Is this the most southerly start-up hub in the world? Quite possibly, but is it also the best? A series of incubators, accelerators programmes, networking events and investment schemes have been popping up in Wellington as of late...
- Population: 200,000
- Pros: Setting up a business is hassle free and cheap, there’s a great standard of living and it’s the least corrupt country in the world.
- Cons: The time it takes to get to the US and Europe is a big challenge to overcome, raising investment locally can also be tricky.
- Cost: Amazingly, there's no capital gains tax! That minor miracle aside, rent and other living costs are also favourable.
- What to expect: A friendly environment in which to do business alongside all the challenges that come with being based in such a southerly country.
To get a better understanding of what New Zealand has to offer start-ups we sat down with Linc Gasking and Derek Handley, both of which were able to offer some tips for anyone thinking of relocating their business. The former is co-director of Global Entrepreneurship Week and has over 20 years’ experience in start-ups, the latter is an entrepreneur, speaker and author who founded The B Team alongside Richard Branson and Jochen Zeitz.
What are best aspects of doing business in New Zealand?
Derek Handley (DH): Definitely that New Zealand is one of the most beautiful, friendly countries in the world! So it’s one of the most beautiful and friendly places to do business in the world and seeing the beach or the sea on your drive home from work is inspiring and rebalances you with nature and the important things in life. It’s a great equaliser to always remind yourself what’s important and the wonderful planet we all share. No one takes themselves too seriously either - which by default means that you can’t, which is always a good thing. In many global ‘capitals’ like New York or Hong Kong a lot of people take themselves awfully seriously and are viciously competitive to the detriment of common sense and good manners.
Linc Gasking (LG): There are some many positive from an innovative culture to a facilitative government and an international pool of talent with diverse skills with world class abilities. New Zealand is a country with a global outlook with multicultural cities which have a real personality and a sense of community. The lifestyle is incredible lifestyle due to some breath-taking scenery, while there’s the bonus of being in similar time zones to the US West Coast and Asia. It’s a good test market where visas are relatively easy for skilled talent and entrepreneurs, it’s also an easy place to setup a business and is the number one least corrupt country in the world.
How would you describe the business culture in New Zealand?
DH: It’s pretty much in line with general culture in New Zealand - laid back, creative, fun-loving and balanced. It’s also very accessible - so there are far fewer ‘layers’ or hierarchies.
New Zealand is also quite generalist, because we are too small to have lots and lots of corporate departments where people spend their whole lives getting very good at one thing, we end up creating really brilliant all-rounders who have to be good at lots of things.
We are less cut throat than many places, far less hectic and stressful than most major cities around the world and we are fortunate to not have to deal with a lot of the challenges that exist elsewhere like corruption and instability.
LG: Very tightly networked, everyone is about two degrees from each other. However it’s also very friendly and even competitors will sit down and have a beer with one another.
What are the costs of doing business in New Zealand?
DH: New Zealand is really inexpensive to set up shop - you can get going establishing a company within a few days and on not a lot of money. It’s relatively expensive to live in the cities so housing becomes a relatively high cost for employees, which means salaries are decent. There aren’t a lot of ‘transaction’ costs, taxes are not bad and there are a lot of great government grants and incentives for research, development and for anybody trying to build a business from New Zealand that sells to the rest of the world. There isn’t any capital gains tax either - but their probably should be!
LG: There are comparatively low costs of doing business in New Zealand, it’s the international travel costs that can hurt new entrepreneurs based here.
What tips would you give to an entrepreneur thinking of starting-up in New Zealand?
DH: Get over there and meet the people and fall in love with the country! Building a start-up isn’t just about the start-up, it’s also about designing a new lifestyle for yourself - so thinking about where you are based is just as important as what kind of company you are going to build.
There are more and more technology and media entrepreneurs starting up companies in New Zealand every day and many of them are coming from overseas.
We are also creating some fantastic bio-tech and green technology companies just like LanzaTech (which Virgin partners with to pioneer a new age of biofuels for air travel) and taking them to the world.
LG: I’d say: spend some time getting to know people first and get introductions, plan to start a global business, tour the country and spend time talking to entrepreneurs in each city before deciding where to live, be aware that some businesses are not ideal for NZ, make sure your start up suits the local conditions and don't forget to jump on a plane and meet your customers as soon as possible.