New Zealand



About New Zealand

New Zealand is ranked by the World Bank as the easiest country in the world in which to do business and as the third freest economy in the world by the Heritage Foundation.

Flexible licensing and established labour laws and regulatory frameworks have positioned New Zealand as one of the world's most efficient and competitive entrepreneurial environments. This is further enhanced by a competitive financial sector which offers advanced, sophisticated financial instruments to boost business activity. Trade openness, supported by low tariff rates and few barriers to foreign investment, have also made New Zealand an attractive destination for trade and investment.

The signing of the Closer Economic Relations between Australia and New Zealand agreement has also strengthened economic ties between the two countries. Labour market regulations have been eradicated between the two countries, allowing free labour mobility. After Australia, China is New Zealand's largest trading partner.

With New Zealand's geographical location and distribution links with major markets, it is an unrivalled base to tap into Europe, North America and Asia for ease of trade and investment flows.


What solutions are available in New Zealand?

Solution Description
Interest Optimisation Maximise your interest yield from for your balances held with the bank.
Notional Pooling Cash balances in different accounts are notionally offset to derive the net balance, which is then used to calculate interest.
Sweeping/ Zero Balance Account (ZBA) ZBA are checking accounts with zero balances where funds are physically swept to eliminate excess balances and maintain greater control over disbursements.
In-house Banks (IHB) In-house banks provide corporate treasurers with another method of centralising and consolidating their business.
Intercompany loans Similar to bank loans, intercompany loans refer to lending between entities within the same group.

Corporate Treasury in New Zealand

New Zealand is ranked as the easiest country in the world in which to do business by the World Bank and as the third-freest economy in the world by the Heritage Foundation. Here, we highlight some of the key benefits relevant to treasury and cash management.


Financial Market Development

  • The World Economic Forum ranks New Zealand first in the world for financial market development in The Global Competitiveness Report 2015-2016.
  • It ranks New Zealand fourth in the world for the soundness of its banks, while it rates the country top for legal rights.
  • New Zealand has good business infrastructure, an educated English-speaking workforce and a sound legal environment.
  • There are no foreign-exchange controls in New Zealand.


Sophistication of Banking Systems

  • There are 24 registered banks in New Zealand, nine of which are branches of foreign banks. The four largest banks in New Zealand are Australian-owned.
  • New Zealand’s foreign-exchange market has an average daily turnover of USD 10 billion, accounting for 0.2% of global turnover (Bank for International Settlements triennial global survey 2016).
  • The size of New Zealand’s debt market has more than doubled in the past decade, with both government and corporate bonds available. Non-resident entities can also issue bonds in New Zealand dollars, known as Kauri bonds.


Regulatory Bodies

  • The banking industry is regulated by the Reserve Bank of New Zealand. Regulations are in line with international standards.



  • The corporate income tax rate is 28%.
  • Resident companies are taxed on their worldwide income, and non-resident companies and branches are taxed on New Zealand-sourced income. There is no withholding tax on repatriated profits.
  • Standard VAT is 15%.
  • Withholding tax (WHT) is charged on dividends at 33% and interest at 28% to resident companies. For non-resident companies where there is no tax treaty WHT is charged at 30% on dividends and 15% on interest. Rates range from 0% to 15% where a treaty is in place.
  • There are no stamp duties in New Zealand.
  • In most cases, interest expenses are deductible.
  • The New Zealand government is currently looking to modernise tax administration and reduce compliance costs.
  • New Zealand has tax treaties with around 40 countries and territories.
  • New Zealand is a signatory to the Organisation for Economic Co-operation and Development’s Multilateral Competent Authority Agreement, through which information is exchanged between tax administrations, to provide a single, global picture on some key indicators of economic activity within multinational enterprises.


Benefits for Regional Treasury Centres

  • New Zealand has well-developed financial markets.  
  • It offers proximity to fast-growing Asian markets, but does not have currency controls.
  • New Zealand has one of the least regulated free-market economies in the OECD, with a sound business infrastructure and a strong rule of law.
  • It is a member of the Asian Payment Network, a common payment settlement platform within the Asia Pacific region.
  • Domestic and cross-border notional pooling and cash concentration is permitted.



Banking System

  • There are 24 registered banks in New Zealand (all banks must be registered with the Reserve Bank of New Zealand), nine of which are branches of foreign banks. In addition, there are 27 non-bank deposit-takers, which include credit unions and finance companies. 
  • The banking sector is dominated by Australian-owned banks, with the four largest banks in New Zealand being Australian-owned ANZ New Zealand, Bank of New Zealand, ASB Bank and Westpac New Zealand, which together control 87% of total assets.


Bank Accounts

  • Residents and non-residents: May hold foreign and domestic currency accounts both domestically and overseas. Domestic currency accounts are freely convertible into foreign currency.
  • Interest: Available to savings and current accounts, as well as demand deposit accounts.


Legal and Regulatory

  • The Reserve Bank of New Zealand's Prudential Supervision Department oversees the banking sector.
  • A company is resident if it is incorporated in New Zealand or is managed or controlled in New Zealand.
  • Foreign exchange controls are not applied in New Zealand.
  • There is anti-money laundering and counter terrorism financing legislation in place.
  • A financial intelligence unit (FIU) was set up, the New Zealand Police Financial Intelligence Unit (NZP-FIU), which is a member of the Egmont Group.
  • New Zealand is a member of the Financial Action Task Force (FATF).



Payment Systems


(Exchange and Settlement Account System)

New Zealand's Real-time Gross Settlement (RTGS) system

  • Operated by the Reserve Bank of New Zealand (Reserve Bank).
  • ESAS is undergoing a replacement programme which began in April 2016 and is ongoing.
  • 20 participants, including the Reserve Bank.
  • Licensed banks require ESA accounts with the Reserve Bank. Non-bank financial institutions may be permitted an ESAS account subject to conditions.
  • Settles transactions in real time and with immediate finality across participant banks' ESAS accounts at the Reserve Bank.
  • Settles transactions using SWIFT from the HVCS in real time through ESAS.

Payments NZ Ltd


Payment systems regulator

  • Jointly owned by its participant banks.
  • Industry-led organization that administers best-practice methods.
  • Operates the following clearing systems:


(High-Value Clearing System)


Electronic high value exchange and settlement system


  • 14 participants, including the Reserve Bank and New Zealand Central Securities Depositary (NZCSD)
  • Processes high value and urgent NZD-denominated electronic credit transfers.
  • Reserve Bank supports the use of HVCS for transactions exceeding NZD 1 million.
  • Payment instructions use SWIFT messages.
  • Settlement of transactions processed by the HVCS done across participants' ESAS account at the Reserve Bank through ESAS.
  • Settlement requests are sent between HVCS participants through ESAS-SWIFT using SWIFT FinCopy.



(Bulk Electronic Clearing System)

Bulk electronic exchange and settlement system

  • Nine direct bank participants
  • Processes low value electronic retail transactions (such as recurring direct debits).
  • BECS is a Settlement before Interchange (SBI) system.
  • Transactions are processed in the next clearing period. Five daily settlements between banks ensures payments are settled same day and through ESAS before they are exchanged between the sending and receiving bank.


(Consumer Electronic Clearing System)

Exchange and settlement system

  • Processes banks' proprietary debit card payments utilising the SBI infrastructure.
  • Eight direct bank participants
  • CECS is a Settlement before Interchange (SBI) system.
  • Transactions are processed in the next clearing period. Five daily settlements between banks ensures payments are settled same day and through ESAS before they are exchanged between the sending and receiving bank.


(Paper Clearing System)

Paper-based exchange and settlement system

  • Eight direct bank participants
  • Processes cheque payments and all MICR-encoded paper-based payment instruments.
  • PCS is a Settlement before Interchange (SBI) system.
  • Transactions are processed in the next clearing period. Five daily settlements between banks ensures payments are settled same day and through ESAS before they are exchanged between the sending and receiving bank.



Payment Instruments


Credit Transfers

  • Are only automated.
  • High-value and urgent credit transfers are cleared and settled through HVCS in real time.
  • Low-value, non-urgent and bulk credit transfers are cleared through BECS same day.
  • Used for payroll, supplier and third-party transactions.


Direct Debits (autodebits)

  • Available for low-value, regular payments such as utility bills.
  • Processed through BECS same day.



  • Cheque usage is in decline as electronic payments becoming increasingly popular for both high- and low-value transactions.
  • Cheques are truncated and then processed through the PCS.
  • Intrabank cheques can be cleared in real time or within 24 hours (depending on the bank) and interbank cheques can take up to three days.


Card payments

  • Becoming increasingly popular, with NZD 76 billion of card transactions made in 2016.
  • The main credit card brands are Visa and MasterCard, with American Express and Diners Club also in circulation. They are cleared by their own international card schemes.
  • Debit card payments are cleared through CECS.
  • There were 2,550 ATM terminals in 2014, a decline from a peak of 2,700 in 2011.
  • There are two EFTPOS network providers: Paymark (processes 75% of EFTPOS transactions) and EFTPOS New Zealand (processes the remaining 25%). Card payments are cleared and settled through CECS.
  • Paymark is the national payment network operated by the big four Australian-owned banks, Westpac, ANZ, BNZ and ASB.
  • New Zealand Post offers reloadable e-purse card schemes.



Recent developments


API Pilot Launched

Payments NZ is leading a pilot to test two account information Application Programming Interfaces (API). One of the systems will enable development partners to make pre-payment checks, such as confirming account details and ensuring the payee has sufficient funds for the transaction. The other will let third parties set up and make electronic credit payments by connecting directly with banks. The pilot is being carried out by ASB, BNZ, Datacom, Paymark, Trade Me and Westpac.

Read more about this development here.


Afterpay Made Available to Small Businesses

Independent retailers in New Zealand can now offer Afterpay to their customers following a tie-up between the Australian retail payments platform and New Zealand software provider Vend. Afterpay, which offers a buy now, pay later option to consumers, has previously only been available to large-scale stores and online retailers in New Zealand. Making Afterpay available to small and medium-sized businesses will help them to compete with larger stores.

Read more about the development here.


Instalment Payment Services on the Rise

Online and traditional retailers are making interest-free, payment spreading services such as Afterpay, Oxipay and Partpay available to their customers. The services enable consumers to pay for purchases in instalments over a number of weeks. Anecdotal evidence suggests offering instalment payment services makes customers more likely to go ahead with a purchase, while it also helps retailers differentiate themselves from their competitors.  

Read more about the development here



This Market Profile is brought to you by DBS. Get in touch with us for further insights on doing treasury in New Zealand and take advantage of our innovative solutions to empower your business. Click here to find out more.



Sources:IMF World Economic Outlook database, October 2016; CIA World Factbook; Trading Economics; PwC

Please note that the information contained in this document, assembled based on information available and accurate as at July 2017, is of a general nature only and is subject to change whether for economic, political, social or other reasons.


Last updated on 20 May 2018