of the Northern Hemisphere
Fertile Biotechnology Environment
Relatively disease free animal health status
New Zealand - the premier location for producing human pharmaceuticals through farm animals
High quality and cost competitive Government and university research facilities
A science community with strong international linkages
Research focuses on both agbiotech and human health
Fertile Biotechnology Environment
Biological sciences are a strength of New Zealand tertiary education sector
New Zealand produces more graduates in biology than any other science discipline
New Zealand has a deep resource of people with intellectual capital in the biological sciences
Back Office Processing (SSC)
New Zealand represents a cost effective location compared to other Western countries for both labour and infrastructure costs
New Zealand has international and national telecommunications infrastructure to undertake cross border back office processing operations
New Zealand employees are customer service centric
New Zealand provides a 24x7 work force
Back Office Processing (SSC)Total annual operating costs for a 100 person, transaction processing back office facility, percentage cost saving in Auckland compared to Australian and US locations
0
10
20
30
40
50
Location
Per
cen
tag
e
Investment Overview
New Zealand welcomes investment from international companies
Seeks to build on and complement the relationship with it’s trading partners
Ease of Starting a New Business
0.00.0 1.01.0 2.02.0 3.03.0 4.04.0 5.05.0 6.06.0 7.07.0ItalyItaly
JapanJapanGermanyGermany
FranceFranceDenmarkDenmark
SwedenSwedenAustraliaAustralia
IrelandIrelandNetherlandsNetherlands
BritainBritainFinlandFinlandCanadaCanada
New ZealandNew ZealandUnited StatesUnited States
Source: The Economist October 1999Source: The Economist October 1999
Venture Capital
High business birth rate - 22.7 %
96 % of companies employ less than 20 people
Deal flow = 400 for first 5 months 2001
Less than 5 % invested
Venture Capital
Returns = 25 - 40% p.a.
No capital gains tax
NZD 500 m – 1 b invested + same available
= 0.8 % of private capital investment (US 2.4%)
Opportunities
Funding and management collaborations
Client / investee company synergies, e.g: Wireless communications and the Internet 3D imaging and computer animation Genetics and biopharmaceuticals High tech niche manufacturing
