New Zealand Economy

New Zealand Economy

Banking system (major banks and insurance companies)

The banking system is controlled by the central bank (The Reserve Bank of NZ). The banking system is legally regulated by The Reserve Bank of New Zealand Act 1989 and The Banking Act 1982 and some other laws.

After the deregulation of the banking system, New Zealand has a highly developed system of banking and financial services supported by the latest information technologies. The main banks are linked to a unified check processing system (Interchange and Settlement Ltd.).

According to, the number of banks that can operate on the market is not determined by law. Foreign banks have an equal status with domestic banks and there are no restrictions on their operations. Foreign exchange controls were abolished except for the requirement for a license to carry out foreign exchange operations. The foreign currency payment mode is free.

A total of 17 banking institutions are registered in New Zealand, of which only one bank is held by New Zealand capital. Four banks are dominant, namely Bank of New Zealand, ANZ Banking Group, Westpac and National Bank of New Zealand. The first three of these are controlled by Australian financial institutions, the National Bank of NZ is controlled by Lloyds of London. In June 2000, the last bank from Australia’s Big Four was newly registered in New Zealand: Commonwealth Bank of Australia. Auckland Savings Bank and Taranaki Savings Bank operate as local regional banks in the position of savings banks. In addition to banks, other financial companies and insurance companies also operate on the financial market.

Correspondence with New Zealand banks is mainly maintained by ČSOB (Bank of New Zealand, ANZ, National, Westpac) and other major Czech banks.

The stock exchange is located in five cities and deals in local and foreign stocks.

Tax system

New Zealand has the third lowest tax liability in OECD countries. There are two main direct taxes in New Zealand, Corporate Tax at 28% and Personal Income Tax. There are no social insurance contributions, capital gains tax or payroll tax.

Personal income tax
Amount of income per year Tax rate
(from 1.10.2010)
0 – 14 000 NZD 10,5 %
14 001 – 48 000 NZD 17,5 %
48 001 – 70 000 NZD 30 %
after 70 000 NZD 33 %


Goods and services are subject to taxation in the form of general indirect value added tax GST (Goods and Services Tax) from 1.10. 2010 increased from 1to 15%. Alcoholic beverages including beer, tobacco products and motor fuels are also subject to a special 15% excise duty.

Income tax of 33% is applied to incomes above 70,000 NZD, up to 14,000 NZD the tax is 10.5%. A rate of 28% applies to companies and corporations.

The official fiscal year, currently also used in government reporting, in New Zealand is from 1 July to 30 June of the following year, but many private companies use a financial year that starts on 1 April and ends on 31 March of the following year.

Free trade zones (VT parks, investment zones)

There are no duty-free zones, warehouses or ports in New Zealand.

NZ is very active in the field of concluding free trade agreements. NZ has Free Trade Agreements with the following countries:

Under the CER (Closer Economic Relations Trade Agreement 1983) between Australia and New Zealand, there has been a gradual progressive liberalization of mutual trade and goods manufactured in Australia (with a local labor share greater than 50%) are now imported into New Zealand at zero tariff. It is one of the most comprehensive FTAs, covering essentially all goods, and was the first agreement of its kind to include trade in services. From July 2018, the revised conditions of the Wine Tax Rebate program apply, which also includes NZ wine producers. For example, the maximum amount of the discount provided has been reduced, stricter criteria have been introduced for the application of the rebate by NZ producers. In October 2018, another of the series of negotiations to deepen economic cooperation within the framework of the common economic market (Single Economic Market), which is established in the CER, took place in Sydney.

After three years of negotiations, an agreement on the creation of a free trade zone with China was signed on April 7, 2008. An interesting fact is that New Zealand was the first developed economy to grant the PRC the status of a market economy according to WTO rules and to start negotiations on free trade with Beijing. The agreement became effective on October 1, 2008. Since that date, 63.6% of Chinese goods are imported with zero import duty. In the opposite direction, the duty does not apply to 24.3% of items. The full elimination of tariffs on Chinese exports to New Zealand took place on 1 January 2016. China will eliminate import duties on 96% of New Zealand goods by 1 January 2019 at the latest.

The conclusion of the FTA led to the start of the “white gold rush” in New Zealand the massive development of the dairy industry. Since 2008, NZ exports to China have quadrupled. In 2018, mutual trade reached NZD 28 billion. China is NZ’s 2nd largest source of tourists and international students. The aim of the upgrade of the agreement is to remove higher tariffs for dairy products when quotas are exceeded, forestry and wood processing industry will also be discussed, new rules for online and digital trade, export of services and improved measures in case of non-tariff barriers.

The number of tourists from the PRC is also growing, showing a 9% year-on-year increase in October 2018. The interest in attracting more Chinese tourists is also illustrated by the intergovernmental project “2019 – the year of NZ-Chinese tourism”.

In November 2019, Prime Minister J. Arden officially announced the successful conclusion of the three-year negotiations on upgrading the NZ – PRC Free Trade Agreement. The announcement was made at the East Asia Summit, where J. Arden met with Chinese Premier Li Keqiang. The upgrade of the agreement will result in faster and easier exports of NZ goods to China and preferential procurement of wood and paper from NZ over the next 10 years. The PRC has achieved a modification of visa rules for some occupations (guides, Chinese teachers). The same rules remain for the import of dairy products from NZ to the PRC.

The 2000 Free Trade Agreement with Singapore was upgraded to the Closer Economic Relations Trade Agreement in November 2018. The new visa relationship – from one to three months without a visa for tourist purposes and from five to eight years of the possibility of posting for business purposes – should further deepen mutual trade exchange. In May 2019, the Prime Minister of New Zealand and Prime Minister Lee of Singapore signed an upgrade of the agreement – the Enhanced Partnership, which entered into force on 1 January 2020. The Enhanced Partnership will significantly strengthen cooperation between the two countries in the fields of trade and economy, security and defense, science and innovation.
Since 2005, negotiations have been underway to create a free trade zone between the ASEAN countries, Australia and New Zealand. In February 2009, the AANZFTA – (ASEAN- Australia – New Zealand Free Trade Agreement) was signed, the agreement entered into force on 1/1/2010 and applies to: Australia, New Zealand, Brunei, Burma, Malaysia, the Philippines, Singapore and Vietnam. From January 2011 for Laos and Cambodia. It entered into force for Indonesia in January 2012. In addition to the AANZFTA, NZ also cooperates with a number of ASEAN countries bilaterally.

In 2009, New Zealand concluded negotiations with the Gulf Cooperation Council, but the agreement is not yet in force.

New Zealand is currently negotiating an FTA with India.

Based on the Agreement on Economic Cooperation with the Independent Customs Territory of Taiwan, Penghu, Kinmen and Matsu (ANZTEC), which entered into force in December 2013, NZ exports to Chinese Taipei increased by 22% in a year and a half (this is especially about agricultural production (apples, kiwi, cherries), dairy products and wine).

The FTA with South Korea came into force on 20/12/2015 and brings a number of benefits to NZ exporters. This is mainly the reduction or abolition of customs duties on a number of export agricultural and food products (e.g. abolition of the 15% customs rate on wine, 24% on cherries, reduction of the tax by 7.5% on kiwifruit (from the original 45%) and in 2020 abolition of kiwi tax), easier access to the services market (educational, tourism or legal services) or changes in the visa and residence area.

New Zealand is also a signatory country to the revised Comprehensive and Progressive Trans-Pacific Partnership Agreement ( CPTPP ), which was signed in March 2018 in Chile by the ministers of 11 partner countries (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore and Vietnam). The agreement entered into force on December 30, 2018. It covers a market of almost 500 million people with a 13.5% share of world GDP. The agreement is to eliminate over 98% of existing tariffs.

Almost a third of all NZ exports go to CPTPP countries. The expected benefit for NZ will be an increase in GDP by – 4 billion NZD, NZ promises to improve access to the Japanese market from the agreement, especially for agricultural production (kiwi, apples). In the case of Japan, this will be the first preferential approach, which will equalize the possibilities of NZ with, for example, Chile and Australia – for example, kiwi growers paid over 26 million NZD in duties in Japan last season alone, an increase in kiwi exports by 25% is expected in the next 5 years. Canada, Mexico and Peru, along with Japan, are the four countries with which NZ has a free trade agreement for the first time, and to which NZ$billion of exports go. In the case of Canada, the market opens up especially for NZ wine producers.

The first country to ratify the agreement in June 2018 was Mexico, followed by Japan in July. The NZ Parliament ratified the agreement in October.


New Zealand is also currently very interested in concluding an FTA with the EU .
NZ-EU cooperation is currently based on the Partnership Agreement on Relations and Cooperation (PARC) between NZ and the EU, which has been in force since 1999.
The EU is the third largest trade partner for New Zealand, trade in goods and services with the EU accounts for 15% of the total trade exchange of goods and services for New Zealand. NZ exports to the EU (outside Great Britain) reached NZD billion in 2017, while imports from the EU amounted to NZD 10.7 billion. The largest items of NZ exports to the EU in 2017 were meat, fruit and wine, seafood. The main imports from the EU to NZ are cars, spare parts and accessories, machinery, medicines and pharmaceuticals, and transport-related services. From the EU-NZ FTA, the New Zealand side expects a NZD 1.2-2 billion increase in NZ GDP, a 20% increase in exports from the EU and a reduction in tariff and non-tariff barriers. Food production (the EU’s interest in protecting geographical indications of origin for food, especially cheese) and the duration of patent protection for biological medicines (NZ has set it to 5 years) are perceived as problematic points of negotiation. while the EU has extended it up to 10 years in some trade agreements; NZ is worried about the increase in drug prices). So far, the last round of negotiations took place via video conference on March 30 – April 9, 2020.


NZ continues to negotiate a bilateral trade agreement with the UK , which will regulate mutual trade policy after the UK’s withdrawal from the EU. Meetings at the expert level (Trade Policy Dialogue) are held twice a year. The UK is NZ’s fifth largest trading partner and NZ’s largest export destination within the EU (bigger than DE, FR and IT combined); The UK is also the largest European investor in New Zealand. In October 2018, it was approved to introduce faster and easier check-in for passengers from NZ (and then Australia, USA, Canada and Japan) at UK airports from mid-2019.

On December 9, 2015, NZ formally became a member of the Asian Infrastructure Investment Bank.
NZ actively cooperates in the field of international trade organizations. Within the framework of the WTO, New Zealand acceded to the Agreement on Government Procurement (GPA) on 13/08/2015 and the Trade Facilitation Agreement (TFA) on 29/09/2015.


On November 1-4, 2019, negotiations on the Regional Comprehensive Economic Partnership took place between representatives of 16 countries in Bangkok, Thailand; 15 countries have completed negotiations on the text of the RCEP agreement and reached an agreement on market access – leaving the door open for India to join in 2020. For NZ exports, RCEP means better opportunities to defend the interests of NZ exporters in 7 countries, among New Zealand’s largest business partners. Negotiations on the Regional Economic Partnership began in 2012. A total of 28 rounds of negotiations took place until November 2019. Market access negotiations will continue with the aim of reaching a full agreement and signature in 2020.

At the end of July, after New Zealand and Australia, Samoa became the third country to ratify the PACER Plus (The Pacific Agreement on Closer Economic Relations Plus) agreement on free trade between Pacific island states.

In September 2019, New Zealand, Norway, Iceland, Fiji and Costa Rica signed an agreement covering terms for trade and tackling climate change. Prime Minister J. Ardern opened negotiations on the Agreement on Climate Change, Trade and Sustainability (Agreement on Climate Change, Trade and Sustainability – ACCTS) at a meeting in New York together with Norway, Iceland, Fiji and Costa Rica. The agreement seeks to eliminate tariffs on ecological goods, establish specific commitments to eliminate fossil fuel subsidies, and create a framework for eco-programs.

New Zealand Economy