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Overview of New Zealand

New Zealand is a country with many advantages for investors. New Zealand has a stable economic base that is well set up for long term international competitiveness. This article will give you insight into New Zealand.
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New Zealand has a population of approximately 5,000,000 with more than 75% of New Zealanders living in the North Island and approximately 30% of New Zealanders living in the area comprising greater Auckland.

Exchange System

New Zealand has as its base monetary unit – the New Zealand dollar. The dollar has a floating exchange rate and there are no restrictions on the amount of funds which may be brought into or taken out of New Zealand.


New Zealand is a parliamentary democracy with power highly centralised in a one-chamber Parliament in the capital city of Wellington. General elections are held every three years under a “mixed member proportional” representation system.
Almost all legislation relating to the conduct of business and the operation of companies in New Zealand is enacted by Parliament and administered by Government agencies. As New Zealand is not a federal state, all legislation is passed by a single body, the House of Representatives, which is the highest law-making body in the country.

Second tier Government also operates in New Zealand, in the form of a number of territorial and local authorities. The members of these organisations are also democratically elected on a regular basis. However the national political parties do not play a significant role in the Local Government process other than in enacting statutory reforms relating to Local Government.

Most of these Local Government organisations have the power to raise their own money and set and collect their own rates and levies. Generally these bodies do not play a large role in the governing of the economy, but specific business proposals may require planning, environmental or building consent. As such, businesses often have to deal with Local Government requirements as well.

Banking and Finance

The Reserve Bank of New Zealand is New Zealand’s central bank. The three main functions of the Reserve Bank are:

  • the operation of monetary policy to maintain price stability;
  • the promotion and maintenance of a sound and efficient financial system; and
  • meeting the currency needs of the public.

Following a significant deregulation in the banking sector, New Zealand has maintained a relatively open policy on the entry of new registered banks into the market place. Banking licences are now available to any banking organisation that can demonstrate banking expertise and that has a good standing in the financial community.
The largest of the commercial trading banks in New Zealand are owned by foreign banking organisations with the largest number being owned by Australian banking organisations.

Most commercial banking services are still provided by the commercial trading banks and these banks offer the usual range of banking and business services such as letters of credit, bills of exchange, commercial bill facilities, term loans and forward exchange dealing facilities.

Financial Markets

NZX’s three securities markets are the NZSX (New Zealand Stock Market), the NZDX (New Zealand Debt Market) and the NZAX (New Zealand Alternative Market). These markets form a diverse offering for companies wishing to raise capital and for investors looking for secure investment products. These markets feature many of the nation’s most established and proven companies and offer new opportunities for emerging new companies and listed issuers.

The NZSX is home to many of New Zealand’s best known brands. Informally known in the past as the Main Board, the companies listed here stand out as symbols of success in their own right and as proof of the potential of local investment in the local market and beyond. They are the cornerstone companies of NZX and New Zealand’s economy.

The NZDX offers a range of investment securities including corporate and government bonds and fixed income securities. The goal for this market is to expand and grow the facility that already exists, providing companies and a broader spectrum of investors with more opportunities for investment diversification and growth.

The NZAX is tailor-made to facilitate growth and is specifically designed for fast-growing, developing companies, and companies with non-traditional structures (such as co-operatives) – all with a common need for market facilitation.

Keep reading our series about what it means to invest in New Zealand


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