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Asia and Australasia Continent Guides

Which Country Is Better To Start A Business If You Are An Entrepreneur? Australia or New Zealand?

Want to know whether Australia or New Zealand is the best country to start a business this year? Keep reading for more

  • It takes around 402 days to get a business contract enforced in Australia and 2 days to register a business
  • The average salary in Australia of US$55,206 is higher than that in New Zealand of US$45,340
  • The Trans-Tasman Travel Agreement exists between both Australia and New Zealand which allows citizens free movement
  • The government offers everything from loans, grants, infrastructural support, cheap legal advice, mentoring services, and low taxes

You might have heard of business opportunities in North America, South America, Asia, and Europe. But Australasia also has great countries where you can easily start a business. It’s a region within Oceania with countries and islands providing multiple opportunities for new businesses. 

Of this region, Australia and New Zealand are one of the best two. Here are some of the reasons why you might choose to start a business in one of these countries. 

BOTH COUNTRIES

Ease of Doing Business

The 2020 World Bank ranking of Doing Business puts Australia 14th. The country is one of the easiest places to start a new business. It ranks 4th out of 190 countries for getting credit. Canada, the UK, South Korea, and China set the benchmark, but Australia has well-established regulations and institutions for credit support so entrepreneurs can get loans, credit, and good financial support to set up or run businesses which is essential especially after Covid-19 hit. 

Australia and New Zealand also have a good reputation for business practices too, compared to other countries in East Asia and the Pacific region. It takes around 402 days to get a business contract enforced in Australia and 2 days to register a business, requiring only three steps for business owners to complete. In New Zealand it’s also relatively easy to register a business, only taking 1 to 2 business days. 

New Zealand is one of the best countries in Australasia to start a business because it’s literally the least corrupt country in the world! With a GDP of USD 205.9 billion, New Zealand has been growing economically for the past 35 years. 

Trade

Both countries have numerous trade agreements with countries worldwide and especially countries in the South-Asian Pacific. It makes it very easy to export and import goods. If you wish to do this, as an entrepreneur the biggest barrier is the time it takes to receive or distribute goods to countries outside Southeast Asia because of how far these countries are. 

Australia has a bigger advantage because it has more ports for international trade. Usually this means that a lot of New Zealand goods have to go through Australian ports which could increase your transportation costs if you choose to set up in New Zealand. 

AUSTRALIA

Large and Diverse Market

Both countries have a diverse and skilled labour market with lots of immigrants, but between the two, Australia has a much larger population of 25 million compared to New Zealand’s 4.9 million. 85.9% Austrialians also live in urban areas where more businesses are established so any entrepreneur will have better and more access to talent in Australia. 

The average salary in Australia of US$55,206 is higher than that in New Zealand of US$45,340. This means overall there are more customers in Australia with more money to spend. This is crucial for any entrepreneur as you’ll want to sell to as many customers as possible to make money and profit. However, if you have an online or international business this might not matter as much because you can sell your products to anyone in the world.

Talented Labour 

Australia not only has a much larger labour force than New Zealand, it’s good educational system and favourable travel regulations for foreign workers makes its labour force one of the most well educated and multicultural in the world. 30% are born overseas, 1.3 million Australians speak a European language, and 2.1 million speak an Asian language

It’s important to note that the Trans-Tasman Travel Agreement exists between both Australia and New Zealand which allows citizens free movement. Travel between both countries is cheap and quick. This again makes it easier for any entrepreneur to get good labour from both countries. 

Much of the overseas talent go to Australia for IT sector jobs, so if you’re starting a business in the IT industry you won’t be short of talented workers in Australia. However, any entrepreneur or business in Australia will have to deal with current employment issues caused by Covid which has led to the Great Resignation with workers looking for better working conditions and higher pay across the market, and employers having to provide this to attract talent. 

Infrastructure

Despite having a large land mass, Australia has built a great infrastructure with good roads, buildings, electrical, water, and sewage systems all across the country especially in urban areas. For any business, this is crucial because it means you’ll have the right infrastructure in place for a physical or online store, and to receive and distribute goods inside and outside the country. Australia’s infrastructure provides great opportunities for investors and entrepreneurs. 

New Zealand by contrast has a smaller land mass but larger areas of natural and agricultural land. Both countries still maintain their natural beauty with areas like beaches, national parks, and forests which draws in a lot of tourists each year.

Source Medium 

Quality of Life

The standard of living in Australia is very high, comparable to many western countries which people associate with high standards of living like Britain, USA, Switzerland, or Germany. Between the two countries, Australia wins for standard of living because it has bigger multicultural and economically advanced cities such as Sydney or Melbourne where it’s easier for entrepreneurs to set up firms. There’s a host of beaches and a wide range of tourist activities too, which make it better for any entrepreneur to give their family the type of life or experiences they want. 

Australia has universal healthcare and has one of the best standards for this anywhere. That’s why during the pandemic along with New Zealand, it was one of the first countries to go out of lockdown due to its great response to dealing with Covid. 

Tech Sector

The tech sector and IT industry within this sector is one of largest and best in the world, which between 2015 to 2021 even during the pandemic, grew by 79%. It’s the fastest growing industry attracting talent and investors worldwide. Any entrepreneur looking to go to Australia should consider setting up in this industry. Even if your business doesn’t, the IT infrastructure is there to meet all your IT needs. 

The Economic Contribution of Australia’s Tech Sector, Source TechCouncil

Read more about which industries are thriving and best to start a business in Australia or New Zealand here

NEW ZEALAND

Government Incentives

New Zealand was ranked 5 in Forbes Best Countries for Doing Business in 2018, and is still one of best places to do business, partly because the government offers great incentives for entrepreneurs and businesses. The government offers everything from loans, grants, infrastructural support, cheap legal advice, mentoring services, and low taxes. Unlike the US or other Western economies, New Zealand has no payroll, social security, or capital gains taxes.

Some of the best incentives are Research and Development (R&D) grants like the Student Grant, Growth Grant, Project Grant, or Getting Started Grant for businesses and students focusing on developing scientific and technological products. 

Even if your business is struggling with hiring talent, there is the Flexi-Wage Subsidy to help hire and train employees on welfare or benefits. This could prove useful especially after the Coronavirus pandemic which made it harder for businesses to sell goods over the counter and make enough revenue to pay employees. 

It’s important to note that the New Zealand and Australian governments have good agreements in place that make it easy to do business across both countries. There are no tariffs on imports and exports, free movement of labour, and The 2003 Taxation Act which helps limit double taxation for citizens and businesses across both nations. 

Visit Zegal to find out more about top 5 types of New Zealand government grants.

Good Export Market

For business owners, it provides various opportunities in multiple sectors. New Zealand’s economic growth depends on other countries, for which the raw material sector thrives. That’s partly why it has such a good  international trade market, especially for exports which still rose 13% in 2021 during the pandemic. Any entrepreneur or foreign investor, thinking of setting up in New Zealand, would make a lot of money if they export goods. 

It’s important to consider trading with the below countries because they have better trade agreements, routes, and customers. Also consider exporting or investing in, one of the top exports from New Zealand. 

Source, World Exports

Banking

Despite having a small nation, New Zealand has a strong banking system that’s very adaptable especially to global issues. 3 years ago they even set up the New Zealand Green Investment Fund (NZGIF) to help accelerate investments that reduce greenhouse gasses.  

Many New Zealanders are finance savvy and have also gotten onboard with investing in crypto to help increase their investments and profits. It’s led to a lot of crypto exchanges like Coinspot or Swytx, being set up in the country that allow people to invest in crypto. 

A great banking system is needed to supply and run the backbone finance a business needs, from getting everything like loans, investment, funding, to financial business systems. It’s important that any country has the right infrastructure to support entrepreneurs and businesses. 

Booming Industries

New Zealand has loads of arable farming land that’s why the largest sector in the country is agriculture. Investment in this sector is growing and new technologies are being introduced making the yield of livestock and crops improve and increase consistently over time. 

There’s been great interest from foreign investors in the Horticulture sector in agriculture. It’s one of the key industries of the country with export products like peaches, nectarines, plums, and cherries growing in huge quantities. 

New Zealand Horticulture sector 2019, source FreshPlaza

Read more about which industries are thriving and best to start a business in Australia or New Zealand here

Amin Bilal is a business consultant, founder of CompanyHand.com, and content creator. He specialises in advising SMEs and large multinational corporations solve finance, operational, and technological problems.

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