What you need to know about buying a business

New Zealand is the easiest country in the world to run a business in, according to the World Bank's Doing Business report.

We are placed ahead of powerhouses like Singapore, the US, the UK, Denmark and Hong Kong, thanks to the elegant simplicity of business regulation and tax in our country.

Despite that fortunate fact, there is still plenty to know about the process of buying a business in New Zealand from abroad. With some basic advice in mind, however, investing could be easier here than anywhere else in the world.
 

Overseas investment consent 

When buying a business in New Zealand from overseas you will require consent from the government if the value of the investment is over $100 million, or if it involves the purchase of sensitive land. This includes:
●    Non-urban land over five hectares,
●    Land on an island,
●    Foreshore or seabed,
●    Land held for conservation purposes,
●    Historic land, and
●    Land subject to a proposed district plan, or heritage order.

There are countless businesses available for sale in New Zealand, small and large, that do not come under this criteria.

 

Buying a business in NZ

 

Set up tax numbers and a bank account

You should always ensure you carry out proper due diligence when buying a business in New Zealand.

The next thing you'll need to do is set up a New Zealand Inland Revenue Department (IRD) number, and bank account. These are both essential when buying a business in New Zealand but they shouldn't be difficult to organise. Your first call should be to the IRD.

They'll get you started getting a your own IRD number, by filling out an application form. You may discover that you'll also need a to register for GST, and register as an employer.

Last of all you might also have to complete a customer due diligence check as part of the process, to ensure your business is not breaking any New Zealand laws. Speak to the IRD to confirm. 

To complete these step you'll need to open a New Zealand bank account and you may need to know details of the business you're buying.

 

Get help from the experts

You should always ensure you carry out proper due diligence when buying a business in New Zealand.

To do so you'll need the help of professionals with experience doing just that.

Your first hires should be an accountant and a lawyer. Xero NZ recommends only selecting a chartered accountant, from a reputable firm, who has relevant experience .

When it comes to choosing a lawyer, again go for a professional from a reputable firm, who has dealt with similar business purchases in the past. Before hiring, always check that they're registered to practice. You can do so by searching the register of lawyers online at the New Zealand Law Society website. 

Complete your due diligence

At minimum your due diligence should check the following, according to the Ministry of Business Innovation and Employment:
●    Pending court cases or legal disputes.
●    That the business owns its assets.
●    All existing contracts with employees, suppliers, buyers and landlords.
●    Information about key staff - are they going to stay following the sale?
●    Financial history. 

Additional to that your accountant should go over the books before you make an offer to asses levels of stock, areas for improvement, business trends and financial forecasts. If you're careful, follow New Zealand's law and get the expert help you need, buying a business in New Zealand could be the best investment you've ever made.
To start searching for opportunities visit realestate.co.nz - New Zealand's biggest online library of businesses for sale.

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