Tucked away in a corner of the southern hemisphere, New Zealand might seem a little out of the way for entrepreneurs looking to make a splash. But there are many reasons why the metropolitan city of Auckland is fast gaining a reputation as the next new place for startups to set up.
Thanks to its time zone, Auckland is one of the first cities to meet each new day. With Asia poised to shape global markets for the coming decades, Auckland holds a strategic position to help startups gain a competitive advantage. Its place in the Asia-Pacific means that Auckland companies enjoy overlapping workdays with key business cities such as Melbourne, Singapore, Beijing, and New Delhi.
This connection is further bolstered by full and free access to Australia, as well as 12 free trade agreements that expedite trade not just in Asia but also across the Pacific. These trade agreements with key players like Hong Kong, Malaysia, South Korea, and ASEAN as a whole enable streamlined processes, lower costs, and a more robust export economy.
In addition, a new digital economy partnership between New Zealand, Chile, and Singapore that entered into force in January 2021 is a step towards the future. It promotes the adoption of technology to facilitate trade including setting up paperless trading, expediting customs procedures, waiving duties for electronic transmissions, and supporting digital payments.
Best for Business
If you are thinking that the location advantages of Auckland can easily be duplicated in Australia, then here is something that is above compare: New Zealand’s ease of doing business. According to the World Bank, New Zealand ranks first in the world for ease of doing business, starting a business, and getting credit and legal rights for your work.
Indeed, New Zealand’s regulatory environment is extremely conducive to the startup and operation of businesses. Its economy is comparatively deregulated and decentralized, providing simplicity across the business, legal, regulatory, and tax sectors. Barriers to trade and investment are consistently being addressed in order to encourage economic growth.
The concrete differences are considerable. For example, employment health tax in New Zealand is 2 percent compared to 10 percent in Australia and superannuation is 3 percent compared to 9.5 percent. There is zero payroll tax, capital gains tax, or stamp duty, compared to a significant 30 percent capital gains tax in Australia. There is also little, if any, restriction on the transfer of capital or profits into and out of the country.
On top of this business-friendly environment, New Zealand boasts a politically stable climate with a strong legal and intellectual property protection framework. If its remarkable Covid-19 response was anything to go by, the New Zealand government’s ability to handle crises and react to challenges exudes confidence and security for investors.
Strong on Skills
Auckland ranks third in the world for the highest quality of living, the only country in the Asia-Pacific to make the top ten. Its vibrant and livable environment attracts a skilled and stable workforce from all over the world. The influx of new cultures and fresh ideas has created a diverse and creative population for the global city. For businesses, this translates to access to top talent and innovation.
The large and established Asian population in Auckland lends another advantage in communicating with key markets and managing offshore relationships. A third of the city’s residents are fluent in two languages or more—including Mandarin, Filipino, Bahasa Melayu, and Tamil—bringing with that unrivaled insights and connections.
Over 34 percent of Auckland adults are bachelor’s degree holders or higher, lending to an exceptionally highly-educated workforce. The three universities in the city, with their two additional satellite campuses, are ranked in the top three percent of universities internationally. Together with 170 research and development institutes, Auckland offers unlimited access to the best and brightest in a variety of sectors.
Despite its distance from the rest of the world, Auckland is globally connected by five international submarine data cables. This world-class infrastructure supports a burgeoning economy in digital entertainment and innovation. Big names such as Warner Bros, Disney, and Netflix are just some of the companies that make use of Auckland’s ultra-fast bandwidth and 5G coverage to create and deliver digital content across the globe.
Incubators such as Icehouse and ecentre provide Auckland startups with valuable access to expert advice, mentorship, and connections to investors and venture capital companies. Tech-focused startup community spaces like the Tech Bunker and the GridAKL campus, together with groups like Startup Grind Auckland, create a culture of innovation and collaboration and a strong support network for entrepreneurs.
Home to 60 percent of New Zealand’s top 200 tech companies and 54 percent of the country’s tech sector GDP, Auckland is fast becoming a hub for tech entrepreneurship. With its strategic position, business-friendly legislation, deep talent pool, and multiple support structures, Auckland provides the perfect environment for startups who want to stand out from the rest.