Compliance & Regulation (the fun stuff)

The great thing about starting a business in New Zealand is the relative ease as to which this can happen – dependent on the structure chosen you could be underway with very little compliance and or additional regulation. However even in a basic form there are boxes that need ticking:

1)      Taxes and record keeping – even as a sole trader you will have the requirement to file a tax return and support your calculation with appropriate records. Systems like Xero are great in helping turn this from a chore to an easily manageable part of your day. You might also be required to register for, and file, GST Returns depending on your actual or expected level of sales.

2)      Structure – there are many different options for choosing an operating structure. A common structure for trading in New Zealand is a limited liability company. To operate a business via a company you will need to complete a registration online as well as file an annual return to verify the details of your company each year with the Companies Office. Additional obligations are also placed on Directors of companies – these should be understood to avoid surprises. A company will also require its own IRD number and complete filing requirements with IRD.

3)      Employing staff - the next step for most business operators will be hiring a first staff member. Along with complying with relevant employment law there are obligations around payday filing, documentation and managing the ongoing relationship between the employer and employee. Employment Law is often subject to changes, especially with changes in Government – keep up to date with this or ask you advisor for guidance.

4)      Keeping safe – often hand in hand with employing staff and equally important is ensuring Health and Safety is upheld and managed in the workplace. Worksafe Home | WorkSafe are the primary organisation responsible for managing and enforcing the Health and Safety at Work Act 2015. Industries will often offer specific guidance to assist operators as well.

5)      Environmental and Privacy – for any business that interacts with the natural environment there will need to be considerations for how your business might impact this. This is an area of focus for many local councils / authorities, particularly when it comes to protection of waterways – as well as damaging the natural environment breaches can attract significant fines and brand damage.  

Businesses also need to ensure the privacy of data held by the business – this can be as simple as password protecting spreadsheets with customer details, enforcing 2FA on systems and regularly removing any unused personal information from databases to manage this risk.

6)      Licenses or permits – fancy setting up that food trailer in the local park, or renting kayaks on a local lake – it pays to talk to local authorities around what documentation and paperwork is required as many small activities require licences or permits to operate in a certain location.

7)      AML – the talk of the last decade, for certain sectors including financial, legal and real estate it is critical to understand any requirement to comply with AML, including registration and filing. There are a number of great systems available to assist in streamlining this process and ensuring you meet you obligations to know your customer and the source of funds.

8)      Industry Specific – research if any certifications or licenses are needed specific to your industry, often granted by industry bodies such as Master Builders, CAANZ, or Plumbers, Gasfitters and Drainlayers – this offers protection to clients as well as insights into industry best practice and standards.

Every business will have its own unique compliance and regulation requirements, it is important that these are assessed on commencement and regularly throughout your business journey to ensure risk is managed as effectively as possible. The points discussed above are by no means exhaustive and specific advice should be sought.

Feel free to reach out to the Direct Advisory to discuss any of the above or what else may be required when you are thinking about starting up your own business.

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