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, according to 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 historic signing of the Australia-New Zealand Closer Economic Relations (CER) Trade Agreement strengthened economic ties between the two countries across innumerable sectors. Labour market regulations have been eradicated between the two countries, allowing free labour mobility, while many other areas of regulation – aviation, healthcare and food safety, for example - have been standardised to form a Single Economic Market (SEM). China is New Zealand's largest trading partner, followed by Australia.

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.


New Zealand Market Profile Infographic_small

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.
Intercompany loans Similar to bank loans, intercompany loans refer to lending between entities within the same group.

Corporate Treasury in New Zealand

The World Bank ranks New Zealand as the easiest country in the world in which to do business while the Heritage Foundation classifies it as the third-freest economy in the world. 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 2017-2018.
  • It ranks New Zealand third in the world for the soundness of its banks, while it rates the country top for legal rights and ease of access to loans.
  • 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 26 registered banks in New Zealand, 11 of which are branches of foreign banks.
  • New Zealand’s foreign-exchange market has an average daily turnover of USD10 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. Outstanding bonds with a value of NZD25.39 billion are listed on the NZX Debt Market.


Regulatory Bodies

  • The banking industry is regulated by the Reserve Bank of New Zealand, which is also the country’s central bank. Regulations are in line with international standards.



  • The corporate income tax rate is 28%.
  • Resident companies are taxed on worldwide income whilst non-resident companies are taxed on New Zealand-sourced income.
  • The branch of foreign company’s profits are taxed at the same rate as resident company’s profits. There is no branch profits remittance tax on the remittance of profits to the head office by the branch of a foreign company.
  • The standard rate for Goods and Services Tax (GST) is 15% with certain goods and services being zero-rated whilst others are exempted.
  • Interest expenses that are used for business purposes are generally tax deductible. However, the deductibility of the interest is restricted when the company’s allowable debt level exceeds the safe harbour debt to asset ratio.
  • There are no stamp duties in New Zealand.
  • Withholding tax (WHT) of 33% is charged on certain types of dividends, and rates of 10.5%, 17.5%, 28%, 30% or 33% are charged on certain types of interest earned by resident companies. For non-resident companies where no tax treaty is in place, WHT of 0%, 15% or 30% is charged on dividends and 15% on interest. Where a tax treaty is in place and the non-resident can provide the Certificate of Residence, WHT ranges from 0% to 15% for dividends and 0% to 15% for interest.
  • 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, and has no 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 are permitted.



Banking System

  • There are 26 registered banks in New Zealand (all banks must be registered with the Reserve Bank of New Zealand), 11 of which are branches of foreign banks. In addition, there are 25 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: ANZ New Zealand, Bank of New Zealand, ASB Bank and Westpac New Zealand. Together they control 82% 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 is 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.
  • The core payment systems are regulated by a self-governing body, Payments NZ Ltd, an industry-led regulator set up by New Zealand’s main banks. The payments systems it governs are the bulk electronic clearing system (BECS), consumer electronic clearing system (CECS), high value clearing system (HVCS) and paper clearing system (PCS). There are currently 12 participant banks and 34 members who are payment providers.
  • 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, and investigations are overseen and conducted by the New Zealand Police Financial Intelligence Unit (NZP-FIU), which is also 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.


(High-Value Clearing System)

Electronic high value exchange and settlement system

  • Operated by Payments NZ.
  • 12 participants, with support from the Reserve Bank of New Zealand.
  • Processes high value and urgent NZD-denominated electronic credit transfers.
  • Reserve Bank supports the use of HVCS for transactions exceeding NZD1 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

  • Operated by Payments NZ.
  • Nine direct bank participants, with support from the Reserve Bank of New Zealand.
  • 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

  • Operated by Payments NZ.
  • Nine direct bank participants, with support from the Reserve Bank of New Zealand.
  • Processes banks' proprietary debit card payments (EFTPOS) as well as mobile payments utilising the SBI infrastructure.
  • 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

  • Operated by Payments NZ.
  • Eight direct bank participants, with support from the Reserve Bank of New Zealand.
  • 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 banks.



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 (auto debits)

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


Card Payments

  • Credit and debit cards are the most popular modes of payment by volume, with contactless payments - ‘tap and go’ – experiencing the strongest growth.
  • 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 and credit card payments are cleared through CECS.
  • There are two EFTPOS network providers: Paymark (processes 75% of EFTPOS transactions) and EFTPOS New Zealand (processes the remaining 25%).
  • 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.


Online Payments

  • The Financial Markets Conduct Act 2013 (FMC Act) took an early position on financial technology (fintech) companies by allowing flexibility and innovation and supporting online capital funding options within the financial markets. This relinquished the need for a regulatory sandbox.
  • The Financial Markets Authority is overseeing developments in the fintech sector.
  • Digital wallets are increasing in popularity, but credit and debit cards continue to be the most common mode of payment. Popular digital wallets are Android Pay and Apple Pay, and local providers are ANZ’s goMoney Wallet and ASB Virtual Wallet.
  • Mobile payments have had a relatively slow initial uptake, however, they are fast increasing in popularity with payments made by mobile apps, such as Square and Apple Pay, and wearable devices, such as FitBit Pay and Garmin Pay.


Digital Currencies

  • Persons working in NZ cryptocurrency markets or services are required to abide by the FMC Act and, with respect to anti-money laundering, the Financial Service Providers (Registration and Dispute Resolution) Act 2008. The Financial Markets Authority classifies exchanges, wallets, deposits, broking and ICOs as financial services that fall under the FMC Act.
  • Cryptocurrencies are not legal tender.


Cash, Cheques and Money Orders

  • According to the Reserve Bank of New Zealand, contrary to cashless trends, the amount of cash in general circulation continues to grow.
  • However, cheque usage is in significant decline, more than halving in four years (Payments NZ, 2017), as electronic payments become 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.
  • New Zealand’s PostShop offers Western Union remittance services for international money orders, but no longer sells domestic money orders.



New Zealand Market Profile Infographic

1 (Progressive) max rate for incomes over NZD70,000


Recent developments


API Standards Launched

Payments NZ, which oversees New Zealand’s payment systems, has released the country’s first Application Programming Interface (API) standards for payment initiation and account information. The shared API framework will make it easier for organisations to partner with each other, driving financial services innovation and helping them to bring new products and services to the market more quickly. Payments NZ has worked with the industry for a year to run a pilot for testing the API framework.

Read more about the development here


Cost-effective Cashless Payment Options Needed

The general manager of FinTechNZ, New Zealand’s financial technology innovation association, has called on financial services providers to collaborate to provide business customers with cost-effective payment options beyond cash and cheques.

James Brown said wearable technology looked set to be the next area of innovation in the country’s payments market, with iris recognition used as a way to identify people. He also urged small and medium-sized business to build a strategy around non-cash payments.

Read more about the development here


Online Grocery Sales Booming

Online grocery shopping has seen a significant increase as consumers become more comfortable buying food and household products over the internet. E-commerce in the fast-moving consumer goods (FMCG) sector is growing at an annual rate of 37%, significantly above the increase for all grocery sales of just 3%. Online sales now represent 59% of supermarket dollar growth, with brick-and-mortar sales accounting for 41%. Even so, internet sales still account for just 3% to 4% of total grocery spending, according to Nielsen New Zealand.

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:World Bank, Heritage Foundation, CIA World Factbook, World Economic Forum, PwC, NZX Debt Market, Reserve Bank of New Zealand, Bank for International Settlements, Deloitte

The information herein is published by DBS Bank Ltd. (“DBS Bank”) and is for information only. The information is assembled based on information available and accurate as at Apr 2019.

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Last updated on 13 Apr 2019