Doing Business In... 2026 Comparisons

New Zealand is a common law jurisdiction. Its legal framework developed from English law, with judicial decisions playing an important role in the development and interpretation of the law alongside legislation enacted by Parliament. New Zealand does not have a single written constitutional document. Instead, its framework draws on a combination of statutes, constitutional conventions, judicial decisions and important constitutional documents, including the Constitution Act 1986, the New Zealand Bill of Rights Act 1990, and the Treaty of Waitangi, which together provide a framework for representative democracy. This framework provides flexibility while maintaining legal certainty and stability.

Organisation of the Judicial Order

The court hierarchy comprises four principal tiers.

• The District Court is the court of first instance for most criminal prosecutions and civil disputes up to NZD350,000. It also exercises jurisdiction over family and youth matters through its Family Court and Youth Court divisions.
• The High Court has unlimited civil jurisdiction and hears cases involving claims that exceed the District Court’s jurisdictional threshold. It also has exclusive first instance jurisdiction over certain matters, including judicial review proceedings, serious criminal trials and various statutory matters, and hears appeals from the District Court.
• The Court of Appeal serves as the intermediate appellate court, hearing appeals from the High Court and, in certain circumstances, from specialist courts and tribunals. Most cases conclude at this level, and further appeal requires leave.
• The Supreme Court is the highest court in New Zealand, and serves as the final appellate authority. It focuses on cases of national significance, substantial miscarriages of justice or significant legal interpretations. Leave to appeal is required and is not granted merely to correct error.

Specialist Courts and Tribunals

In addition to these general courts, New Zealand has several specialised courts and tribunals that deal with specific categories of dispute, to ensure that disputes in particular areas are determined by decision-makers with the relevant expertise. These include:

• the Employment Relations Authority and Employment Court for employment-related disputes;
• the Environment Court for matters related to the Resource Management Act;
• the Māori Land Court, which has jurisdiction over matters relating to Māori land;
• the Waitangi Tribunal, which investigates claims by Māori that Crown actions or omissions are inconsistent with the principles of the Treaty of Waitangi;
• the Taxation Review Authority for tax disputes; and
• the Family Court, which deals with a broad range of family law matters including care of children, adoption, domestic violence, relationship property and care of vulnerable adults.

Judicial Independence

The judiciary functions as an independent branch of government responsible for interpreting and applying the law. Judges are appointed based on their legal expertise and experience, and the system is designed to insulate judicial decision-making from political influence. The principle of judicial independence is regarded as being fundamental to the rule of law, protecting individual rights and maintaining public confidence in the administration of justice.

The Overseas Investment Framework

New Zealand’s foreign investment framework is governed by the Overseas Investment Act 2005 (OIA) and the associated Overseas Investment Regulations 2005, which aim to ensure that overseas investment benefits the country while protecting sensitive assets, such as land and strategic businesses. The Overseas Investment Office (OIO) administers the regime, overseeing applications for investments that meet the criteria set out in the OIA, with applications decided by the OIO and final approval sometimes made by the relevant Government Ministers.

Investments Requiring Consent

Consent is generally required for investments involving an “overseas person” in the following categories.

• For significant business assets: where the acquisition involves consideration or assets valued over NZD100 million. Investors from countries covered by the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) or from Australia may benefit from higher thresholds, reflecting New Zealand’s commitment to facilitating trade relationships.
• Sensitive land: any acquisition of land classified as “sensitive” requires consent. This covers:
1. residential land;
2. land adjoining bodies of water (including coastal and marine areas and lakes);
3. land held for conservation purposes;
4. historical, cultural or heritage sites;
5. land associated with strategic infrastructure; and
6. rural land above a certain size threshold.
• Fishing quotas: overseas investors must obtain consent to acquire fishing quotas, to ensure sustainable management of New Zealand’s marine resources.

Separate to the consent regime, the government can exercise a “call-in” power to review certain transactions involving strategically important businesses, unless those transactions are pre-notified and cleared.

Criteria for Consent

Since March 2026, the primary consent pathway for most consent applications imposes a national interest risk assessment on the transaction. The OIO conducts an initial analysis to assess whether there may be a national interest risk and, if so, a more detailed assessment process is undertaken. If the OIO concludes that the transaction may be contrary to New Zealand’s national interest, the application is escalated to the Minister of Finance to determine. There are different consent pathways for investments in residential land and farm land, as noted below. For the notification and clearance regime involving strategically important businesses, the OIO or Minister will assess if the transaction results in any national security or public order risks.

Specific Land Types

Farm land must be advertised on the open market before a sale to an overseas person, unless exemptions apply. Overseas investors in farm land must satisfy an Investor Test (assessing character and capability) and the Benefit to New Zealand Test, under which they must show that the investment will deliver significant benefits, such as job creation, export growth or technological innovation. Acquisitions of residential land that is not otherwise sensitive may require meeting one of the following criteria:

• committing to reside in New Zealand;
• contributing to increased housing supply;
• using the land for non-residential purposes; or
• incidental residential use.

The Application Process

The OIO application process involves providing detailed information about the investor and the proposed investment. The application process can be complex, but investors who seek expert advice can generally navigate it successfully.

Processing Timeframes

Under the primary consent pathway, most applications will be determined within five to 15 working days of submission. If a full national interest assessment is required, a further 55 working day timeframe applies. For other types of consent application, the OIO has made significant improvements to its processing timeframes over the past couple of years, with average decision times of between four weeks and four months, depending on the consent pathway. However, for farm land acquisitions, consent applications should account for around five to six months’ processing time, and sometimes longer). Investors should factor these timeframes into their transaction planning to avoid being unable to complete within anticipated timelines.

Sanctions for Non-Compliance

The OIA establishes a mandatory consent regime. The notification regime for transactions involving strategically important businesses is mandatory in some circumstances. Completing a transaction that requires consent or notification and clearance without first obtaining the consent or clearance can expose investors to significant legal risk, including the potential for the relevant Ministers or the OIO to require unwinding of the transaction and impose fines. Investors who are uncertain whether their transaction requires consent or notification should seek specialist legal advice before completing any transaction.

National Interest

If the assessment of a transaction identifies a risk to New Zealand’s national interest, the OIO or Minister of Finance has broad discretion to impose conditions to manage that risk.

The Investor and Benefit to New Zealand Tests

Where the Investor Test applies, the OIO can grant consent even if certain disqualifying factors are present, provided it is satisfied that the investor remains suitable to own or control sensitive assets.

The OIO has broad discretion to impose conditions to manage disqualifying factors, plus standard conditions it will typically impose to ensure future issues are captured. For transactions where the Benefit Test applies, the investment must demonstrate substantial benefits, such as job creation, export growth, technology introduction or environmental protection. These commitments are assessed as part of the consent process and may be reflected in conditions attached to any approval granted. The nature and extent of required commitments will depend on the type of investment and the consent pathway under which the application is made.

Conditions on Consent

Where consent is granted conditionally, investors must satisfy any imposed conditions relating to, for example, ongoing employment levels, environmental stewardship or the purpose for which land is used; failure to comply with such conditions may result in enforcement action. Investors should engage early with the OIA process to understand and plan for any conditions that are likely to be imposed.

Challenging OIO Decisions

Where the OIO or the relevant Government Ministers decline to grant consent, investors may seek to challenge the decision through judicial review in the High Court. New Zealand’s administrative law framework permits affected parties to challenge government decisions on the basis that the decision-maker failed to follow correct procedures, applied the wrong legal test, or acted unlawfully.

Scope and Timing

Judicial review focuses on the legality of the decision-making process rather than the substantive merits of the decision, meaning the reviewing court considers whether the correct process was followed and the law correctly applied. Applicants considering a challenge must act promptly, as judicial review proceedings are subject to timing requirements. Specialist legal advice should be sought immediately upon receipt of an adverse OIO decision, to assess the grounds for challenge and the prospects of success.

Limited Liability Company

The most common business structure for foreign investors is the limited liability company, which provides a separate legal entity status and limits shareholders’ liability to their investment. At least one director must live in New Zealand or Australia (if they are also a director of an Australian company), and a minimum of one shareholder is required, with no residency requirements. The limited liability company is well suited to a broad range of purposes, from day-to-day trading operations to greenfield investments and holding structures.

Subsidiary and Branch

A subsidiary offers local incorporation, enhanced market credibility, and liability protection, though it involves higher compliance costs and more complex regulatory requirements. A branch provides lower operational costs and easier management integration with the parent company, but exposes the parent company to liabilities in New Zealand and requires consolidated financial reporting. The choice between a subsidiary and a branch will depend on the investor’s risk tolerance, tax position and operational preferences.

Limited Partnership and Joint Venture

A limited partnership offers pass-through taxation and limited liability for passive investors, though it requires clear agreements on partner roles and responsibilities. A joint venture provides resource sharing and flexibility tailored to specific projects, though it carries the risk of conflicts between partners, and robust agreements are necessary. Both structures are commonly used by overseas investors participating in specific projects or co-investing with local partners.

Registration Steps

New Zealand is renowned for its business-friendly environment, making the process of forming and registering a company relatively straightforward, though it involves several important steps and considerations, particularly for overseas investors.

The company registration process is user-friendly, with most steps completed online through the New Zealand Companies Office, as follows:

• reserve a company name through the Companies Office website (valid for 20 working days);
• submit information about directors, shareholders and the registered office; and
• upload the required documents, provide a physical address in New Zealand, and pay the registration fee.

If all details are correct, registration can be completed within a few hours.

Post-Registration Requirements

For tax purposes, the company will need an IRD number, and GST registration is required if its annual turnover will exceed NZD60,000. The IRD and GST registrations can be submitted as part of the incorporation process, but for overseas owned companies will only be processed once an AML-CFT reporting entity (such as a law firm or accountant) has completed KYC checks or the company has opened a bank account. Opening a bank account for a New Zealand company can be challenging for non-residents, as many banks require an in-person visit or a local director, and stringent anti-money laundering checks are also part of the process. Overseas investors should factor these practical steps into their planning timeline.

Core Compliance Obligations

After registration, companies must meet ongoing requirements, including:

• filing annual returns with the Companies Office;
• maintaining accurate financial records and meeting tax obligations;
• notifying the Companies Office of any changes to company information; and
• preparing audited financial statements for larger companies.

Companies whose turnover exceeds NZD33 million, or NZD11 million if they are a subsidiary of an overseas company, are required to file audited financial statements. These obligations are designed to maintain transparency and public accountability in the operation of New Zealand companies.

Tax Filing Obligations

GST returns must be filed regularly, either monthly, two-monthly or six-monthly, depending on the company’s annual turnover. Most individuals do not need to file tax returns where income is taxed at source through PAYE, but those with additional income must file an Individual Tax Return. Companies must also ensure that any changes to shareholding or control that engage the OIA are approved by the OIO.

One-Tier Board Structure

New Zealand companies typically operate under a one-tier board structure, in which the board of directors is responsible for governance and strategic oversight of the company. Day-to-day management may be delegated to officers and managers appointed by the board, but ultimate accountability for the company’s affairs rests with the directors. There is no mandatory two-tier supervisory structure as found in some civil law jurisdictions.

Director Residency Requirements

Overseas investors who do not have a resident director available should consider engaging a professional director or a corporate service provider to fulfil this role.

Limited Liability for Shareholders

The limited liability company structure provides a separate legal entity status and limits shareholders’ liability to their investment. This means that, in the event of the company’s insolvency or other adverse events, shareholders are not personally liable for the company’s debts or obligations beyond what they have invested. The limited liability company thus provides an important layer of protection for overseas investors participating in the New Zealand market.

Director and Officer Liability

Directors owe statutory duties to the company under the Companies Act 1993, including duties to:

• act in good faith and in the best interests of the company;
• exercise reasonable care, diligence and skill; and
• avoid reckless trading.

Where these duties are breached, directors may face personal liability in proceedings brought by the company or its liquidators. Significant fines can also apply for breaches of health and safety legislation, with penalties of up to NZD3 million for companies. Company directors may face personal liability, including fines and imprisonment, for failing to meet their health and safety obligations.

Piercing the Corporate Veil

New Zealand courts have the power to disregard the separate legal personality of a company, commonly described as “piercing the corporate veil”, in circumstances where the corporate structure is being used to perpetrate fraud, evade legal obligations or otherwise achieve an unlawful purpose. This is an exceptional remedy, applied narrowly by the courts. Investors should be aware that relying solely on the corporate form to shield against liability will not be effective where there is clear evidence of improper conduct.

Statutory Framework

New Zealand’s employment and health and safety framework is a combination of legislation and established case law, and is intended to protect workers’ rights, promote fair treatment and ensure safe workplaces. The key pieces of legislation are:

• the Employment Relations Act 2000;
• the Holidays Act 2003 (note that this Act is expected to be repealed and replaced in 2026); and
• the Health and Safety at Work Act 2015.

The Employment Relations Act 2000 is the cornerstone of New Zealand’s employment law, and sets out:

• a statutory duty of good faith – all parties in employment relationships must act honestly, openly and without misleading one another;
• minimum requirements for written employment agreements (individual and collective); and
• a personal grievance procedure – all employees who earn less than NZD200,000 per annum may access this procedure, which provides a mechanism to challenge dismissals or other actions the employee considers unjustifiable.

The Employment Relations Act 2000 applies to all employment relationships, including senior and executive roles. It excludes independent contractors, although courts or Inland Revenue may reclassify certain arrangements as employment if necessary.

Other Key Legislation

The Holidays Act 2003 provides for:

• four weeks of paid annual leave after 12 months of continuous service;
• 12 public holidays annually, with time-and-a-half pay for those who work on those days;
• ten days of paid sick leave per year after six months; and
• minimum entitlements to bereavement leave and family violence leave.

The Human Rights Act 1993 prohibits discrimination in employment based on personal characteristics such as age, race, sex, religious belief or disability, and promotes equal employment opportunities. There are also statutes dealing with minimum wage rates, wages protection (eg, prohibition on certain deductions from wages) and parental leave entitlements.

Case Law and Collective Bargaining

Case law plays an important role in interpreting employment rights and obligations, with the Employment Relations Authority and Employment Court developing New Zealand employment law through their decisions. In cases involving questions of law of public importance, cases may also be heard by the Court of Appeal and the Supreme Court.

Written Agreement Requirement

Employment agreements, whether individual or collective (negotiated by unions), must be in writing, and employers must keep signed copies. Employment agreements must comply with minimum statutory entitlements, and any terms that purport to undercut those minimum standards will be of no effect. The statutory duty of good faith applies to bargaining for employment agreements (individual and collective).

Fixed-Term and Ongoing Employment

Employment agreements can be for a fixed term or on an ongoing (indefinite) basis, but the Employment Relations Act 2000 provides specific safeguards to ensure that fixed-term arrangements are not used inappropriately to avoid protections afforded to permanent employees. Where a fixed-term agreement is used, there must be genuine reasons based on reasonable grounds for the fixed term. Employers cannot use fixed-term agreements simply to circumvent employees’ access to personal grievance rights or to assess suitability for employment.

Working Hours

Working time arrangements and overtime are generally agreed between employer and employee in the individual employment agreement, subject to compliance with minimum statutory entitlements. New Zealand does not impose a strict statutory maximum on working hours, though health and safety obligations require employers to ensure workloads do not compromise employees’ well-being.

Minimum Wage

The adult minimum wage remains at NZD23.95 per hour from 1 April 2026, with the starting-out and training minimum wage at NZD18.96 per hour. The Minimum Wage Act 1983 establishes the legal minimum wage, which is reviewed annually to reflect living costs.

Not an Employment at Will Jurisdiction

New Zealand is not an “employment at will” jurisdiction. Employees have significant legal protections against unjustified dismissal, and employers must follow both a substantively fair and procedurally fair process before terminating an employment relationship. Both parties are required to communicate openly, particularly where significant employment changes are proposed, such as redundancies and restructuring.

Personal Grievances

Employees may raise personal grievances within 90 days, except in cases of sexual harassment where the timeframe is extended to 12 months. Disputes are often resolved through mediation, with unresolved issues taken to the Employment Relations Authority. Remedies available to employees who succeed in a personal grievance claim include reinstatement, compensation for lost wages, and damages for humiliation and injury to feelings.

From February 2026, an income threshold applies to personal grievances, subject to a 12-month transitional arrangement. Employees paid over NZD200,000 will not be able to access the personal grievance procedure.

Collective Redundancies

Where collective redundancies are required, employers must consult in good faith with employees and, where applicable, their union representatives. This includes:

• providing affected employees with details of any proposal that may impact the continuation of their employment;
• proactively sharing relevant information;
• giving employees the opportunity to respond to the proposal; and
• genuinely considering employee feedback before finalising decisions.

There is no fixed statutory redundancy payment in New Zealand; entitlements will depend on what is agreed in the employment agreement or any applicable collective agreement.

Union Representation

Union membership is voluntary, but unions are required for negotiating collective agreements, and the right to strike is protected in specific conditions, particularly during collective bargaining. Employers must bargain in good faith with unions that have initiated bargaining on behalf of their members in the workplace. The Employment Relations Act 2000 sets out detailed requirements for collective bargaining. Good faith obligations apply regardless of whether or not there is formal union representation in the workplace.

The authors are grateful to Murray Brewer, Alejandro Ces and Simon Taylor of Grant Thornton for reviewing and providing expert input on the tax sections of this chapter.

Income Tax and PAYE

New Zealand’s tax system is overseen by the Inland Revenue Department (IRD), which administers tax laws and ensures compliance. The tax regime is generally straightforward, with relatively low rates and a focus on transparency. Individuals are taxed on a progressive scale depending on their annual income, with rates for 2026–2027 set to:

• 10.5% on income up to NZD15,600;
• 17.5% on income from NZD15,601 to NZD53,500;
• 30% on income from NZD53,501 to NZD78,100;
• 33% on income from NZD78,101 to NZD180,000; and
• 39% on income above NZD180,000.

Residents are taxed on their worldwide income, while non-residents are only taxed on New Zealand-sourced income.

Employer Payroll Obligations

Employers in New Zealand use the Pay as You Earn (PAYE) payroll tax system, with responsibilities including:

• deducting PAYE from employees’ pay;
• making KiwiSaver contributions for eligible employees;
• paying Accident Compensation Corporation (ACC) levies for workplace injury coverage; and
• making other deductions such as student loan repayments or child support if required by the IRD.

Fringe Benefit Tax (FBT) is levied on non-cash benefits provided to employees, such as company vehicles or subsidised loans.

Corporate Income Tax

A company is treated as tax-resident in New Zealand if it is incorporated there, or if its head office, centre of management or director control is located in New Zealand. Resident companies are taxed on their worldwide income, while non-resident companies are taxed only on income sourced from New Zealand. The corporate income tax rate is 28% on taxable income. New Zealand operates a full imputation system, which allows companies to attach tax credits to dividends paid to shareholders, reducing or eliminating double taxation of corporate profits.

Non-Resident Withholding Tax

Non-residents receiving passive income from New Zealand are subject to Non-Resident Withholding Tax (NRWT). The domestic rates are as follows:

• dividends: 30% (unfranked) or in many cases 0% (fully imputed with tax credits attached);
• interest: 15%; and
• royalties: 15%.

These rates are frequently reduced by New Zealand’s extensive network of double tax agreements. As an alternative to NRWT on interest, an approved issuer may pay a reduced 2% Approved Issuer Levy on interest paid on registered securities.

Transfer Taxes

New Zealand does not impose stamp duty or transfer taxes on the transfer of real property, shares or other assets.

Other Taxes

Employers are liable for Fringe Benefit Tax (FBT) on non-cash benefits provided to employees, with rates of up to 63.93% depending on the calculation method chosen. Customs and excise duties apply to the importation of certain goods, including alcohol, tobacco and fuel.

OECD Pillar Two

New Zealand has enacted comprehensive Pillar Two legislation through the Taxation (Annual Rates for 2023–24, Multinational Tax, and Remedial Matters) Act 2024. The Income Inclusion Rule applies for fiscal years beginning on or after 1 January 2025, while the Undertaxed Profits Rule and a Qualified Domestic Minimum Top-up Tax (QDMTT) apply from 1 January 2026. These rules ensure that large Multinational Enterprises (MNEs) with consolidated revenue of at least EUR750 million pay an effective tax rate of at least 15% in each jurisdiction where they operate.

As at the date of writing, New Zealand’s QDMTT has not yet been confirmed as having been granted safe harbour status on the OECD Inclusive Framework’s central record, though the assessment process remains ongoing.

Local taxpayers are responsible for registering MNEs subject to the Pillar Two rules, with registration required within six months of the first financial year in scope. For the initial cohort, this means registration should be completed by 30 June 2026 for MNEs with a 31 December 2025 year-end.

Research and Development Tax Credit

The principal tax incentive is the Research and Development Tax Incentive (RDTI), which provides a 15% tax credit on eligible R&D expenditure up to NZD120 million per annum. To qualify, a business must spend at least NZD50,000 on core R&D activities conducted using a systematic approach with a material purpose of resolving scientific or technological uncertainty, and with the intention of creating new knowledge or new or improved processes, services or goods. The claimant must carry on business through a fixed establishment in New Zealand. Unused credits may be carried forward, and refundability may be available for eligible companies meeting wage intensity criteria to the extent that the current year credit exceeds the current year tax liability.

Research and Development Loss Tax Credit

A separate Research and Development Loss Tax Credit (RDLTC) is available to non-listed entities in a tax loss position, whereby the loss can be “cashed-out” instead of being carried forward. There are various requirements for this, including the need to spend at least 20% of salaries on R&D, a cap of NZD560,000 and the intellectual property (IP) needing to be owned by the claimant. There are also various clawback events available, such as sale of the IP.

Investment Boost

Introduced in 2025, this incentive allows businesses an additional 20% deduction on the cost of new depreciable assets in the year the asset first becomes available for use. The asset must never previously have been used in New Zealand. Excluded assets include dwellings and fixed-life intangible property.

Loss Grouping

Companies within a group of companies with at least 66% common ownership may transfer tax losses between profitable and loss-making group members, reducing the overall tax burden of the corporate group.

Foreign Tax Credits

Resident companies deriving foreign-sourced income may claim a credit for foreign income tax paid, preventing double taxation and supporting international operations.

Tax Consolidation

New Zealand does not operate a full tax consolidation regime in the same way as Australia or the United States. However, eligible wholly-owned groups of New Zealand-resident companies may form a consolidated group under the Income Tax Act 2007, under which income, losses and tax credits are determined on a single-assessment basis and one nominated company files a group return.

Loss Grouping

Where full consolidation is not available or chosen, the loss grouping rules permit the transfer of losses between profitable and loss-making group members. Businesses structuring their New Zealand operations across multiple entities should obtain specialist tax advice to determine which approach best suits their circumstances.

Thin Capitalisation Rules

New Zealand applies thin capitalisation rules under subpart FE of the Income Tax Act 2007, to limit the deductibility of interest expenses where a New Zealand entity is excessively debt-funded relative to its worldwide group. The rules are designed to prevent multinational groups from artificially reducing their New Zealand taxable income by loading disproportionate levels of debt into their New Zealand operations and claiming large interest deductions.

Scope

The thin capitalisation rules apply to New Zealand entities that are controlled by a non-resident, are members of a wholly-owned group that includes a non-resident, or are New Zealand branches of non-resident companies. A de minimis exemption applies where the entity’s net interest deductions do not exceed NZD250,000.

How the Rules Work

Where the rules apply, interest deductions may be limited if the entity’s New Zealand debt exceeds permitted safe harbour thresholds calculated by reference to the entity’s worldwide group debt ratio. Excess interest is effectively treated as income, denying the deduction. Businesses with significant related-party debt should carefully consider these rules when structuring their New Zealand operations, and should seek specialist tax advice.

Restricted Transfer Pricing Rules

These rules apply where cross-border related-party borrowings reach NZD10 million or more during the year. In addition to standard transfer pricing, interest deductions may be limited based on borrower credit ratings or denied for features such as subordination or contingent interest.

New Zealand’s transfer pricing rules require cross-border transactions between associated persons to be conducted on an arm’s length basis, and are generally applied consistently with the OECD transfer pricing guidelines. Under certain circumstances, Inland Revenue has the ability to recharacterise or disregard a transaction where the OECD guidelines regarding non-recognition are met. Under local legislation, the onus of proof in connection with transfer pricing matters remains with taxpayers; therefore, businesses engaged in significant intra-group transactions should maintain contemporaneous documentation addressing the reasonableness of the arrangements under consideration from a local perspective to support their transfer pricing positions, as shortfall penalties may be imposed where adequate documentation has not been kept.

General Anti-Avoidance Rule

New Zealand has a broad general anti-avoidance rule that applies to any arrangement entered into for the purpose or effect of avoiding tax, regardless of its legal form. Where the rule applies, Inland Revenue has wide discretion to reconstruct the taxpayer’s income to counteract the tax advantage obtained. This is one of the most frequently litigated areas of New Zealand tax law.

Controlled Foreign Company Rules

The CFC rules in subpart EX of the Income Tax Act 2007 attribute certain types of income earned by foreign subsidiaries to their New Zealand-resident controllers. These rules prevent New Zealand residents from sheltering passive or highly mobile income in overseas entities located in low-tax jurisdictions. Where a New Zealand resident holds an income interest of 10% or more in a CFC, attributable income is taxed in New Zealand in the year it is earned, regardless of whether it has been distributed.

Together with the thin capitalisation and transfer pricing rules, the general anti-avoidance rule and the CFC regime form New Zealand’s broader framework for ensuring that international tax obligations are met and profits are not diverted from the New Zealand tax base.

Tariff Regime

New Zealand maintains a comparatively liberal tariff regime. Tariff duties are imposed under the Tariff Act 1988 and collected by the New Zealand Customs Service under the Customs and Excise Act 2018. The majority of goods enter New Zealand at a zero or very low rate of duty.

Residual tariffs of up to 10% apply to a limited range of goods, primarily in the textiles, clothing, footwear and carpet sectors. These are the only sectors where tariffs are specifically designed to provide ongoing protection to domestic manufacturers.

Preferential Trade Agreements

New Zealand has an extensive network of free trade agreements, including the CPTPP, RCEP, AANZFTA, PACER Plus, and bilateral agreements with countries including China, Australia, the Republic of Korea and the United Kingdom. Goods originating in preferential countries attract reduced or zero rates under the Preferential Tariff. An agreement with the European Union entered into force in May 2024.

Trade Remedies

Anti-dumping and countervailing duties may be imposed under the Trade (Anti-dumping and Countervailing Duties) Act 1988 where dumped or subsidised imports cause material injury to a domestic industry. Safeguard measures are available under the Trade (Safeguard Measures) Act 2014 where increased imports cause serious injury. The current global environment of escalating trade tensions, including retaliatory tariff measures between major trading blocs, has heightened awareness of these tools, though New Zealand has historically used trade remedies sparingly.

The Commerce Commission has regulatory oversight of mergers and acquisitions in New Zealand, and has the ability to issue clearances for proposed mergers and take regulatory enforcement action in respect of proposed or concluded mergers.

New Zealand does not have a mandatory notification regime, neither in respect of all transactions nor for transactions meeting specific criteria; rather, parties may voluntarily choose to seek clearance from the Commerce Commission. Clearance will be granted if the Commerce Commission is satisfied that the merger or acquisition is unlikely to have the effect of substantially lessening competition in the market. The Commission may also grant an authorisation in respect of a merger if it will be likely to substantially lessen competition but the public benefit is such that the Commission considers it should be permitted.

Clearance and authorisations remain effective for 12 months from the date issued.

If the parties to a transaction choose not to seek voluntary clearance or authorisation, they may be subject to court proceedings by the Commerce Commission or a third party. The court has the power to grant prohibitory injunctions or order damages, divestiture or pecuniary penalties where an acquisition would have the effect or likely effect of substantially lessening competition. Businesses should be aware that significant amendments to the merger control regime are expected following the anticipated passage of the Commerce (Promoting Competition and Other Matters) Amendment Bill in mid-2026.

The Commerce Commission operates a voluntary clearance process with the following stages and indicative timeframes, where available:

• pre-notification engagement with the Commerce Commission by the applicant;
• registration of clearance application;
• day five: Commerce Commission publishes “Statement of Preliminary Issues” and draft investigation timeline;
• day 30: Commerce Commission completes initial interviews and information gathering;
• day 40: Commerce Commission either issues Notice of Clearance or sends a “Statement of Issues”;
• applicant responds to Statement of Issues;
• Commerce Commission issues a “Statement of Unresolved Issues”; and
• final decision to issue either a Notice of Clearance or a Decline of Clearance.

The timeframes are indicative only and subject to extension by the Commerce Commission. This procedural framework is also expected to be subject to amendment following the passage of the Commerce (Promoting Competition and Other Matters) Amendment Bill, anticipated in mid-2026.

The Commerce Act 1986 contains prohibitions against “cartel provisions” – ie, provisions in a contract, arrangement, understanding or covenant that have the purpose, effect or likely effect of price fixing, restricting output and/or market allocation.

Conduct can be caught if any act or omission that forms part of that conduct takes place in New Zealand, including agreements formed outside New Zealand where that conduct affects a market in New Zealand.

A breach of the prohibition against agreeing to, requiring or giving effect to a cartel provision gives rise to a pecuniary penalty and criminal liability. In addition, cartel provisions are unenforceable.

The prohibition against cartel provisions has the following exceptions:

• where the parties to the provision are engaged in “collaborative activity” and the cartel provision is reasonably necessary for the purpose of that collaborative activity – a “collaborative activity” is an activity in trade that is not carried out for the dominant purpose of lessening competition between the parties;
• vertical supply contracts where the provision relates to the maximum price of resupply and does not have the dominant purpose of lessening competition; and
• price fixing provisions relating to:
1. the collective acquisition of goods or services;
2. advertising of the price of the resupply of goods or services collectively acquired;
3. collective price negotiation; or
4. the purchase and resupply of goods or services by an intermediary who is a party to the contract.

Businesses should note that the cartel regulation regime is also expected to be amended following the passage of the Commerce (Promoting Competition and Other Matters) Amendment Bill, anticipated in mid-2026.

Section 36 of the Commerce Act 1986 prohibits a person with a “substantial degree of power” in a market from engaging in conduct that has the purpose, or is likely to have the effect of, substantially lessening competition either in that market or in another market where that person, or an interconnected person, supplies or acquires goods.

The Act does not define when a person has a substantial degree of power in the market, but the requirement for a “substantial degree of power” is a lower threshold than “dominance” and was introduced to align the New Zealand regime with that in Australia.

Conduct can be caught if any act or omission that forms part of that conduct takes place in New Zealand, including conduct outside New Zealand where that conduct affects a market in New Zealand.

Pecuniary penalties may be ordered not only for breaching Section 36, but also for attempts to breach, and for aiding, abetting, counselling, procuring, being knowingly concerned in or being a party to a contravention.

The maximum penalty that may be ordered in respect of each contravention is NZD500,000 in the case of an individual, or the higher of the following for a body corporate:

• NZD10 million;
• three times the value of any commercial gain resulting from the contravention; or
• if the commercial gain cannot readily be ascertained, 10% of the turnover of the person and all its interconnected bodies corporate (if any) in each accounting period in which the contravention occurred.

Definition and Duration

New Zealand’s intellectual property laws protect the rights of creators, brand owners and innovators, aligning with international standards through agreements such as the TRIPS Agreement and obligations under the World Trade Organization. The Patents Act 2013 grants inventors the right to control the use of their inventions, with protection lasting for 20 years from the filing date.

Registration Requirements

To be patentable, an invention must be novel (it must be new) and must involve an inventive step (it must not be obvious to a skilled person in the field). Certain categories are excluded from patent protection, including methods of medical treatment for humans, diagnostic methods on humans, and inventions contrary to public order or morality. Embedded software that is integral to a technological innovation can be patented, and Swiss-type claims (the use of known substances for new medical treatments) are recognised for pharmaceuticals. Patents are registered through the Intellectual Property Office of New Zealand (IPONZ).

Enforcement and Remedies

Re-examination and opposition procedures allow third parties to challenge the validity of a granted patent. Enforcement of patent rights is pursued through the courts, with available remedies including injunctions to prevent ongoing infringement, damages, and an account of profits made from the infringing activity.

Definition and Duration

Under the Trade Marks Act 2002, a trade mark gives its owner exclusive rights to use a mark in connection with the goods or services for which it is registered. Registrable marks include distinctive words, logos, shapes, symbols, colours, sounds and smells, or combinations of these elements. Owners can prevent others from using confusingly similar marks in relation to the same or similar goods or services. Trade mark protection lasts for ten years and is renewable indefinitely.

Registration Process

Registration is through IPONZ. Trade marks incorporating Māori language or symbols are reviewed by a special committee to ensure that use of the mark would not be likely to offend Māori. The Madrid Protocol allows for the international registration of trade marks through a single application, facilitating global protection.

Enforcement and Remedies

Comparative advertising using registered trade marks is allowed if it does not unfairly damage the reputation of the mark, and anti-dilution provisions protect well-known trade marks from being used on unrelated goods or services. Enforcement is through the courts, with remedies including injunctions, damages and an account of profits. In New Zealand, registering a company name does not automatically confer the right to use it as a trade mark, and businesses should ensure their company name does not infringe on existing trade marks, to avoid legal conflicts.

Definition and Duration

The Designs Act 1953 protects new and original industrial designs that have visual appeal, such as shapes, patterns or ornamentation. Registered designs are protected for an initial five-year period, with the option to renew twice for additional five-year periods, giving a maximum protection period of 15 years. Registration is through IPONZ.

Enforcement

While copyright protects artistic works, registered design protection offers distinct legal advantages for enforcement and commercialisation. Enforcement of registered design rights is pursued through the courts, with remedies including injunctions and damages. Rights holders whose designs have been copied should act promptly to protect their position, as delays can complicate enforcement efforts.

Definition and Duration

The Copyright Act 1994 grants creators exclusive rights over their works, allowing them to:

• reproduce and distribute the work;
• publicly perform, show or communicate the work;
• create adaptations; and
• authorise any of these activities.

Copyright covers literary, dramatic, musical and artistic works, as well as sound recordings, films and broadcasts. Works must be original to qualify for protection. As a signatory to the Berne Convention, New Zealand does not require registration for copyright protection, which begins automatically upon creation. Literary, dramatic, musical and artistic works are protected for the life of the author plus 50 years; films, sound recordings and broadcasts for 50 years; typographical arrangements for 50 years; and industrially applied artistic works for 16 years, or 25 years for works of artistic craftsmanship. Moral rights (including the right to be recognised as the author and to prevent derogatory treatment of works) cannot be transferred.

Registration and Enforcement

No registration is required for copyright in New Zealand. Enforcement is through the courts, with remedies including injunctions, damages and an account of profits. The Copyright (Parody and Satire) Amendment Bill was introduced to Parliament in November 2024, containing a “fair dealing” exception to copyright infringement for parody and satire, which if passed will bring New Zealand’s law into line with the United Kingdom, United States and Australia.

Plant Variety Rights

The Plant Variety Rights Act 2022 grants breeders of new plant varieties exclusive rights over their varieties for a specified period, and is particularly relevant for New Zealand’s significant horticulture sector, including the kiwifruit, apple and wine industries.

Domain Names

Domain names can be registered in New Zealand, particularly regional ones like “.co.nz” or “.govt.nz” (restricted to government use). Courts have acted against cybersquatting in certain cases to protect businesses. The Domain Name Commission offers a dispute resolution service for conflicts over domain name registrations.

Software, Databases and Trade Secrets

Software constitutes a literary work under the Copyright Act 1994. Copyright will subsist in software on creation, provided the work is original, with no formal registration required. The same applies to databases. The original compilation may qualify for copyright protection as a literary work. Trade secrets are not governed by specific legislation in New Zealand. Protection can instead be achieved through the equitable law of confidence and contractual arrangements (including employment agreements, contractor agreements and other confidentiality obligations binding the relevant parties).

New Zealand’s Privacy Act 2020 governs the collection, disclosure and use of personal information, and applies to public and private sector “agencies”.

The Act is principles-based and regulates the full information life cycle through 13 Information Privacy Principles (IPPs), covering:

• the purpose and source of collection;
• transparency at collection;
• the collection of information from third parties;
• storage and security;
• access and correction rights;
• accuracy, retention, use and disclosure;
• overseas transfer; and
• use of unique identifiers.

The Act also contains a mandatory notifiable privacy breach regime. Agencies must notify the Privacy Commissioner and affected individuals where a privacy breach has caused serious harm, or is likely to do so.

The Privacy Commissioner may issue codes of practice, which form part of New Zealand’s data protection framework, and may modify the IPPs for particular sectors, activities or types of personal information.

The codes of practice that are currently in force are:

• Health Information Privacy Code 2020;
• Credit Reporting Privacy Code 2020;
• Telecommunications Information Privacy Code 2020;
• Biometric Processing Privacy Code 2025;
• Civil Defence National Emergencies (Information Sharing) Code 2020;
• Justice Sector Unique Identifier Code 2020; and
• Superannuation Schemes Unique Identifier Code 2020.

The Privacy Act has express extraterritorial application. It applies not only to New Zealand companies, but also to overseas companies that are “carrying on business” in New Zealand, regardless of where the personal information is or was collected or held by the overseas company.

A foreign company targeting New Zealand customers may therefore be required to comply with the Act if it is “carrying on business” in New Zealand in respect of personal information collected or held by the foreign company. “Carrying on business in New Zealand” is not defined in the Act, but a foreign company may be treated as “carrying on business in New Zealand” without necessarily:

• being a commercial operation;
• having a place of business in New Zealand;
• receiving any monetary payment for the supply of services; or
• intending to make a profit from its business in New Zealand.

When assessing whether the test is satisfied, the Privacy Commissioner would consider a range of factors, including whether the foreign company:

• offers goods or services to New Zealanders;
• has ongoing New Zealand-facing activities involving personal information on a repeated or systematic basis;
• operates through a NZ-facing website or app;
• has activities that are carried out in or have effect in New Zealand; or
• uses New Zealand domain names or trade marks (including where it holds relevant registrations).

Where the Act applies, the foreign company must comply with the IPPs or any code of practice that is applicable to either the relevant sector that the foreign company operates in or the type of personal information being collected. It must also appoint a privacy officer.

The Act also regulates international transfers of personal information. Under Information Privacy Principle 12, the New Zealand or foreign company (that is subject to the Privacy Act) may generally disclose personal information to an overseas recipient only if the recipient is subject to the Privacy Act, comparable privacy laws, a prescribed binding scheme or other comparable safeguards, such as contractual protections. Alternatively, the individual must authorise the overseas transfer after being expressly informed that the overseas recipient may not provide comparable protection to the Privacy Act.

The Office of the Privacy Commissioner

Data protection in New Zealand falls under the oversight of the Office of the Privacy Commissioner (OPC), which holds broad powers to promote and protect individual privacy rights. The Privacy Commissioner receives and investigates complaints from individuals who believe their personal information has been mishandled, and may also initiate its own investigations where systemic concerns are identified, without waiting for a complaint to be lodged. Where a serious breach is established, the Commissioner may refer the matter to the Director of Human Rights Proceedings (appointed under the Human Rights Act 1993), who has discretion to bring proceedings in the Human Rights Review Tribunal (an independent judicial body with the power to make binding orders and award compensation to affected individuals). Complainants may also apply directly to the Tribunal.

Rule-Making and Enforcement

A particularly significant aspect of the Commissioner’s authority is the power to issue binding privacy codes of practice under the Privacy Act 2020. These codes allow the OPC to extend and sharpen the Act’s baseline obligations in response to emerging risks. The Biometric Processing Privacy Code 2025, issued by the Commissioner and in force from 3 November 2025, demonstrates the OPC’s willingness to exercise this power proactively, including in response to emerging technologies. Non-compliance with the Act or an applicable code may result in investigation by the Commissioner, compliance notices, proceedings before the Human Rights Review Tribunal and, in some circumstances, statutory offences and financial penalties (including for company directors).

The Act also imposes mandatory notification obligations where a privacy breach has caused or is likely to cause serious harm, requiring affected organisations to notify both the Commissioner and affected individuals as soon as practicable. These mechanisms support the OPC’s ability to monitor compliance and respond to significant privacy incidents.

Educational and Advisory Role

Alongside its enforcement functions, the OPC performs an important educational and advisory role, including by issuing detailed guidance to assist organisations in understanding and meeting their obligations. Although the guidance does not have the force of law, it provides important insight into the Commissioner’s expectations regarding privacy governance and regulatory compliance. This function is particularly valuable for overseas investors establishing New Zealand operations who are unfamiliar with the local privacy framework.

Resource Management Reform

The government is currently progressing a comprehensive reform of New Zealand’s environmental law regime, replacing the Resource Management Act 1991 (RMA) with two new statutes. The Planning Bill regulates land use, development and subdivision, while the Natural Environment Bill regulates the use of natural resources and effects on the environment. The two Bills, once enacted, will replace the RMA in its entirety.

Both Bills were introduced to Parliament on 9 December 2025 and passed their First Reading on 16 December 2025. The Environment Select Committee has concluded hearing submissions on the Bill and is scheduled to release its report and recommendations to Parliament on 20 July 2026. The government is targeting enactment of both Bills in September 2026. A three to five-year transition period is anticipated. Investors in land development, infrastructure and primary industries should closely monitor the progress of these Bills and the transitional regime, as they are likely to materially change the resource consenting landscape in New Zealand.

Employment Law Changes

The Holidays Act 2003 is expected to be repealed and replaced by legislation that, if enacted in 2026, will come fully into force approximately two years after Royal Assent. The Employment Leave Bill is currently at Select Committee stage and proposes a simpler replacement, changing how annual leave, sick leave, family violence leave, bereavement leave and alternative leave will be earned, taken and paid. Businesses should begin reviewing their leave calculation systems and payroll processes now, as replacement legislation is likely to introduce new calculation methods and entitlements that will require operational changes.

Competition Law Reform

The Commerce (Promoting Competition and Other Matters) Amendment Bill is expected to be brought into force by mid-2026 and introduces a package of reforms modernising and strengthening New Zealand’s competition settings. The Bill addresses:

• complexity, cost and delays in supporting pro-competitive collaboration;
• limitations in enforcement tools; and
• gaps in the merger control framework.

Key changes include the following.

• Merger control: the Bill clarifies the substantial lessening of competition test to cover the creation, strengthening or entrenchment of market power, and allows the Commerce Commission to assess serial acquisitions. It introduces “call-in” and “hold-separate” powers, and sets new statutory timeframes for complex merger decisions.
• Collaborative conduct: a new statutory notification regime is introduced, enabling firms to notify the Commission and proceed with arrangements unless the Commission objects, along with streamlined cartel clearance provisions.
• Enforcement: the Bill strengthens enforcement by introducing corrective action orders for contraventions of Part 2 of the Commerce Act 1986.
• Predatory pricing: a new objective test for predatory pricing is introduced, removing the previous requirement to prove recoupment.
• Confidentiality and whistle-blowers: the Bill enhances protections for confidential information, and introduces whistle-blower protections.

Businesses involved in mergers and acquisitions, or that are party to collaborative arrangements with competitors, should monitor the progress of this Bill closely, as it may alter the thresholds, procedures and substantive rules that currently apply under the Commerce Act 1986.

Intellectual Property

The Copyright (Parody and Satire) Amendment Bill, introduced to Parliament in November 2024, proposes to introduce a “fair dealing” exception to copyright infringement for parody and satire. If passed, this will bring New Zealand’s copyright law into line with the approach taken in other countries, including Australia, the United States, Belgium, France, the Netherlands, Spain and Germany. Businesses and content creators operating in the media, advertising or entertainment sectors should be aware of this development and its potential implications for how their content and brand assets may be used by others.

Data Protection

The Biometric Processing Privacy Code 2025 came into force on 3 November 2025, introducing specific compliance obligations for organisations processing biometric information. Businesses with existing biometric systems have until 3 August 2026 to achieve full compliance – a deadline that is now imminent. Businesses should treat this deadline as an urgent priority and conduct a thorough compliance review of all biometric systems in use across their operations.