Economy Profile of New Zealand

Ease of Doing Business in New Zealand

ease of doing business in new zealand

Rankings on Doing Business topics – New Zealand

rankings on doing business topics new zealand

Topic Scores

topic scores new zealand

Starting a Business

This topic measures the number of procedures, time, cost and paid-in minimum capital requirement for a small- to medium-sized limited liability company to start up and formally operate in each economy’s largest business city.

To make the data comparable across 190 economies, Doing Business uses a standardized business that is 100% domestically owned, has start-up capital equivalent to 10 times the income per capita, engages in general industrial or commercial activities and employs between 10 and 50 people one month after the commencement of operations, all of whom are domestic nationals. Starting a Business considers two types of local limited liability companies that are identical in all aspects, except that one company is owned by 5 married women and the other by 5 married men. The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores are the simple average of the scores for each of the component indicators.

The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

What the indicators measure

Procedures to legally start and formally operate a company (number)

  • Preregistration (for example, name verification or reservation, notarization)

  • Registration in the economy’s largest business city

  • Postregistration (for example, social security registration, company seal)

  • Obtaining approval from spouse to start a business or to leave the home to register the company

  • Obtaining any gender specific document for company registration and operation or national identification card

Time required to complete each procedure (calendar days)

  • Does not include time spent gathering information

  • Each procedure starts on a separate day (2 procedures cannot start on the same day)

  • Procedures fully completed online are recorded as ½ day

  • Procedure is considered completed once final document is received

  • No prior contact with officials

    Cost required to complete each procedure (% of income per capita)

  • Official costs only, no bribes

  • No professional fees unless services required by law or commonly used in practice

    Paid-in minimum capital (% of income per capita)

  • Funds deposited in a bank or with third party before registration or up to 3 months after incorporation

To make the data comparable across economies, several assumptions about the business and the procedures are used. It is assumed that any required information is readily available and that the entrepreneur will pay no bribes.

The business:

-Is a limited liability company (or its legal equivalent). If there is more than one type of limited liability company in the economy, the limited liability form most common among domestic firms is chosen. Information on the most common form is obtained from incorporation lawyers or the statistical office.

-Operates in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.

-Performs general industrial or commercial activities such as the production or sale to the public of goods or services. The business does not perform foreign trade activities and does not handle products subject to a special tax regime, for example, liquor or tobacco. It is not using heavily polluting production processes.

-Does not qualify for investment incentives or any special benefits.

-Is 100% domestically owned.

-Has five business owners, none of whom is a legal entity. One business owner holds 30% of the company shares, two owners have 20% of shares each, and two owners have 15% of shares each.

-Is managed by one local director.

-Has between 10 and 50 employees one month after the commencement of operations, all of them domestic nationals.

-Has start-up capital of 10 times income per capita.

-Has an estimated turnover of at least 100 times income per capita.

-Leases the commercial plant or offices and is not a proprietor of real estate.

-Has an annual lease for the office space equivalent to one income per capita.

-Is in an office space of approximately 929 square meters (10,000 square feet).

-Has a company deed that is 10 pages long.

The owners:

-Have reached the legal age of majority and are capable of making decisions as an adult. If there is no legal age of majority, they are assumed to be 30 years old.

-Are in good health and have no criminal record.

-Are married, the marriage is monogamous and registered with the authorities.

-Where the answer differs according to the legal system applicable to the woman or man in question (as may be the case in economies where there is legal plurality), the answer used will be the one that applies to the majority of the population.

Starting a Business – New Zealand

starting a business new zealand

Figure – Starting a Business in New Zealand – Score

figure starting a business in new zealand score

Figure – Starting a Business in New Zealand and comparator economies – Ranking and Score

DB 2020 Starting a Business Score

figure starting a business in new zealand and comparator economies ranking and score

Note: The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores are the simple average of the scores for each of the component indicators.

Figure – Starting a Business in New Zealand – Procedure, Time and Cost

figure starting a business in new zealand procedure time and cost

* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures reflected here, see the summary below.

Details – Starting a Business in New Zealand – Procedure, Time and Cost

Apply online for registration with the Companies Office (including IRD number application and registration for GST)

Agency : New Zealand Companies Office

To reserve a company name online, entrepreneurs can visit the New Zealand Companies Office Web site (www.companies.govt.nz). A new company’s name must be unique and can be reserved for up to 20 working days with the Companies Office. To be incorporated under the Companies Act 1993, a company must have a name reserved by the Registrar of Companies, at least one share, at least one shareholder, at least one director, a registered office, and an address for service.

The applicant(s) can apply for company registration online by completing forms on company details and paying the registration fee. When the application is processed, the founder(s) will receive a notification by email along with the appropriate director and shareholder consent forms, which are generated by the Companies Office. The applicant must then fax the signed director and shareholder consent forms within 20 working days, after which the application will expire. The certificate of incorporation will be issued via email in a few minutes when the last consent form is accepted.

Promoters can apply online for a company IRD (Inland Revenue Department) number and register for the GST (Good and Service Tax) at the same time as incorporating a company online with the New Zealand Companies Office. The list of the information needed when applying for a company IRD number and registering for GST is as follows:

  • Contact details

  • The date the company will begin employing

  • The number of employees and contractors (including the number of employees that will have a student loan)

  • IRD number – The IRD number of each Director and all individual shareholders that are NZ residents, Main Business Activity, Place of Business and Postal Address, Trading Name of the company (if different from the Business Name), Company Contact details, a Business Industry Description and Code, and whether or not the Fringe Benefit Tax for employees is applicable.

  • GST number – GST accounting method, frequency of filing returns, business activity code, details of how you would like refunds to be paid, whether or not the company will be making tax exempt supplies, Business Industry Description and Code, and whether or not the company will be making imports/exports and ACC uses the business activity code to calculate levies for personal injury cover and residual claims (see www.businessdescription.co.nz for more information).

Since July 1st, 2008, it has been mandatory to file most documents with the Companies Office online. Starting in November 2014, clients had the ability to pay the incorporation prescribed fees using internet banking.

Takes place simultaneously with previous procedure.

Dealing with Construction Permits

This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required notifications, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certification requirements. The most recent round of data collection was completed in May 2019. See the methodology for more information

What the indicators measure

Procedures to legally build a warehouse (number)

  • Submitting all relevant documents and obtaining all necessary clearances, licenses, permits and certificates

  • Submitting all required notifications and receiving all necessary inspections

  • Obtaining utility connections for water and sewerage

  • Registering and selling the warehouse after its completion

    Time required to complete each procedure (calendar days)

  • Does not include time spent gathering information

  • Each procedure starts on a separate day—though procedures that can be fully completed online are an exception to this rule

  • Procedure is considered completed once final document is received

  • No prior contact with officials

    Cost required to complete each procedure (% of income per capita)

  • Official costs only, no bribes

    Building quality control index (0-15)

  • Quality of building regulations (0-2)

  • Quality control before construction (0-1)

  • Quality control during construction (0-3)

  • Quality control after construction (0-3)

  • Liability and insurance regimes (0-2)

  • Professional certifications (0-4)

To make the data comparable across economies, several assumptions about the construction company, the warehouse project and the utility connections are used.

The construction company (BuildCo):

  • Is a limited liability company (or its legal equivalent) and operates in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.

  • Is 100% domestically and privately owned; has five owners, none of whom is a legal entity. Has a licensed architect and a licensed engineer, both registered with the local association of architects or engineers. BuildCo is not assumed to have any other employees who are technical or licensed experts, such as geological or topographical experts.

  • Owns the land on which the warehouse will be built and will sell the warehouse upon its completion.

    The warehouse:

  • Will be used for general storage activities, such as storage of books or stationery.

  • Will have two stories, both above ground, with a total constructed area of approximately 1,300.6 square meters (14,000 square feet). Each floor will be 3 meters (9 feet, 10 inches) high and will be located on a land plot of approximately 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the warehouse is valued at 50 times income per capita.

  • Will have complete architectural and technical plans prepared by a licensed architect. If preparation of the plans requires such steps as obtaining further documentation or getting prior approvals from external agencies, these are counted as procedures.

  • Will take 30 weeks to construct (excluding all delays due to administrative and regulatory requirements).

    The water and sewerage connections:

  • Will be 150 meters (492 feet) from the existing water source and sewer tap. If there is no water delivery infrastructure in the economy, a borehole will be dug. If there is no sewerage infrastructure, a septic tank in the smallest size available will be installed or built.

  • Will have an average water use of 662 liters (175 gallons) a day and an average wastewater flow of 568 liters (150 gallons) a day. Will have a peak water use of 1,325 liters (350 gallons) a day and a peak wastewater flow of 1,136 liters (300 gallons) a day.

  • Will have a constant level of water demand and wastewater flow throughout the year; will be 1 inch in diameter for the water connection and 4 inches in diameter for the sewerage connection.

Dealing with Construction Permits – New Zealand

dealing with construction permits new zealand

Figure – Dealing with Construction Permits in New Zealand – Score

figure dealing with construction permits in new zealand score

Figure – Dealing with Construction Permits in New Zealand and comparator economies – Ranking and Score

DB 2020 Dealing with Construction Permits Score

figure dealing with construction permits in new zealand and comparator economies ranking and score

Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their scores for dealing with construction permits. These scores are the simple average of the scores for each of the component indicators.

Figure – Dealing with Construction Permits in New Zealand – Procedure, Time and Cost

figure dealing with construction permits in new zealand procedure time and cost

* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures reflected here, see the summary below.

Figure – Dealing with Construction Permits in New Zealand and comparator economies – Measure of Quality

figure dealing with construction permits in new zealand and comparator economies measure of quality

image

15.0

14.0

14.0

13.0

11.6

9.5

16

14

Index score

12

10

8

6

4

2

0

New Zealand

Australia Canada Germany Ireland OECD

high income

Details – Dealing with Construction Permits in New Zealand – Procedure, Time and Cost

image

No. Procedures Time to Complete Associated Costs

1 Obtain resource consent (planning) from District Council

Agency : District Council

under the current Unitary Plan the warehouse operation is considered a compliant activity.

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2 Obtain geo-technical study / soil test

Agency : Private firms

BuildCo will request a soil test for the structural calculations for the foundation.

For the warehouse, as described in the case study, the standard penetration test is what would most likely be done, which is a simplified procedure for this type of study, since the warehouse is not a very complex project. Soil testing helps to determine the properties of the soil, which can vary from place to place. The soil investigation helps to determine the bearing capacity of the land, which in turn helps to determine the load capability, the type and depth of foundation, in order to make sure to select a suitable construction technique.

30 days NZD 4,675

15 days NZD 3,000

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3 Obtain works over CCTV approval by Watercare Services

Agency : Watercare Services Ltd.

Application for works by Watercare Services can happen at the same time as the application for Resource Consent. Physical connection cannot take place until a Resource Consent is Granted.

7 days no charge

4 Obtain building consent from District Council

Agency : Unitary Authority: Auckland Council

By law, a Building consent is required for any new structure. The recent certificate of title and the detailed plans showing the site, the foundations, drainage and bracing must be included.

Fees for issuing a building consent vary, and there will be some government levies included. The Building Act specifies that applications be processed within 20 working days.

image

5

Receive foundation inspection by a building inspector from the Auckland Council

Agency : Unitary Authority: Auckland Council

1 day

no charge

The Development and Infrastructure contribution paid to the Auckland City Council does not include any contribution towards water and wastewater. This is done directly by the utility agency.

30 days NZD 42,181

6 Receive structural inspection by a building inspector from the Auckland Council

Agency : Unitary Authority: Auckland Council

A detailed inspection of the timber structure of the building is required before the roof cladding and building wraps are installed.

1 day no charge

image

7 Receive plumbing inspection by a building inspector from the Auckland Council

Agency : Unitary Authority: Auckland Council

An inspection of plumbing works in any part of the building is required.

1 day no charge

8 Receive cladding inspection by a building inspector from the Auckland Council

Agency : Unitary Authority: Auckland Council

An inspection of the building wrap and cavity construction is required before the cladding is installed.

1 day no charge

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9 Receive fire protection inspection by a building inspector from the Auckland Council

Agency : Unitary Authority: Auckland Council

An inspection of any installation of a fire-related product is required in order to check for compliance with the building consent and the building code.

  1. day no charge

    image

    10

    Obtain water and sewerage connection

    Agency : Watercare Services Ltd.

    The request for water and wastewater service connections is processed within 10 days after receipt of the application. BuildCo will be provided with a quote to be paid (1 day) and the approval to connect to the services is issued within 2 days.

    28 days

    NZD 13,591

    The water meter is installed by Watercare’s approved contractor within 15 days, as is the connection to the sewerage system.

    An Infrastructure growth contribution must be paid for all new building. This fixed rate contribution is paid directly to WaterCare.

    image

    11 Receive final inspection for a code compliance certificate (CCC)

    Agency : Unitary Authority: Auckland Council

    Within 5 days of the request for a code compliance certificate, there is final inspection is conducted to confirm that the building work covered by the approved building consent has been completed and that it complies with the consent and the building code. The code of compliance certificate itself is delivered within 20 days.

    25 days no charge

    image

    image

    Takes place simultaneously with previous procedure.

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    Details – Dealing with Construction Permits in New Zealand – Measure of Quality

    image

    Answer

    Score

    Building quality control index (0-15)

    15.0

    image

    How accessible are building laws and regulations in your economy? (0-1)

    Available online; Free 1.0

    of charge.

    Quality of building regulations index (0-2) 2.0

    Which requirements for obtaining a building permit are clearly specified in the building regulations or on any accessible website, brochure or pamphlet? (0-1)

    List of required documents; Fees to be paid; Required preapprovals.

    1.0

    image

    Quality control before construction index (0-1)

    1.0

    image

    Quality control during construction index (0-3)

    3.0

    Which third-party entities are required by law to verify that the building plans are in compliance with existing building regulations? (0-1)

    Licensed engineer. 1.0

    What types of inspections (if any) are required by law to be carried out during construction? (0-2) Inspections at various

    image

    Do legally mandated inspections occur in practice during construction? (0-1)

    Mandatory inspections are always done in

    practice.

    1.0

    phases; Risk-based inspections.

    2.0

    image

    Is there a final inspection required by law to verify that the building was built in accordance with the approved

    plans and regulations? (0-2)

    Yes, final inspection is done by

    government agency.

    2.0

    Quality control after construction index (0-3) 3.0

    image

    Liability and insurance regimes index (0-2)

    2.0

    Do legally mandated final inspections occur in practice? (0-1) Final inspection always occurs in practice.

    1.0

    Which parties (if any) are held liable by law for structural flaws or problems in the building once it is in use (Latent Defect Liability or Decennial Liability)? (0-1)

    Architect or engineer; Professional in charge of the supervision; Construction company; Owner or investor.

    1.0

    image

    Which parties (if any) are required by law to obtain an insurance policy to cover possible structural flaws or

    problems in the building once it is in use (Latent Defect Liability Insurance or Decennial Insurance)? (0-1)

    No party is required 1.0

    by law to obtain insurance ; Insurance is commonly taken in practice.

    What are the qualification requirements for the professional responsible for verifying that the architectural plans

    or drawings are in compliance with existing building regulations? (0-2)

    Minimum number of 2.0

    years of experience; University degree in architecture or engineering; Being a registered architect or engineer.

    Professional certifications index (0-4) 4.0

    What are the qualification requirements for the professional who supervises the construction on the ground? (0- 2)

    Minimum number of years of experience; University degree in engineering, construction or construction management; Being a registered architect or engineer; Passing a certification exam.

    2.0

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    image

    Getting Electricity

    This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tariffs index measures reliability of supply, transparency of tariffs and the price of electricity. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

    image

    What the indicators measure

    Case study assumptions

    Procedures to obtain an electricity connection (number)

    • Submitting all relevant documents and obtaining all necessary clearances and permits

    • Completing all required notifications and receiving all necessary inspections

    • Obtaining external installation works and possibly purchasing material for these works

    • Concluding any necessary supply contract and obtaining final supply

      Time required to complete each procedure (calendar days)

    • Is at least 1 calendar day

    • Each procedure starts on a separate day

    • Does not include time spent gathering information

    • Reflects the time spent in practice, with little follow-up and no prior contact with officials

      Cost required to complete each procedure (% of income per capita)

    • Official costs only, no bribes

    • Value added tax excluded

      The reliability of supply and transparency of tariffs index (0-8)

    • Duration and frequency of power outages (0–3)

    • Tools to monitor power outages (0–1)

    • Tools to restore power supply (0–1)

    • Regulatory monitoring of utilities’ performance (0–1)

    • Financial deterrents limiting outages (0–1)

    • Transparency and accessibility of tariffs (0–1)

      To make the data comparable across economies, several assumptions about the warehouse, the electricity connection and the monthly consumption are used.

      The warehouse:

      • Is owned by a local entrepreneur and is used for storage of goods.

      • Is located in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.

      • Is located in an area where similar warehouses are typically located and is in an area with no physical constraints. For example, the property is not near a railway.

      • Is a new construction and is being connected to electricity for the first time.

      • Has two stories with a total surface area of approximately 1,300.6 square meters (14,000 square feet). The plot of land on which it is built is 929 square meters (10,000 square feet).

        The electricity connection:

      • Is a permanent one with a three-phase, four-wire Y connection with a subscribed capacity of 140- kilo-volt-ampere (kVA) with a power factor of 1, when 1 kVA = 1 kilowatt (kW).

      • Has a length of 150 meters. The connection is to either the low- or medium-voltage distribution network and is either overhead or underground, whichever is more common in the area where the warehouse is located and requires works that involve the crossing of a 10-meter road (such as by excavation or overhead lines) but are all carried out on public land. There is no crossing of other owners’ private property because the warehouse has access to a road.

      • Does not require work to install the internal wiring of the warehouse. This has already been completed up to and including the customer’s service panel or switchboard and the meter base.

        The monthly consumption:

      • It is assumed that the warehouse operates 30 days a month from 9:00 a.m. to 5:00 p.m. (8 hours a day), with equipment utilized at 80% of capacity on average and that there are no electricity cuts (assumed for simplicity reasons) and the monthly energy consumption is 26,880 kilowatt-hours (kWh); hourly consumption is 112 kWh.

      • If multiple electricity suppliers exist, the warehouse is served by the cheapest supplier.

      • Tariffs effective in January of the current year are used for calculation of the price of electricity for the warehouse. Although January has 31 days, for calculation purposes only 30 days are used.

      Price of electricity (cents per kilowatt-hour)*

    • Price based on monthly bill for commercial warehouse in case study

    *Note: Doing Business measures the price of electricity, but it is not included in the ease of doing business score nor in the ranking on the ease of getting electricity.

    image

    Standardized Connection

    Name of utility

    Vector Limited

    Getting Electricity – New Zealand

    image

    City Covered

    Auckland

    Price of electricity (US cents per kWh) 12.0

    image

    Indicator

    New Zealand

    OECD high income

    Best Regulatory Performance

    Procedures (number)

    5

    4.4

    3 (28 Economies)

    image

    Cost (% of income per capita)

    67.9

    61.0

    0.0 (3 Economies)

    Time (days) 58 74.8 18 (3 Economies)

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    Figure – Getting Electricity in New Zealand – Score

    Reliability of supply and transparency of tariff index (0-8) 7 7.4 8 (26 Economies)

    image

    image

    66.7

    image

    99.2

    image

    87.5

    Procedures

    image

    82.6

    Time

    Cost

    Reliability of supply and transparency of tariff index

    Figure – Getting Electricity in New Zealand and comparator economies – Ranking and Score

    DB 2020 Getting Electricity Score

    image

    0 100

    98.8: Germany (Rank: 5)

    85.9: Regional Average (OECD high income)

    84.2: Ireland (Rank: 47)

    84.0: New Zealand (Rank: 48)

    82.3: Australia (Rank: 62)

    63.8: Canada (Rank: 124)

    Note: The ranking of economies on the ease of getting electricity is determined by sorting their scores for getting electricity. These scores are the simple average of the scores for all the component indicators except the price of electricity.

    Figure – Getting Electricity in New Zealand – Procedure, Time and Cost

    image

    image

    Time (days) Cost (% of income per capita)

    image

    80

    Cost (% of income per capita)

    50 70

    60

    40

    Time (days)

    50

    30 40

    20 30

    20

    10

    10

    0 0

    1 * 2 3 4 5

    Procedures (number)

    * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

    Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures

    reflected here, see the summary below.

    Figure – Getting Electricity in New Zealand and comparator economies – Measure of Quality

    image

    8

    8

    7

    7

    7.4

    6

    9

    8

    Index score

    7

    6

    5

    4

    3

    2

    1

    0

    New Zealand

    Australia Canada Germany Ireland OECD

    high income

    Details – Getting Electricity in New Zealand – Procedure, Time and Cost

    image

    1

    Request new connection account from distribution utility (Vector) and receive site visit

    Agency : Vector Electricity Network

    Vector is the lines company servicing the greater Auckland Region. Vector installs and maintains the reticulation network which is generally located within the public domain and carries out the works necessary to connect customers. Vector charges the customer monthly line charges according to published rates. These are recovered by the customer's chosen retailer through the retailer's invoice.

    21 calendar days

    NZD 0

    Once Vector receive a new commercial connection request it is logged into its customer management database and issued to the service provider for an indicative price to be provided. This indicative price is a desktop estimate and is provided within 1 week from the enquiry. Upon receiving an indicative price if the customer then wishes to proceed they will pay a 'design fee' and

    Vector will complete a detailed design and price for their connection project

    No.

    Procedures

    Time to Complete

    Associated Costs

    image

  2. Submit connection application to retailer and sign supply contract 6 calendar days NZD 240

Agency : Mercury Energy

Application can be submitted via faxed form or via telephone with the business center. The

business team then runs a credit check on the customer. Depending on the credit check, the

retailer will decide whether the customer has to provide a bond or not. This supply contract can be

received either online or by mail (as per customer’s instructions). It can be signed, scanned and

sent back or mailed back. The customer has a choice of some 8 retailers such as Mercury Energy

or Contact Energy.

3 Receive and pay estimate from Vector and obtain external works

Agency : Vector Electricity Network

28 calendar days

NZD 39,500

Contract is emailed and posted to the customer. The contract is then signed and returned to

Vector who approve with the contribution received from the customer as requested in the contract.

The project is then issued to the Service provider responsible to complete the onsite work. All

approvals and resource consents are requested by the Service Provider who schedules the work

dependent on the expected date of these consents being issued. This work is then coordinated

and completed by the Service provider in coordination with the customer. The customer dictates

the dates for the work to be completed. The utility also obtains a specific Resource Consent

application for crossing a road (from Auckland Council).

4 Submit certificate of compliance to retailer and request meter installation

Agency : Electrician

8 calendar days

NZD 0

Electrician must issue a Certificate of Compliance (CoC) to customer and retailer when doing any

fixed wiring work, including fitting new power points. CoC's are not issued for maintenance work,

such as replacing sockets and light fittings or repairing appliances. The CoC indicates that the

work done is electrically safe and has been carried out in accordance with New Zealand’s

electrical safety standards and codes. It also shows they have tested their work once completed. A

CoC guarantees that the work has been completed by a licensed electrician; meets safety

standards set by law, and has been tested. The retailer has private meter distribution contractors

who do the installation

5 Request and receive final inspection and turn-on of electricity supply

Agency : Vector Electricity Network

1 calendar day

NZD 0

The customer, electrician or retailer requests livening of the supply. Vector will then inspect the

COC before livening the supply through to the customer fuse pillar on the boundary. The inspector

will then liven the customer premises when the installation is complete, including the meter

installation.

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Takes place simultaneously with previous procedure.

Details – Getting Electricity in New Zealand – Measure of Quality

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Answer

Reliability of supply and transparency of tariff index (0-8) 7

System average interruption duration index (SAIDI) 3.8

Total duration and frequency of outages per customer a year (0-3) 2

What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 1.0

System average interruption frequency index (SAIFI) 2.1

Does the distribution utility use automated tools to monitor outages? Yes

Mechanisms for monitoring outages (0-1) 1

Does the distribution utility use automated tools to restore service? Yes

Mechanisms for restoring service (0-1) 1

Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on reliability of supply? Yes

Regulatory monitoring (0-1) 1

Does the utility either pay compensation to customers or face fines by the regulator (or both) if outages exceed a certain cap? Yes

Financial deterrents aimed at limiting outages (0-1) 1

Are effective tariffs available online? Yes

Communication of tariffs and tariff changes (0-1) 1

Link to the website, if available online The retail market is

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Are customers notified of a change in tariff ahead of the billing cycle? Yes

competitive in New Zealand, with many players involved. Each retailer provides its own tariffs, available online or upon request on their respective website. Vector Limited (transmission network) provides its tariffs online at http://vector.co.nz/electrici ty/business-pricing

Note:

If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tariff index. If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index.

If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index.

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Registering Property

This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has five dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

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What the indicators measure

Case study assumptions

Procedures to legally transfer title on immovable property (number)

  • Preregistration procedures (for example, checking for liens, notarizing sales agreement, paying property transfer taxes)

  • Registration procedures in the economy's largest business city.

  • Postregistration procedures (for example, filling title with municipality)

    Time required to complete each procedure (calendar days)

  • Does not include time spent gathering information

  • Each procedure starts on a separate day – though procedures that can be fully completed online are an exception to this rule

  • Procedure is considered completed once final document is received

  • No prior contact with officials

    Cost required to complete each procedure (% of property value)

  • Official costs only (such as administrative fees, duties and taxes).

  • Value Added Tax, Capital Gains Tax and illicit payments are excluded

    Quality of land administration index (0-30)

  • Reliability of infrastructure index (0-8)

  • Transparency of information index (0–6)

  • Geographic coverage index (0–8)

  • Land dispute resolution index (0–8)

  • Equal access to property rights index (-2–0)

To make the data comparable across economies, several assumptions about the parties to the transaction, the property and the procedures are used.

The parties (buyer and seller):

  • Are limited liability companies (or the legal equivalent).

  • Are located in the periurban (that is, on the outskirts of the city but still within its official limits) area of the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.

  • Are 100% domestically and privately owned.

  • Perform general commercial activities.

    The property (fully owned by the seller):

  • Has a value of 50 times income per capita, which equals the sale price.

  • Is fully owned by the seller.

  • Has no mortgages attached and has been under the same ownership for the past 10 years.

  • Is registered in the land registry or cadastre, or both, and is free of title disputes.

  • Is located in a periurban commercial zone (that is, on the outskirts of the city but still within its official limits), and no rezoning is required.

  • Consists of land and a building. The land area is 557.4 square meters (6,000 square feet). A two- story warehouse of 929 square meters (10,000 square feet) is located on the land. The warehouse is 10 years old, is in good condition, has no heating system and complies with all safety standards, building codes and legal requirements. The property, consisting of land and building, will be transferred in its entirety.

  • Will not be subject to renovations or additional construction following the purchase.

  • Has no trees, natural water sources, natural reserves or historical monuments of any kind.

  • Will not be used for special purposes, and no special permits, such as for residential use, industrial plants, waste storage or certain types of agricultural activities, are required.

  • Has no occupants, and no other party holds a legal interest in it.

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Registering Property – New Zealand

Indicator

New Zealand

OECD high income

Best Regulatory Performance

Procedures (number)

2

4.7

1 (5 Economies)

Time (days)

3.5

23.6

1 (2 Economies)

Cost (% of property value)

0.1

4.2

0.0 (Saudi Arabia)

Quality of the land administration index (0-30)

26.5

23.2

None in 2018/19

Figure – Registering Property in New Zealand – Score

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91.7

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98.8

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99.6

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88.3

Procedures

Time

Cost

Quality of the land administration index

Figure – Registering Property in New Zealand and comparator economies – Ranking and Score

DB 2020 Registering Property Score

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0 100

94.6: New Zealand (Rank: 2)

77.8: Canada (Rank: 36)

77.0: Regional Average (OECD high income)

75.7: Australia (Rank: 42)

71.7: Ireland (Rank: 60)

66.6: Germany (Rank: 76)

Note: The ranking of economies on the ease of registering property is determined by sorting their scores for registering property. These scores are the simple average of the scores for each of the component indicators.

Figure – Registering Property in New Zealand – Procedure, Time and Cost

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3.5

Time (days) Cost (% of property value)

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0.06

3

Time (days)

2.5

2

1.5

1

0.5

0.05

Cost (% of property value)

0.04

0.03

0.02

0.01

0 0

1 2

Procedures (number)

* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures reflected here, see the summary below.

Figure – Registering Property in New Zealand and comparator economies – Measure of Quality

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26.5

23.0

23.5

23.2

19.5

21.5

30

Index score

25

20

15

10

5

0

New Zealand

Australia Canada Germany Ireland OECD

high income

Details – Registering Property in New Zealand – Procedure, Time and Cost

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1

Obtain a Land Information Memorandum

Agency : Auckland Council

The Land Information Memorandum (LIM) is not a legal requirement for registration, but it is an essential contractual requirement in practice. The LIM provides information on the legality of the building, building permits, restrictions on land use, rates, special characteristics of the land, drainage, etc. LIMs are issued by local authorities.

3 days

Most conveyancing is done by lawyers, but there is still an option for legal entities to register

transfers though a (i) licensed conveyor or (ii) themselves.

NZD 349.57; (Standard LIM – Up to 10 working days (does not include delivery) $298; Urgent LIM

– Up to 3 working days (does not include delivery)

$402

Both prices include the General Service Tax of 15%, which is removed from the total cost calculation.)

No.

Procedures

Time to Complete

Associated Costs

2 Register title through Land Information New Zealand

Agency : Land Information New Zealand

The Land Information New Zealand (LINZ) platform is an online property registration system. Confirmation is usually returned online within minutes. LINZ currently operates a dual system:

  • An online land title registration system.

  • A paper-based registration system (via LINZ processing centers).

    It is possible to register manually through one of the Land Titles Offices. In this case, it would take 10 working days and cost NZD 176 (plus NZD 20 counter fee per instrument). Conveyancers and or lawyer's fees, if used, would be approximately NZD 1,500. There is a cost to the vendor, which involves selling a property through a real estate agent, which would cost up to 4% of the purchase price. A person could privately advertise the sale of their property. The lawyer/conveyancer is required to certify that documents are correct and for registration. The documentation shall include:

    The documentation shall include:

  • Personal identification

  • Written authority for the conveyancer/lawyer to register the property electronically

  • Signed transfer of property

-Tax Statement from the buyer and the seller: After the Land Transfer Amendment Act of 2015, both parties of the transaction have to submit a Tax Statement which contains details of the title being transferred, the buyer or seller, if the land has a home on it, if the parties are New Zealand Citizens (or local companies), visa holders, whether any exemption applies (the main one being where the property is a person’s main home) and confirmation as to whether the person/entity is tax resident anywhere else in the world. The Tax Statement must include the IRD (tax) number.

Less than one day, online

NZD 1,580; (NZD 80

registration fee per transfer (for online registration) plus NZD 1,500 for conveyancer fee.)

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Takes place simultaneously with previous procedure.

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Details – Registering Property in New Zealand – Measure of Quality

Answer

Score

Quality of the land administration index (0-30)

26.5

Reliability of infrastructure index (0-8)

8.0

Type of land registration system in the economy:

Torrens System

What is the institution in charge of immovable property registration?

Land Information New Zealand

In what format are past and newly issued land records kept at the immovable property registry of the largest business city of the economy —in a paper format or in a computerized format (scanned or fully digital)?

Computer/Fully digital

2.0

Is there a comprehensive and functional electronic database for checking for encumbrances (liens, mortgages, restrictions and the like)?

Yes

1.0

Institution in charge of the plans showing legal boundaries in the largest business city:

Land Information New Zealand

In what format are past and newly issued cadastral plans kept at the mapping agency of the largest business city of the economy—in a paper format or in a computerized format (scanned or fully digital)?

Computer/Fully digital

2.0

Is there an electronic database for recording boundaries, checking plans and providing cadastral information (geographic information system)?

Yes

1.0

Is the information recorded by the immovable property registration agency and the cadastral or mapping agency kept in a single database, in different but linked databases or in separate databases?

Single database

1.0

Do the immovable property registration agency and cadastral or mapping agency use the same identification number for properties?

Yes

1.0

Transparency of information index (0–6)

4.5

Who is able to obtain information on land ownership at the agency in charge of immovable property registration in the largest business city?

Anyone who pays the official fee

1.0

Is the list of documents that are required to complete any type of property transaction made publicly available– and if so, how?

Yes, online

0.5

Link for online access:

http://www.linz.govt.n z/land/land- registration/prepare- and-submit-your- dealing

Is the applicable fee schedule for any type of property transaction at the agency in charge of immovable property registration in the largest business city made publicly available–and if so, how?

Yes, online

0.5

Link for online access:

http://www.linz.govt.n z/about- linz/fees/survey-and- title-fees

Does the agency in charge of immovable property registration agency formally commit to deliver a legally binding document that proves property ownership within a specific timeframe –and if so, how does it communicate the service standard?

Yes, online

0.5

Link for online access:

http://www.linz.govt.n z/land/land- registration

Is there a specific and independent mechanism for filing complaints about a problem that occurred at the agency in charge of immovable property registration?

No

0.0

Contact information:

Are there publicly available official statistics tracking the number of transactions at the immovable property registration agency?

Yes

0.5

Number of property transfers in the largest business city in 2018:

41022.0

Who is able to consult maps of land plots in the largest business city?

Anyone who pays the official fee

0.5

Is the applicable fee schedule for accessing maps of land plots made publicly available—and if so, how?

Yes, online

0.5

Link for online access:

http://www.linz.govt.n z/land/land- records/types-land- records

Does the cadastral/mapping agency formally specifies the timeframe to deliver an updated cadastral plan—and

Yes, online

0.5

if so, how does it communicate the service standard?

Link for online access:

http://www.linz.govt.n

z/land/landonline

Is there a specific and independent mechanism for filing complaints about a problem that occurred at the

No

0.0

cadastral or mapping agency?

Contact information:

Geographic coverage index (0–8)

8.0

Are all privately held land plots in the largest business city formally registered at the immovable property

Yes

2.0

registry?

Are all privately held land plots in the economy formally registered at the immovable property registry?

Yes

2.0

Are all privately held land plots in the largest business city mapped?

Yes

2.0

Are all privately held land plots in the economy mapped?

Yes

2.0

Land dispute resolution index (0–8)

6.0

Does the law require that all property sale transactions be registered at the immovable property registry to make

Yes

1.5

them opposable to third parties?

Legal basis:

Statutory – Torrens

System – under the

Land Transfer Act

1952 (NZ)

Is the system of immovable property registration subject to a state or private guarantee?

Yes

0.5

Type of guarantee:

State guarantee

Legal basis:

Section 64, Statutory

– Torrens System –

under the Land

Transfer Act 1952

(NZ). Title guaranteed

to registered

proprietor (Subject to

the Provisions of Part

1 of the Land

Transfer Amendment

Act 1963, after land

has become subject

to this Act, no title

thereto, or to any

right, privilege, or

easement in, upon, or

over the same, shall

be acquired by

possession or user

adversely to or in

derogation of the title

of the registered

proprietor).

Is there a is a specific, out-of-court compensation mechanism to cover for losses incurred by parties who

No

0.0

engaged in good faith in a property transaction based on erroneous information certified by the immovable

property registry?

Legal basis:

Section 172 of the

Land Transfer Act

provides for the

possibility of bringing

an action against the

Crown for recovery or

damages in case of

mistake or

misfeasance of

Registrar

Does the legal system require a control of legality of the documents necessary for a property transaction (e.g., checking the compliance of contracts with requirements of the law)?

Yes

0.5

If yes, who is responsible for checking the legality of the documents?

Registrar; Lawyer;

Does the legal system require verification of the identity of the parties to a property transaction?

Yes

0.5

If yes, who is responsible for verifying the identity of the parties?

Lawyer;

Is there a national database to verify the accuracy of government issued identity documents?

Yes

1.0

What is the Court of first instance in charge of a case involving a standard land dispute between two local businesses over tenure rights for a property worth 50 times gross national income (GNI) per capita and located in the largest business city?

High Court

How long does it take on average to obtain a decision from the first-instance court for such a case (without appeal)?

Between 1 and 2 years

2.0

Are there publicly available statistics on the number of land disputes at the economy level in the first instance court?

No

0.0

Number of land disputes in the economy in 2018:

Equal access to property rights index (-2–0)

0.0

Do unmarried men and unmarried women have equal ownership rights to property?

Yes

Do married men and married women have equal ownership rights to property?

Yes

0.0

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Getting Credit

This topic explores two sets of issues—the strength of credit reporting systems and the effectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

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What the indicators measure

Case study assumptions

Strength of legal rights index (0–12)

  • Rights of borrowers and lenders through collateral laws (0-10)

  • Protection of secured creditors’ rights through bankruptcy laws (0-2)

    Depth of credit information index (0–8)

  • Scope and accessibility of credit information distributed by credit bureaus and credit registries (0-8)

    Credit bureau coverage (% of adults)

  • Number of individuals and firms listed in largest credit bureau as a percentage of adult population

    Credit registry coverage (% of adults)

  • Number of individuals and firms listed in credit registry as a percentage of adult population

Doing Business assesses the sharing of credit information and the legal rights of borrowers and lenders with respect to secured transactions through 2 sets of indicators. The depth of credit information index measures rules and practices affecting the coverage, scope and accessibility of credit information available through a credit registry or a credit bureau. The strength of legal rights index measures the degree to which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. For each economy it is first determined whether a unitary secured transactions system exists. Then two case scenarios, case A and case B, are used to determine how a nonpossessory security interest is created, publicized and enforced according to the law. Special emphasis is given to how the collateral registry operates (if registration of security interests is possible). The case scenarios involve a secured borrower, company ABC, and a secured lender, BizBank.

In some economies the legal framework for secured transactions will allow only case A or case B (not both) to apply. Both cases examine the same set of legal provisions relating to the use of movable collateral.

Several assumptions about the secured borrower (ABC) and lender (BizBank) are used:

  • ABC is a domestic limited liability company (or its legal equivalent).

  • ABC has up to 50 employees.

  • ABC has its headquarters and only base of operations in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.

  • Both ABC and BizBank are 100% domestically owned.

The case scenarios also involve assumptions. In case A, as collateral for the loan, ABC grants BizBank a nonpossessory security interest in one category of movable assets, for example, its machinery or its inventory. ABC wants to keep both possession and ownership of the collateral. In economies where the law does not allow nonpossessory security interests in movable property, ABC and BizBank use a fiduciary transfer-of-title arrangement (or a similar substitute for nonpossessory security interests).

In case B, ABC grants BizBank a business charge, enterprise charge, floating charge or any charge that gives BizBank a security interest over ABC’s combined movable assets (or as much of ABC’s movable assets as possible). ABC keeps ownership and possession of the assets.

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Getting Credit – New Zealand

Indicator

New Zealand

OECD high income

Best Regulatory Performance

Strength of legal rights index (0-12)

12

6.1

12 (5 Economies)

Depth of credit information index (0-8)

8

6.8

8 (53 Economies)

Credit registry coverage (% of adults)

0.0

24.4

100.0 (2 Economies)

Credit bureau coverage (% of adults)

100.0

66.7

100.0 (14 Economies)

Figure – Getting Credit in New Zealand – Score

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100.0

Score – Getting Credit

Figure – Getting Credit in New Zealand and comparator economies – Ranking and Score

DB 2020 Getting Credit Score

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0 100

95.0: Australia (Rank: 4)

85.0: Canada (Rank: 15)

70.0: Germany (Rank: 48)

70.0: Ireland (Rank: 48)

64.3: Regional Average (OECD high income)

100: New Zealand (Rank: 1)

Note: The ranking of economies on the ease of getting credit is determined by sorting their scores for getting credit. These scores are the sum of the scores for the strength of legal rights index and the depth of credit information index.

Figure – Legal Rights in New Zealand and comparator economies

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12

11

9

6

7

6.1

14

12

Index Score

10

8

6

4

2

0

New Zealand

Australia Canada Germany Ireland OECD

high income

Details – Legal Rights in New Zealand

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Strength of legal rights index (0-12) 12

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Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without requiring a specific description

of collateral?

Yes

Does an integrated or unified legal framework for secured transactions that extends to the creation, publicity and enforcement of functional equivalents to security interests in movable assets exist in the economy?

Yes

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May a security right extend to future or after-acquired assets, and does it extend automatically to the products, proceeds and replacements of the

original assets?

Yes

Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring a specific description of collateral?

Yes

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Is a collateral registry in operation for both incorporated and non-incorporated entities, that is unified geographically and by asset type, with an

electronic database indexed by debtor's name?

Yes

Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and obligations be secured between parties; and can the collateral agreement include a maximum amount for which the assets are encumbered?

Yes

Does a notice-based collateral registry exist in which all functional equivalents can be registered? Yes

Does a modern collateral registry exist in which registrations, amendments, cancellations and searches can be performed online by any interested third Yes party?

Are secured creditors paid first (i.e. before tax claims and employee claims) when a debtor defaults outside an insolvency procedure? Yes

Are secured creditors paid first (i.e. before tax claims and employee claims) when a business is liquidated? Yes

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Does the law allow parties to agree on out of court enforcement at the time a security interest is created? Does the law allow the secured creditor to sell Yes the collateral through public auction or private tender, as well as, for the secured creditor to keep the asset in satisfaction of the debt?

Are secured creditors subject to an automatic stay on enforcement when a debtor enters a court-supervised reorganization procedure? Does the law protect secured creditors’ rights by providing clear grounds for relief from the stay and sets a time limit for it?

Yes

Figure – Credit Information in New Zealand and comparator economies

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8

8

8

8

7

6.8

8.2

8

Index Score

7.8

7.6

7.4

7.2

7

6.8

6.6

6.4

6.2

6

New Zealand

Australia Canada Germany Ireland OECD

high income

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Details – Credit Information in New Zealand

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Depth of credit information index (0-8)

Credit bureau

Credit registry

Score

Are data on both firms and individuals distributed?

Yes

No

1

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Are data from retailers or utility companies – in addition to data from banks and

financial institutions – distributed?

Yes

No

1

Are both positive and negative credit data distributed? Yes No 1

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Are data on loan amounts below 1% of income per capita distributed?

Yes

No

1

Are at least 2 years of historical data distributed? (Credit bureaus and registries that distribute more than 10 years of negative data or erase data on defaults as soon as they are repaid obtain a score of 0 for this component.)

Yes No 1

By law, do borrowers have the right to access their data in the credit bureau or credit registry?

Yes No 1

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Can banks and financial institutions access borrowers’ credit information online (for example, through an online platform, a system-to-system connection or both)?

Yes No 1

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Total Score ("yes" to either public bureau or private registry)

8

Are bureau or registry credit scores offered as a value-added service to help banks and financial institutions assess the creditworthiness of borrowers?

Yes No 1

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Note: An economy receives a score of 1 if there is a "yes" to either bureau or registry. If the credit bureau or registry is not operational or covers less than 5% of the adult population, the total score on the depth of credit information index is 0.

Coverage

Credit bureau

Credit registry

Number of individuals

3,573,477

0

Number of firms

405,220

0

Total

3,978,697

0

Percentage of adult population

100.0

0.0

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Protecting Minority Investors

This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

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What the indicators measure

Case study assumptions

  • Extent of disclosure index (0–10): Disclosure, review, and approval requirements for related-party transactions

  • Extent of director liability index (0–10): Ability of minority shareholders to sue and hold interested directors liable for prejudicial related-party transactions; Available legal remedies (damages, disgorgement of profits, disqualification

    from managerial position(s) for one year or more, rescission of the transaction)

  • Ease of shareholder suits index (0–10): Access to internal corporate documents; Evidence obtainable during trial and allocation of legal expenses

  • Extent of conflict of interest regulation index (0-30): Sum of the extent of disclosure, extent of director liability and ease of shareholder suits indices

  • Extent of shareholder rights index (0-6): Shareholders’ rights and role in major corporate decisions

  • Extent of ownership and control index (0-7): Governance safeguards protecting shareholders from undue board control and entrenchment

  • Extent of corporate transparency index (0-7): Corporate transparency on ownership stakes, compensation, audits and financial prospects

  • Extent of shareholder governance index (0–20): Sum of the extent of shareholders rights, extent of ownership and control and extent of corporate transparency indices

  • Strength of minority investor protection index (0–50): Sum of the extent of conflict of interest regulation and extent of shareholder governance indices

To make the data comparable across economies, a case study uses several assumptions about the business and the transaction.

The business (Buyer):

  • Is a publicly traded corporation listed on the economy’s most important stock exchange.

  • Has a board of directors and a chief executive officer (CEO) who may legally act on behalf of Buyer where permitted, even if this is not specifically required by law.

  • Has a supervisory board in economies with a two-tier board system on which Mr. James appointed 60% of the shareholder-elected members.

  • Has not adopted bylaws or articles of association that go beyond the minimum requirements. Does not follow codes, principles, recommendations or guidelines that are not mandatory.

  • Is a manufacturing company with its own distribution network.

    The transaction involves the following details:

  • Mr. James owns 60% of Buyer, sits on Buyer’s board of directors and elected two directors to Buyer’s five-member board.

  • Mr. James also owns 90% of Seller, a company that operates a chain of retail hardware stores. Seller recently closed a large number of its stores.

  • Mr. James proposes that Buyer purchase Seller’s unused fleet of trucks to expand Buyer’s distribution of its food products, a proposal to which Buyer agrees. The price is equal to 10% of Buyer’s assets and is higher than the market value.

  • The proposed transaction is part of the company’s principal activity and is not outside the authority of the company.

  • Buyer enters into the transaction. All required approvals are obtained, and all required disclosures made—that is, the transaction was not entered into fraudulently.

  • The transaction causes damages to Buyer. Shareholders sue Mr. James and the executives and directors that approved the transaction.

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Stock exchange information

Stock exchange New Zealand Exchange

Protecting Minority Investors – New Zealand

Stock exchange URL http://www.nzx.com

Listed firms with equity securities 163

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City Covered Auckland

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Indicator

New Zealand

OECD high income

Best Regulatory Performance

Extent of disclosure index (0-10)

10.0

6.5

10 (13 Economies)

Extent of director liability index (0-10)

9.0

5.3

10 (3 Economies)

Ease of shareholder suits index (0-10)

9.0

7.3

10 (Djibouti)

Extent of shareholder rights index (0-6)

5.0

4.7

6 (19 Economies)

Extent of ownership and control index (0-7)

5.0

4.5

7 (9 Economies)

Extent of corporate transparency index (0-7)

5.0

5.7

7 (13 Economies)

Figure – Protecting Minority in New Zealand – Score

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86.0

Score – Protecting Minority Investors

Figure – Protecting Minority Investors in New Zealand and comparator economies – Ranking and Score

DB 2020 Protecting Minority Investors Score

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0 100

86.0: New Zealand (Rank: 3)

84.0: Canada (Rank: 7)

80.0: Ireland (Rank: 13)

68.2: Regional Average (OECD high income) 64.0: Australia (Rank: 57)

62.0: Germany (Rank: 61)

Note: The ranking of economies on the strength of minority investor protections is determined by sorting their scores for protecting minority investors. These scores are the simple average of the scores for the extent of conflict of interest regulation index and the extent of shareholder governance index.

Figure – Protecting Minority Investors in New Zealand and comparator economies – Measure of Quality

New Zealand

Australia

Canada

Germany

Ireland

OECD high income

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image

5

9

10

5

5

9

7

2

8

3

4

8

6

9

8

6

4

9

6

5

5

5

5

5

6

8

9

3

5

9

5.6

5.6

6.6

4.3

4.5

7.4

0 5 10 15 20 25 30 35 40 45

Sub-Indicator Score

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image

image

image

image

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Extent of corporate transparency index (0-7) Extent of director liability index (0-10) Extent of disclosure index (0-10) Extent of ownership and control index (0-7) Extent of shareholder rights index (0-6) Ease of shareholder suits index (0-10)

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Details – Protecting Minority Investors in New Zealand – Measure of Quality

Answer

Score

Extent of conflict of interest regulation index (0-30)

Extent of disclosure index (0-10)

10.0

Whose decision is sufficient to approve the Buyer-Seller transaction? (0-3)

Shareholders excluding interested parties

3.0

Must an external body review the terms of the transaction before it takes place? (0-1)

Yes

1.0

Must Mr. James disclose his conflict of interest to the board of directors? (0-2)

Full disclosure of all material facts

2.0

Must Buyer disclose the transaction in periodic filings (e.g. annual reports)? (0-2)

Disclosure on the transaction and on the conflict of interest

2.0

Must Buyer immediately disclose the transaction to the public? (0-2)

Disclosure on the transaction and on the conflict of interest

2.0

Extent of director liability index (0-10)

9.0

Can shareholders representing 10% of Buyer's share capital sue for the damage the transaction caused to Buyer? (0-1)

Yes

1.0

Can shareholders hold Mr. James liable for the damage the transaction caused to Buyer? (0-2)

Liable if unfair or prejudicial

2.0

Can shareholders hold the other directors liable for the damage the transaction caused to Buyer? (0-2)

Liable if unfair or prejudicial

2.0

Must Mr. James pay damages for the harm caused to Buyer upon a successful claim by shareholders? (0-1)

Yes

1.0

Must Mr. James repay profits made from the transaction upon a successful claim by shareholders? (0-1)

Yes

1.0

Is Mr. James disqualified upon a successful claim by shareholders? (0-1)

No

0.0

Can a court void the transaction upon a successful claim by shareholders? (0-2)

Voidable if unfair or prejudicial

2.0

Ease of shareholder suits index (0-10)

9.0

Before suing, can shareholders representing 10% of Buyer's share capital inspect the transaction documents? (0-1)

Yes

1.0

Can the plaintiff obtain any documents from the defendant and witnesses at trial? (0-3)

Any relevant document

3.0

Can the plaintiff request categories of documents from the defendant without identifying specific ones? (0-1)

Yes

1.0

Can the plaintiff directly question the defendant and witnesses at trial? (0-2)

Yes

2.0

Is the level of proof required for civil suits lower than that of criminal cases? (0-1)

Yes

1.0

Can shareholder plaintiffs recover their legal expenses from the company? (0-2)

Yes if successful

1.0

Extent of shareholder governance index (0-20)

Extent of shareholder rights index (0-6)

5.0

Does the sale of 51% of Buyer's assets require shareholder approval?

Yes

1.0

Can shareholders representing 10% of Buyer's share capital call for a meeting of shareholders?

Yes

1.0

Must Buyer obtain its shareholders’ approval every time it issues new shares?

No

0.0

Do shareholders automatically receive preemption rights every time Buyer issues new shares?

Yes

1.0

Do shareholders elect and dismiss the external auditor?

Yes

1.0

Are changes to the rights of a class of shares only possible if the holders of the affected shares approve?

Yes

1.0

Extent of ownership and control index (0-7)

5.0

Is it forbidden to appoint the same individual as CEO and chairperson of the board of directors?

No

0.0

Must the board of directors include independent and nonexecutive board members?

Yes

1.0

Can shareholders remove members of the board of directors without cause before the end of their term?

Yes

1.0

Must the board of directors include a separate audit committee exclusively comprising board members?

Yes

1.0

Must a potential acquirer make a tender offer to all shareholders upon acquiring 50% of Buyer?

Yes

1.0

Must Buyer pay declared dividends within a maximum period set by law?

No

0.0

Is a subsidiary prohibited from acquiring shares issued by its parent company?

Yes

1.0

Extent of corporate transparency index (0-7)

5.0

Must Buyer disclose direct and indirect beneficial ownership stakes representing 5%?

Yes

1.0

Must Buyer disclose information about board members’ primary employment and directorships in other companies?

No

0.0

Must Buyer disclose the compensation of individual managers?

Yes

1.0

Must a detailed notice of general meeting be sent 21 days before the meeting?

No

0.0

Can shareholders representing 5% of Buyer’s share capital put items on the general meeting agenda?

Yes

1.0

Must Buyer's annual financial statements be audited by an external auditor?

Yes

1.0

Must Buyer disclose its audit reports to the public?

Yes

1.0

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Paying Taxes

This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as the administrative burden of paying taxes and contributions and complying with postfiling procedures (VAT refund and tax audit). The most recent round of data collection for the project was completed in May 2019 covering for the Paying Taxes indicator calendar year 2018 (January 1, 2018 – December 31, 2018). See the methodology for more information.

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What the indicators measure

Case study assumptions

Tax payments for a manufacturing company in 2018 (number per year adjusted for electronic and joint filing and payment)

  • Total number of taxes and contributions paid or withheld, including consumption taxes (value added tax, sales tax or goods and service tax)

  • Method and frequency of filing and payment

    Time required to comply with 3 major taxes (hours per year)

  • Collecting information, computing tax payable

  • Preparing separate tax accounting books, if required

  • Completing tax return, filing with agencies

  • Arranging payment or withholding

    Total tax and contribution rate (% of commercial profits)

  • Profit or corporate income tax

  • Social contributions, labor taxes paid by employer

  • Property and property transfer taxes

  • Dividend, capital gains, financial transactions taxes

  • Waste collection, vehicle, road and other taxes

    Postfiling Index

  • Time to comply with VAT refund (hours)

  • Time to obtain VAT refund (weeks)

  • Time to comply with a corporate income tax correction (hours)

  • Time to complete a corporate income tax correction (weeks)

Using a case scenario, Doing Business records taxes and mandatory contributions a medium size company must pay in a year, and measures the administrative burden of paying taxes, contributions and dealing with postfiling processes. Information is also compiled on frequency of filing and payments, time taken to comply with tax laws, time taken to comply with the requirements of postfiling processes and time waiting.

To make data comparable across economies, several assumptions are used:

  • TaxpayerCo is a medium-size business that started operations on January 1, 2017. It produces ceramic flowerpots and sells them at retail. All taxes and contributions recorded are paid in the second year of operation (calendar year 2018). Taxes and mandatory contributions are measured at all levels of government.

    The VAT refund process:

  • In June 2018, TaxpayerCo. makes a large capital purchase: the value of the machine is 65 times income per capita of the economy. Sales are equally spread per month (1,050 times income per capita divided by 12) and cost of goods sold are equally expensed per month (875 times income per capita divided by 12). The machinery seller is registered for VAT and excess input VAT incurred in June will be fully recovered after four consecutive months if the VAT rate is the same for inputs, sales and the machine and the tax reporting period is every month. Input VAT will exceed Output VAT in June 2018.

    The corporate income tax audit process:

  • An error in calculation of income tax liability (for example, use of incorrect tax depreciation rates, or incorrectly treating an expense as tax deductible) leads to an incorrect income tax return and a corporate income tax underpayment. TaxpayerCo. discovered the error and voluntarily notified the tax authority. The value of the underpaid income tax liability is 5% of the corporate income tax liability due. TaxpayerCo. submits corrected information after the deadline for submitting the annual tax return, but within the tax assessment period.

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Paying Taxes – New Zealand

Indicator

New Zealand

OECD high income

Best Regulatory Performance

Payments (number per year)

7

10.3

3 (2 Economies)

Time (hours per year)

140

158.8

49 (3 Economies)

Total tax and contribution rate (% of profit)

34.6

39.9

26.1 (33 Economies)

Postfiling index (0-100)

96.9

86.7

None in 2018/19

Figure – Paying Taxes in New Zealand – Score

image

93.3

image

85.9

image

88.0

image

96.9

Payments

Time

Total tax and contribution rate

Postfiling index

Figure – Paying Taxes in New Zealand and comparator economies – Ranking and Score

DB 2020 Paying Taxes Score

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0 100

94.6: Ireland (Rank: 4)

91.0: New Zealand (Rank: 9)

88.1: Canada (Rank: 19)

85.7: Australia (Rank: 28)

84.3: Regional Average (OECD high income)

82.2: Germany (Rank: 46)

Note: The ranking of economies on the ease of paying taxes is determined by sorting their scores for paying taxes. These scores are the simple average of the scores for each of the component indicators, with a threshold and a nonlinear transformation applied to one of the component indicators, the total tax and contribution rate. The threshold is defined as the total tax and contribution rate at the 15th percentile of the overall distribution for all years included in the analysis up to and including Doing Business 2015, which is 26.1%. All economies with a total tax and contribution rate below this threshold receive the same score as the economy at the threshold.

Figure – Paying Taxes in New Zealand and comparator economies – Measure of Quality

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96.9

95.3

97.7

93.4

86.7

73.2

120

Index score

100

80

60

40

20

0

New Zealand

Australia Canada Germany Ireland OECD

high income

Details – Paying Taxes in New Zealand

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Tax or Payments

mandatory (number) contribution

Notes on Payments

Time (hours)

Statutory tax rate

Tax base

Total tax and contribution rate (% of profit)

Notes on TTCR

Corporate 1.0

income tax

online

34.0

0.28

taxable income

29.88

Employer paid – 1.0

Accident compensation corporation (ACC) levy

online

59.0

various rates

gross salaries

2.27

Road user 1.0

charges

various rates

vehicle weight

1.71

Tax on interest 0.0

0.28

interest income

0.72

not included

Employer paid – 1.0

Fringe benefit tax

42.86% for employees, 49.25% for shareholders

fringe benefit

0.56

Property tax 1.0

various rates

land value

0.21

Fuel tax 1.0

0.53 cents/litre

included into fuel price

0.00

small amount

GST (VAT) 1.0

online

47.0

0.15

value added

0.00

not included

Totals 7

140

34.6

Details – Paying Taxes in New Zealand – Tax by Type

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Taxes by type

Answer

Profit tax (% of profit)

29.9

Labor tax and contributions (% of profit)

2.8

Other taxes (% of profit)

1.9

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Details – Paying Taxes in New Zealand – Measure of Quality

Answer

Score

Postfiling index (0-100)

96.9

VAT refunds

Does VAT exist?

Yes

Does a VAT refund process exist per the case study?

Yes

Restrictions on VAT refund process

none

Percentage of cases exposed to a VAT audit (%)

0% – 24%

Is there a mandatory carry forward period?

No

Time to comply with VAT refund (hours)

2.0

96.0

Time to obtain VAT refund (weeks)

5.0

96.2

Corporate income tax audits

Does corporate income tax exist?

Yes

Percentage of cases exposed to a corporate income tax audit (%)

0% – 24%

Time to comply with a corporate income tax correction (hours)

4.0

95.4

Time to complete a corporate income tax correction (weeks)

No tax audit per case study scenario

100

Notes: Names of taxes have been standardized. For instance income tax, profit tax, tax on company's income are all named corporate income tax in this table. The hours for VAT include all the VAT and sales taxes applicable.

The hours for Social Security include all the hours for labor taxes and mandatory contributions in general.

The postfiling index is the average of the scores on time to comply with VAT refund, time to obtain a VAT refund, time to comply with a corporate income tax correction and time to complete a corporate income tax correction.

N/A = Not applicable.

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Trading across Borders

Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tariffs) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

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What the indicators measure

Case study assumptions

Documentary compliance

  • Obtaining, preparing and submitting documents during transport, clearance, inspections and port or border handling in origin economy

  • Obtaining, preparing and submitting documents required by destination economy and any transit economies

  • Covers all documents required by law and in practice, including electronic submissions of information

    Border compliance

  • Customs clearance and inspections

  • Inspections by other agencies (if applied to more than 20% of shipments)

  • Handling and inspections that take place at the economy’s port or border

    Domestic transport

  • Loading or unloading of the shipment at the warehouse or port/border

  • Transport between warehouse and port/border

  • Traffic delays and road police checks while shipment is en route

To make the data comparable across economies, a few assumptions are made about the traded goods and the transactions:

Time: Time is measured in hours, and 1 day is 24 hours (for example, 22 days are recorded as 22×24=528 hours). If customs clearance takes 7.5 hours, the data are recorded as is. Alternatively, suppose documents are submitted to a customs agency at 8:00a.m., are processed overnight and can be picked up at 8:00a.m. the next day. The time for customs clearance would be recorded as 24 hours because the actual procedure took 24 hours.

Cost: Insurance cost and informal payments for which no receipt is issued are excluded from the costs recorded. Costs are reported in U.S. dollars. Contributors are asked to convert local currency into U.S. dollars based on the exchange rate prevailing on the day they answer the questionnaire. Contributors are private sector experts in international trade logistics and are informed about exchange rates.

Assumptions of the case study:

  • For all 190 economies covered by Doing Business, it is assumed a shipment is in a warehouse in the largest business city of the exporting economy and travels to a warehouse in the largest business city of the importing economy.

  • It is assumed each economy imports 15 metric tons of containerized auto parts (HS 8708) from its natural import partner—the economy from which it imports the largest value (price times quantity) of auto parts. It is assumed each economy exports the product of its comparative advantage (defined by the largest export value) to its natural export partner—the economy that is the largest purchaser of this product. Shipment value is assumed to be $50,000.

  • The mode of transport is the one most widely used for the chosen export or import product and the trading partner, as is the seaport or land border crossing.

  • All electronic information submissions requested by any government agency in connection with the shipment are considered to be documents obtained, prepared and submitted during the export or import process.

  • A port or border is a place (seaport or land border crossing) where merchandise can enter or leave an economy.

  • Relevant government agencies include customs, port authorities, road police, border guards, standardization agencies, ministries or departments of agriculture or industry, national security agencies and any other government authorities.

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Trading across Borders – New Zealand

Indicator

New Zealand

OECD high income

Best Regulatory Performance

Time to export: Border compliance (hours)

37

12.7

1 (19 Economies)

Cost to export: Border compliance (USD)

337

136.8

0 (19 Economies)

Time to export: Documentary compliance (hours)

3

2.3

1 (26 Economies)

Cost to export: Documentary compliance (USD)

67

33.4

0 (20 Economies)

Time to import: Border compliance (hours)

25

8.5

1 (25 Economies)

Cost to import: Border compliance (USD)

367

98.1

0 (28 Economies)

Time to import: Documentary compliance (hours)

1

3.4

1 (30 Economies)

Cost to import: Documentary compliance (USD)

80

23.5

0 (30 Economies)

Figure – Trading across Borders in New Zealand – Score

Time

Cost

Time

Cost

Time

Cost

Time

Cost

to

to

to

to

to

to

to

to

export:

export:

export:

export:

import:

import:

import:

import:

Border

Border

Documentary

Documentary

Border

Border

Documentary

Documentary

compliance

compliance

compliance

compliance

compliance

compliance

compliance

compliance

Figure – Trading across Borders in New Zealand and comparator economies – Ranking and Score

image

77.4

image

68.2

image

98.8

image

83.3

image

91.4

image

69.5

image

100.0

image

88.6

DB 2020 Trading Across Borders Score

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0 100

94.3: Regional Average (OECD high income)

91.8: Germany (Rank: 42)

88.4: Canada (Rank: 51)

87.2: Ireland (Rank: 52)

84.6: New Zealand (Rank: 63)

70.3: Australia (Rank: 106)

Note: The ranking of economies on the ease of trading across borders is determined by sorting their scores for trading across borders. These scores are the simple average of the scores for the time and cost for documentary compliance and border compliance to export and import.

Figure – Trading across Borders in New Zealand – Time and Cost

image

37

367

337

25

67

80

3

1

image

40

35

Time (hours)

30

25

20

15

10

5

0

Export

image

Export

Time (hours) Cost (USD)

Import

Import

400

350

Cost (USD)

300

250

200

150

100

50

0

Border Compliance

Documentary Compliance

Border Compliance

Documentary Compliance

Details – Trading across Borders in New Zealand

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Characteristics

Export

Import

Product

HS 04 : Dairy prod; birds' eggs; natural honey

HS 8708: Parts and accessories of motor vehicles

Trade partner

China

Australia

Border

Auckland port

Auckland port

Distance (km)

3

3

Domestic transport time (hours)

1

1

Domestic transport cost (USD)

290

262

Details – Trading across Borders in New Zealand – Components of Border Compliance

Time to Complete (hours)

Associated Costs (USD)

Export: Clearance and inspections required by customs authorities

1.0

67.0

Export: Clearance and inspections required by agencies other than customs

0.0

0.0

Export: Port or border handling

36.0

270.0

Import: Clearance and inspections required by customs authorities

1.0

63.0

Import: Clearance and inspections required by agencies other than customs

0.0

0.0

Import: Port or border handling

24.0

303.5

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Details – Trading across Borders in New Zealand – Trade Documents

image

Export

Import

Commercial invoice Commercial invoice

Packing list Packing list

Bill of lading Bill of lading

Health permit Certificate of origin

Export customs declaration Import customs declaration

SOLAS certificate SOLAS certificate

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Enforcing Contracts

The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local first-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and efficiency in the court system. The most recent round of data collection was completed in May 2019. See the methodology for more information.

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What the indicators measure

Case study assumptions

Time required to enforce a contract through the courts (calendar days)

  • Time to file and serve the case

  • Time for trial and to obtain the judgment

  • Time to enforce the judgment

    Cost required to enforce a contract through the courts (% of claim value)

  • Average attorney fees

  • Court costs

  • Enforcement costs

    Quality of judicial processes index (0-18)

  • Court structure and proceedings (-1-5)

  • Case management (0-6)

  • Court automation (0-4)

  • Alternative dispute resolution (0-3)

The dispute in the case study involves the breach of a sales contract between two domestic businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes the case from simple debt enforcement.

To make the data on the time and comparable across economies, several assumptions about the case are used:

  • The dispute concerns a lawful transaction between two businesses (Seller and Buyer), both located in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.

  • The Buyer orders custom-made furniture, then fails to pay alleging that the goods are not of adequate quality.

  • The value of the dispute is 200% of the income per capita or the equivalent in local currency of USD 5,000, whichever is greater.

  • The Seller sues the Buyer before the court with jurisdiction over commercial cases worth 200% of income per capita or $5,000 whichever is greater.

  • The Seller requests the pretrial attachment of the defendant’s movable assets to secure the claim.

  • The claim is disputed on the merits because of Buyer’s allegation that the quality of the goods was not adequate.

  • The judge decides in favor of the seller; there is no appeal.

  • The Seller enforces the judgment through a public sale of the Buyer’s movable assets.

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Standardized Case

Claim value NZD 116,836

Enforcing Contracts – New Zealand

image

City Covered Auckland

image

Court name Auckland District Court

Indicator

New Zealand

OECD high income

Best Regulatory Performance

Time (days)

216

589.6

120 (Singapore)

Cost (% of claim value)

27.2

21.5

0.1 (Bhutan)

Quality of judicial processes index (0-18)

9.5

11.7

None in 2018/19

Figure – Enforcing Contracts in New Zealand – Score

image

92.1

image

69.5

image

52.8

Time

Cost

Quality of judicial processes index

Figure – Enforcing Contracts in New Zealand and comparator economies – Ranking and Score

DB 2020 Enforcing Contracts Score

image

0 100

79.0: Australia (Rank: 6)

74.1: Germany (Rank: 13)

71.5: New Zealand (Rank: 23)

67.8: Regional Average (OECD high income)

57.9: Ireland (Rank: 91)

57.1: Canada (Rank: 100)

Note: The ranking of economies on the ease of enforcing contracts is determined by sorting their scores for enforcing contracts. These scores are the simple average of the scores for each of the component indicators.

Figure – Enforcing Contracts in New Zealand – Time and Cost

1000

Time (days)

800

600

400

200

Time (days) Cost (% of claim value)

image

910

26.9

27.2

23.2

22.3

21.5

650

589.6

499

14.4

402

216

image

image

Cost (% of claim value)

30

25

20

15

10

5

0

Australia Canada Germany Ireland New

Zealand

0

OECD

high income

Figure – Enforcing Contracts in New Zealand and comparator economies – Measure of Quality

image

image

image

2

3

1.5

3

2.5

5.5

3

4.5

2

2

3

4

3

1.5

3.5

4.5

2.5

1 0.5

4.5

2.5

3.2

2.4

3.6

New Zealand

Australia

Canada

Germany

Ireland

OECD high income

0 2 4 6 8 10 12 14 16 18

Sub-Indicator Score

image

image

image

image

Alternative dispute resolution (0-3) Case management (0-6) Court automation (0-4) Court structure and proceedings (-1-5)

Details – Enforcing Contracts in New Zealand

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Indicator

Time (days) 216

Trial and judgment 167

Filing and service 7

Cost (% of claim value) 27.2

Enforcement of judgment 42

Court fees 2

Attorney fees 22

Quality of judicial processes index (0-18) 9.5

Enforcement fees 3.2

Case management (0-6) 3.0

Court structure and proceedings (-1-5) 3.0

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Alternative dispute resolution (0-3) 2.0

Court automation (0-4) 1.5

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Details – Enforcing Contracts in New Zealand – Measure of Quality

Answer

Score

Quality of judicial processes index (0-18)

9.5

Court structure and proceedings (-1-5)

3.0

1. Is there a court or division of a court dedicated solely to hearing commercial cases?

No

0.0

2. Small claims court

1.5

2.a. Is there a small claims court or a fast-track procedure for small claims?

Yes

2.b. If yes, is self-representation allowed?

Yes

3. Is pretrial attachment available?

Yes

1.0

4. Are new cases assigned randomly to judges?

Yes, but manual

0.5

5. Does a woman's testimony carry the same evidentiary weight in court as a man's?

Yes

0.0

Case management (0-6)

3.0

1. Time standards

1.0

1.a. Are there laws setting overall time standards for key court events in a civil case?

Yes

1.b. If yes, are the time standards set for at least three court events?

Yes

1.c. Are these time standards respected in more than 50% of cases?

Yes

2. Adjournments

0.0

2.a. Does the law regulate the maximum number of adjournments that can be granted?

No

2.b. Are adjournments limited to unforeseen and exceptional circumstances?

No

2.c. If rules on adjournments exist, are they respected in more than 50% of cases?

n.a.

3. Can two of the following four reports be generated about the competent court: (i) time to disposition report; (ii) clearance rate report; (iii) age of pending cases report; and (iv) single case progress report?

Yes

1.0

4. Is a pretrial conference among the case management techniques used before the competent court?

Yes

1.0

5. Are there any electronic case management tools in place within the competent court for use by judges?

No

0.0

6. Are there any electronic case management tools in place within the competent court for use by lawyers?

No

0.0

Court automation (0-4)

1.5

1. Can the initial complaint be filed electronically through a dedicated platform within the competent court?

No

0.0

2. Is it possible to carry out service of process electronically for claims filed before the competent court?

Yes

1.0

3. Can court fees be paid electronically within the competent court?

No

0.0

4. Publication of judgments

0.5

4.a Are judgments rendered in commercial cases at all levels made available to the general public through publication in official gazettes, in newspapers or on the internet or court website?

No

4.b. Are judgments rendered in commercial cases at the appellate and supreme court level made available to the general public through publication in official gazettes, in newspapers or on the internet or court website?

Yes

Alternative dispute resolution (0-3)

2.0

1. Arbitration

1.5

1.a. Is domestic commercial arbitration governed by a consolidated law or consolidated chapter or section of the applicable code of civil procedure encompassing substantially all its aspects?

Yes

1.b. Are there any commercial disputes—aside from those that deal with public order or public policy— that cannot be submitted to arbitration?

No

1.c. Are valid arbitration clauses or agreements usually enforced by the courts?

Yes

2. Mediation/Conciliation 0.5

image

2.b. Are mediation, conciliation or both governed by a consolidated law or consolidated chapter or

section of the applicable code of civil procedure encompassing substantially all their aspects (for example, definition, aim and scope of application, desig

No

2.a. Is voluntary mediation or conciliation available? Yes

2.c. Are there financial incentives for parties to attempt mediation or conciliation (i.e., if mediation or No conciliation is successful, a refund of court filing fees, income tax credits or the like)?

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Resolving Insolvency

Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection was completed in May 2019. See the methodology for more information.

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What the indicators measure

Case study assumptions

Time required to recover debt (years)

  • Measured in calendar years

  • Appeals and requests for extension are included

    Cost required to recover debt (% of debtor’s estate)

  • Measured as percentage of estate value

  • Court fees

  • Fees of insolvency administrators

  • Lawyers’ fees

  • Assessors’ and auctioneers’ fees

  • Other related fees

    To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are used:

    • A hotel located in the largest city (or cities) has 201 employees and 50 suppliers. The hotel experiences financial difficulties.

    • The value of the hotel is 100% of the income per capita or the equivalent in local currency of USD 200,000, whichever is greater.

    • The hotel has a loan from a domestic bank, secured by a mortgage over the hotel’s real estate. The hotel cannot pay back the loan, but makes enough money to operate otherwise.

    In addition, Doing Business evaluates the quality of legal framework applicable to judicial liquidation and reorganization proceedings and the extent to which best insolvency practices have been implemented in each economy covered.

    Outcome

  • Whether business continues operating as a going concern or business assets are sold piecemeal

    Recovery rate for creditors

  • Measures the cents on the dollar recovered by secured creditors

  • Outcome for the business (survival or not) determines the maximum value that can be recovered

  • Official costs of the insolvency proceedings are deducted

  • Depreciation of furniture is taken into account

  • Present value of debt recovered

    Strength of insolvency framework index (0- 16)

  • Sum of the scores of four component indices:

  • Commencement of proceedings index (0-3)

  • Management of debtor’s assets index (0-6)

  • Reorganization proceedings index (0-3)

  • Creditor participation index (0-4)

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Indicator

New Zealand

OECD high income

Best Regulatory Performance

Recovery rate (cents on the dollar)

79.7

70.2

92.9 (Norway)

Resolving Insolvency – New Zealand

image

Cost (% of estate)

3.5

9.3

1.0 (Norway)

Time (years) 1.3 1.7 0.4 (Ireland)

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Figure – Resolving Insolvency in New Zealand – Score

image

Strength of insolvency framework index (0-16)

8.5

11.9

None in 2018/19

Outcome (0 as piecemeal sale and 1 as going concern) 1 .. ..

image

85.8

image

53.1

Recovery rate Strength of insolvency framework index

Figure – Resolving Insolvency in New Zealand and comparator economies – Ranking and Score

DB 2020 Resolving Insolvency Score

image

0 100

89.8: Germany (Rank: 4)

81.0: Canada (Rank: 13)

79.2: Ireland (Rank: 19)

78.9: Australia (Rank: 20)

74.9: Regional Average (OECD high income)

69.5: New Zealand (Rank: 36)

Note: The ranking of economies on the ease of resolving insolvency is determined by sorting their scores for resolving insolvency. These scores are the simple average of the scores for the recovery rate and the strength of insolvency framework index.

Figure – Resolving Insolvency in New Zealand – Time and Cost

1.8

1.6

Time (years)

1.4

1.2

1

0.8

0.6

0.4

0.2

0

Time (years) Cost (% of estate)

image

9.0

1.7

9.3

8.0

8.0

7.0

1.2

1.3

1.0

0.8

3.5

0.4

image

image

Australia Canada Germany Ireland New

Zealand

10

Cost (% of estate)

8

6

4

2

0

OECD

high income

Figure – Resolving Insolvency in New Zealand and comparator economies – Measure of Quality

New Zealand

Australia

Canada

Germany

Ireland

OECD high income

image

image

3

3

2

0.5

5

2.5

3

0.5

4.5

2.5

3

1

6

3

3

3

5

3

1

1.5

5.3

2.8

2.1

1.9

0 2 4 6 8 10 12 14 16

Sub-Indicator Score

image

image

image

image

Management of debtor's assets index (0-6) Commencement of proceedings index (0-3) Creditor participation index (0-4) Reorganization proceedings index (0-3)

Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice.”

Figure – Resolving Insolvency in New Zealand and comparator economies – Recovery Rate

image

86.7

86.1

82.7

79.7

79.8

70.2

Recovery rate(cents on the dollar)

90

85

80

75

70

65

60

New Zealand Australia Canada Germany Ireland OECD high income

Details – Resolving Insolvency in New Zealand

image

Indicator

Answer

Score

Proceeding

receivership

BizBank will want to protect its position as a secured creditor and enforce its rights as quickly as possible. Even if the hotel wants to begin reorganization proceedings, BizBank as a secured creditor will also likely be able to appoint a

receiver of the assets of Mirage.

image

Time (in years)

1.3

The time to complete receivership in a case similar to the case study will be approximately equal to 16 months. Most of the time will be spent on overseeing the management of the hotel, ensuring that the debts arising after the appointment of the receiver are met, conducting any kind of due diligence, appointment of selling agents and letting

them find potential buyers.

Outcome going concern A receiver will sell the business as a going concern to maximize the returns.

image

Recovery rate

(cents on the dollar)

79.7

Cost (% of estate) 3.5 The total cost of the proceedings will amount to approximately 3.5% of the value of the hotel. The majority of the expenses are attributed to attorney's fees (1.5%) and receiver's remuneration (2%). Other expenses are minimal.

image

Details – Resolving Insolvency in New Zealand – Measure of Quality

Answer

Score

Strength of insolvency framework index (0-16)

8.5

Commencement of proceedings index (0-3)

3.0

What procedures are available to a DEBTOR when commencing insolvency proceedings?

(a) Debtor may file for both liquidation and reorganization

1.0

Does the insolvency framework allow a CREDITOR to file for insolvency of the debtor?

(a) Yes, a creditor may file for both liquidation and reorganization

1.0

What basis for commencement of the insolvency proceedings is allowed under the insolvency framework? (a) Debtor is generally unable to pay its debts as they mature (b) The value of debtor's liabilities exceeds the value of its assets

(a) Debtor is generally unable to pay its debts as they mature

1.0

Management of debtor's assets index (0-6)

3.0

Does the insolvency framework allow the continuation of contracts supplying essential goods and services to the debtor?

No

0.0

Does the insolvency framework allow the rejection by the debtor of overly burdensome contracts?

Yes

1.0

Does the insolvency framework allow avoidance of preferential transactions?

Yes

1.0

Does the insolvency framework allow avoidance of undervalued transactions?

Yes

1.0

Does the insolvency framework provide for the possibility of the debtor obtaining credit after commencement of insolvency proceedings?

No

0.0

Does the insolvency framework assign priority to post-commencement credit?

(c) No priority is assigned to post- commencement creditors

0.0

Reorganization proceedings index (0-3)

0.5

Which creditors vote on the proposed reorganization plan?

(a) All creditors

0.5

Does the insolvency framework require that dissenting creditors in reorganization receive at least as much as what they would obtain in a liquidation?

No

0.0

Are the creditors divided into classes for the purposes of voting on the reorganization plan, does each class vote separately and are creditors in the same class treated equally?

No

0.0

Creditor participation index (0-4)

2.0

Does the insolvency framework require approval by the creditors for selection or appointment of the insolvency representative?

Yes

1.0

Does the insolvency framework require approval by the creditors for sale of substantial assets of the debtor?

No

0.0

Does the insolvency framework provide that a creditor has the right to request information from the insolvency representative?

No

0.0

Does the insolvency framework provide that a creditor has the right to object to decisions accepting or rejecting creditors' claims?

Yes

1.0

Note:

Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice.”

Employing Workers

Doing Business presents detailed data for the employing workers indicators on the Doing Business website (http://www.doingbusiness.org). The study does not present rankings of economies on these indicators or include the topic in the aggregate ease of doing business score or ranking on the ease of doing business.

The most recent round of data collection was completed in May 2019. See the methodology for more information.

What the indicators measure

Hiring

(i) whether fixed-term contracts are prohibited for permanent tasks; (ii) maximum cumulative duration of fixed-term contracts;

(iii) length of the maximum probationary period; (iv) minimum wage;(v) ratio of minimum wage to the average value added per worker.

Working hours

(i) maximum number of working days allowed per week; (ii) premiums for work: at night, on a weekly rest day and overtime;

(iii) whether there are restrictions on work at night, work on a weekly rest day and for overtime work; (iv) length of paid annual leave.

Redundancy rules

(i) whether redundancy can be basis for terminating workers; (ii) whether employer needs to notify and/or get approval from third party to terminate 1 redundant worker and a group of 9 redundant workers; (iii) whether the law requires employer to reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment.

To make the data comparable across economies, several assumptions about the worker and the business are used.

The worker:

  • Is a cashier in a supermarket or grocery store, age 19, with one year of work experience.

  • Is a full-time employee.

  • Is not a member of the labor union, unless membership is mandatory.

    The business:

  • Is a limited liability company (or the equivalent in the economy).

  • Operates a supermarket or grocery store in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.

  • Has 60 employees.

  • Is subject to collective bargaining agreements if such agreements cover more than 50% of the food retail sector and they apply even to firms that are not party to them.

  • Abides by every law and regulation but does not grant workers more benefits than those mandated by law, regulation or (if applicable) collective bargaining agreements.

Redundancy cost

(i) notice period for redundancy dismissal; (ii) severance payments, and (iii) penalties due when terminating a redundant worker. Data on the availability of unemployment protection for a worker with one year of employment is also collected.

Employing Workers – New Zealand

Details – Employing Workers in New Zealand

Hiring

Fixed-term contracts prohibited for permanent tasks? No

Maximum length of a single fixed-term contract (months) No limit

Maximum length of fixed-term contracts, including renewals (months) No limit

Minimum wage applicable to the worker assumed in the case study (US$/month) 2115.4

Maximum length of probationary period (months) 3.0

Ratio of minimum wage to value added per worker 0.4

Working hours

Standard workday 8.0

Maximum number of working days per week 7.0

Premium for night work (% of hourly pay) 0.0

Premium for work on weekly rest day (% of hourly pay) 0.0

Premium for overtime work (% of hourly pay) 0.0

Restrictions on night work? No

Restrictions on weekly holiday? No

Restrictions on overtime work? No

Paid annual leave for a worker with 1 year of tenure (working days) 20.0

Paid annual leave for a worker with 5 years of tenure (working days) 20.0

Paid annual leave for a worker with 10 years of tenure (working days) 20.0

Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 20.0

Redundancy rules

Dismissal due to redundancy allowed by law? Yes

Third-party notification if one worker is dismissed? No

Third-party approval if one worker is dismissed? No

Third-party notification if nine workers are dismissed? No

Third-party approval if nine workers are dismissed? No

Retraining or reassignment obligation before redundancy? Yes

Priority rules for redundancies? No

Priority rules for reemployment? No

Redundancy cost

Notice period for redundancy dismissal for a worker with 1 year of tenure (weeks of salary) 0.0

Notice period for redundancy dismissal for a worker with 5 years of tenure (weeks of salary) 0.0

Notice period for redundancy dismissal for a worker with 10 years of tenure (weeks of salary) 0.0

Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure, in weeks of salary) 0.0

Severance pay for redundancy dismissal for a worker with 1 year of tenure (weeks of salary) 0.0

Severance pay for redundancy dismissal for a worker with 5 years of tenure (weeks of salary) 0.0

Severance pay for redundancy dismissal for a worker with 10 years of tenure (weeks of salary) 0.0

Unemployment protection after one year of employment? Yes

Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure, in weeks of salary) 0.0

PEO New Zealand

New Zealand stands out as an attractive destination for businesses considering a Professional Employer Organization (PEO) arrangement. With its stable economy, business-friendly regulations, and skilled workforce, New Zealand offers a conducive environment for companies looking to expand their operations. As a PEO country, New Zealand provides streamlined solutions for managing human resources, payroll, and compliance, allowing organizations to focus on their core activities while leaving administrative complexities in capable hands. The country’s commitment to innovation and its strategic location in the Asia-Pacific region further enhance its appeal. Whether seeking to establish a presence or tap into local talent, New Zealand’s PEO services offer a gateway to growth in a vibrant and dynamic market.

PEO services, or Professional Employer Organization services, play a pivotal role in simplifying the complexities of human resource management in New Zealand. With its intricate labor laws, diverse workforce, and ever-evolving regulatory landscape, New Zealand’s business environment can be challenging for companies aiming to establish a presence. PEO services offer a strategic solution by providing comprehensive HR outsourcing, including payroll, benefits administration, tax compliance, and employee relations. By partnering with a PEO, businesses can focus on their core activities while the PEO handles essential HR tasks, ensuring legal compliance and seamless operations. This collaborative approach not only streamlines operations but also enables companies to navigate the nuances of New Zealand’s employment landscape with confidence and efficiency.

Business Reforms in New Zealand

From May 2, 2018 to May 1, 2019, 115 economies implemented 294 business regulatory reforms across the 10 areas measured by Doing Business. Reforms inspired by

Doing Business have been implemented by economies in all regions. The following are reforms implemented since Doing Business 2008.

=Doing Business reform making it easier to do business. = Change making it more difficult to do business.

DB2019

Starting a Business: New Zealand made starting a business less expensive by reducing the fees for name search and company incorporation.

DB2018

Paying Taxes: New Zealand made paying taxes easier by improving the online portal for filing and paying general sales tax.

Enforcing Contracts: New Zealand made enforcing contracts more difficult by suspending the filing of new commercial cases before the Commercial List of the High Court of New Zealand during the establishment of a new Commercial Panel.

DB2017

Paying Taxes: New Zealand made paying taxes easier by abolishing the cheque levy. New Zealand made paying less costly by decreasing the rate of accident compensation levy paid by employers. At the same time, New Zealand made paying taxes more costly by raising property tax and road user levy rates.

DB2016

Getting Electricity: The utility in New Zealand reduced the time required for getting an electricity connection by improving its payment monitoring and confirmation process for the connection works.

DB2015

Getting Credit: New Zealand improved access to credit information by beginning to distribute both positive and negative credit information.

DB2014

Enforcing Contracts: New Zealand made enforcing contracts easier by improving its case management system to ensure a speedier and less costly adjudication of cases.

DB2013

Getting Credit: New Zealand improved access to credit information by allowing credit bureaus to collect positive information on individuals.

DB2012

Paying Taxes: New Zealand reduced its corporate income tax rate and fringe benefit tax rate.

DB2011

Enforcing Contracts: New Zealand enacted new district court rules that make the process for enforcing contracts user friendly.

DB2010

Dealing with Construction Permits: New Zealand made dealing with construction permits more costly by raising fees.

DB2009

Starting a Business: New Zealand made starting a business easier by making it possible to complete the process in one simple online registration in less than a day.

Paying Taxes: New Zealand made paying taxes less costly for companies by reducing the corporate income tax rate.

Resolving Insolvency: New Zealand introduced a reorganization procedure with the aim of providing an alternative to liquidation and receivership and maximizing a company’s chances of continuing as a going concern.

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