Cultural tips on New Zealand

I came across this really interesting article on New Zealand, reproduced below. It's about New Zealanders and our approach to business.

The author notes that Kiwis are "conservative and perhaps even shy". I would add that Kiwis generally tend to undersell their abilities or product in business interactions.

Also noted is that "Respectful straight forward communication from the beginning of any business negotiations is essential". What the author is saying here is that Kiwis have a low tolerance for bullshit and overselling.

Thanks to my Twitter buddy Arlene Marom for bringing this to my attention.

The International Entrepreneur – Cultural Tips on New Zealand: An Interview with Kiwi International Business Development Expert, Ray Underell

This week’s business culture interview is about New Zealand. While New Zealand shares some cultural traits of its neighbor, Australia, this country is definitely unique and important in up-and-coming industries such as outdoor gear and high technology. New Zealand is an island nation that is always ready to stand up to international challenge. There are approximately 4 million Kiwis (New Zealanders) with a very diverse cultural make up, including citizens of European, Maori, Asian, and Pacific Island decent. The Auckland metropolitan area has two-thirds of the country’s population. New Zealand is also considered the Polynesian capital of the Pacific. Here is what International Business Development Consultant; Ray Underell had to say about his native culture:

What do you see as unique cultural characteristics of New Zealander’s that are reflected in New Zealand’s business culture?

New Zealanders share a similar mindset and character to our Australian friends & neighbors yet enjoy their distinction as being more conservative and perhaps even shy. That is of course until they are demonstrating their renowned capacity in the International Sports arena. Check out Rugby World Cup 2011, and or America’s Cup sailing. In New Zealand, the same competitive resilience and independent thought holds true in business culture and in particular their robust appetite for international trade. For instance, in 1984 New Zealand refused entry to the nation’s ports to American nuclear-powered and nuclear-armed ships. This was to demonstrate that New Zealand was against the use of nuclear materials and the country was dutifully punished by the United States with trade restrictions. As a result, New Zealand was forced to quickly establish other export markets. [These markets] expanded and included Asia. The New Zealanders tend to be internationally minded and a well-travelled society with approximately 3/4 million Kiwis living abroad.

In your opinion, what are New Zealand’s most competitive industries in world markets?

Recognized internationally, the New Zealand wine industry has expanded significantly over the past 20 years. Grape producing area has tripled from just 10,197 hectares in 2000 to 33,428 hectares in 2010. Vineyards now cover more than twice the surface area of any other horticultural crop in New Zealand. Reflecting the industry’s reputation as a provider of super-premium cool climate wines, exports have jumped from just US $88 million in 2000 to US $788 million in 2010. While the sector is still dominated by small wineries and relatively small growers, there has been a significant amount of international investment. The six largest companies account for approximately 55% of total wine production and 19% of total grape production.

New Zealand is strong in the agriculture, horticulture, forestry, fisheries, wood and paper products industries. New Zealand is also renowned for biotech research and development, particularly as it relates to agriculture.

What’s the best way to find potential New Zealand business contacts?

Making business contacts in New Zealand does not require an intermediary like it would in many other countries. Here are several organizations and website which can help you find business contacts in your industry:

New Zealand Trade and Enterprise assists Businesses Entrepreneurs with market knowledge and information on qualified opportunities

New Zealand Institute of Company Directors

New Zealand Chambers

Your country’s New Zealand Consul General to receive comprehensive information &  education

For American citizens, contact the American Chamber of Commerce , New Zealand Chamber, or Auckland Chamber     

What do you wish people knew about doing business in New Zealand before they arrive in country?

If you are traveling across the International dateline, try a night time flight so you can get a good sleep during your flight. You might otherwise suffer time loss in adjustment and lose a productive day’s business.

The majority of New Zealanders are approachable and extremely helpful/friendly assisting with directions.

New Zealanders are known for their humour!

Respectful straight forward communications from the beginning of any business negotiations is essential.

Researching organizations is mostly www.company name.co.nz.

Companies and Trade associations ‘industry specific’ are an easy search via www.google.co.nz.

From your perspective, what’s the business climate like for entrepreneurs in New Zealand (supportive vs. unsupported, culturally accepted profession vs. not accepted, etc.)?

I think that New Zealand business culture is extremely supportive of entrepreneurship. This is a leading base for tax revenues. But it is challenging for entrepreneurs in early stages especially for those without capital- just as it is in other countries.

Photo courtesy of author JayVeeAre under Creative Commons licence.

Guest Post: New Zealand's limited partnerships regime - combining limited liability and tax benefits

Thanks to Scott Yorke for this article.


Limited partnerships (LPs) are commonplace in many countries, but have only been available in New Zealand since 2008. However, we are seeing more and more companies adopt LP structures in the technology sector, including software businesses and franchise owners. The flow-through tax status of the LP, combined with its limited liability and confidentiality features, makes LPs an attractive structure for many new business ventures.  So how does it work?

An LP is an entity that combines the limited liability advantages of a company with the tax and confidentiality advantages more typically associated with a partnership. LPs are particularly suited to investment funds, but can also be effective structures for small start-up companies that expect to make substantial losses early on.

Like a company, an LP is a legal entity that exists separately from its owners. Contracts may be entered into in the name of the LP, and an LP may hold property in its own name. The limited liability protection available to the LP means that if limited partners are not involved in management of the LP their liability will be limited to the amount of their capital contributions. Because the LP has separate legal personality, there is no technical dissolution of the partnership when partners exit.

Like a general partnership under New Zealand tax law, an LP is transparent for tax purposes. Any losses or gains from the LP flow through (on a pre-tax basis) and are attributed directly to the partners to the extent of their economic interest in the LP. This is commonly known as “flow through” tax status. This tax status is what makes LPs so attractive to many investors.

An LP must have at least one general partner and one limited partner. Any person (including a company or another LP) may be a partner of an LP, but a person cannot be both a general partner and limited partner of the same LP at the same time.

The general partner is responsible for day-to-day management of the LP and has authority to bind the LP. The general partner has a “residual liability”. This means that the general partner is liable for the debts and obligations of the LP, but only if the LP is unable to meet them itself.

Limited partners are usually passive investors in the LP, and their details are kept confidential. They should not take part in the management of the LP if they wish to retain limited liability. However, they may participate in certain “safe harbour” activities. The distinction between managing the LP and taking part in safe harbour practices can often be difficult to draw, particularly with start-up LPs.  For this reason, the general partner will often be set up as a company to manage the affairs of the LP, with limited partners taking shares in that company.

Every LP must have a limited partnership agreement. This agreement documents how the LP is to be administered and what the rights and obligations of the partners are. The agreement is not a public document.