New Zealand is the easiest place in the world to do business, according to the World Bank's new Doing Business 2020 report, which looks at the simplicity of setting up, operating, and paying taxes in 190 territories around the world.
Specifically, the report grades territories according to the rules affecting a business from inception through operation to wind-down: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts, and resolving insolvency.
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Why New Zealand?
In its individual report, New Zealand was said to have the world's most streamlined processes for starting a business and getting credit, ranking first in each. It featured in the top-10 countries for the simplicity of registering a property (2nd), dealing with construction permits (7th), and paying taxes (9th). It was ranked 3rd for the way the country ensures the protection of minority investors and 23rd on the enforcement of contracts. It fared less well regarding resolving insolvency (36th) and setting up electricity contracts during inception (48th).
The New Zealand Government has consistently said it wants to maintain a simple, low-tax, broad-base tax system. In a recent example of its efforts to simplify tax compliance, from 1st October New Zealand's Inland Revenue began offering to SMEs and individuals a simplified tax ruling process that is shorter and cheaper.
The so-called short-process ruling service enables those taxpayers whose annual gross income is $20m ($12.5m USD) or less to get certainty on how tax law applies to their circumstances, in the form of a binding ruling from the tax agency. The ruling process will be available only where the tax at issue is less than $1m a year.
The Inland Revenue anticipates that short-process rulings will take about six weeks to process. More time may be needed for more complex issues, the agency said.
We Can Help
Pearse Trust has the expertise to provide you with a range of services to support setting up your business or expanding into New Zealand. From our office in Wellington we can tailor a cost efficient package based on any outsourced services that your business requires.