Australia vs New Zealand: Where Should You Start A Business?

Australia is known for its immense landscapes, famous landmarks like the Sydney Opera House and iconic wildlife, but also for its thriving business economy. The country is leading the way globally across industries such as finance, tech and education, attracting entrepreneurs from all over.

While New Zealand is also recognised for its breathtaking natural beauty in the form of mountains, lakes and coastlines, they are also making a name for themselves as a world business leader. The agricultural, dairy and sustainable industries continue to flourish, and the country has earned the reputation of being one of the easiest countries to do business in.

While these two neighbours share some similarities, they are distinctly different when it comes to starting and running a business. Let’s take a look at their startup ecosystems, visa requirements and some other factors to consider before you settle on one.

How Are Startup-Friendly Are Australia And New Zealand?

Australia is welcoming of startups, especially in cities like Sydney, Melbourne and Brisbane and have produced some exciting ones to watch in recent years. Their top incubators, Startmate and Stone & Chalk, offer supportive environments to startups where they can access funding and guidance in their early-stages.

However, funding can be quite competitive so startup founders will need a solid and innovative idea to stand out from the crowd.

New Zealand has also seen the success of multiple startups, thanks to its straightforward regulations that make it easier to do business in compared to other countries.

Wellington and Auckland are the startup hubs of the country and although the market size is smaller, the entrepreneurial culture is very much alive.

Which Industries Are Successful In Australia And New Zealand?

Australia: The country is one of the biggest producers of iron ore, coal and gold, making the mining industry – quite literally – a goldmine, with exports to other countries such as China, India and Japan. Australia’s famous landmarks like the Great Barrier Reef and Uluru attract millions of tourists every year, so the hospitality industry, specifically in luxury accommodation and adventure tourism, continues to thrive. Technology is another successful sector, with Australia setting a global standard for social media regulations.

New Zealand: Here, agriculture and dairy are two of the biggest industries, exporting milk products to Asia, America and the Middle East. Software development has also seen major success, with companies like Xero gaining international recognition. Around 80% of New Zealand’s electricity is generated from hydropower, wind and geothermal energy, so the emphasis on clean energy provides plenty of opportunities for sustainability startups.

What Are The Tax Rates?

Australia: The corporate tax rate here is 25%-30% depending on what your turnover is, and up to 45% for personal income tax. Goods and services tax is currently set at 10%.

New Zealand: In New Zealand, the corporate tax rate is 28% with up to 39% for personal income tax. Slightly higher than Australia, the goods and services tax is 15%.

Overall, New Zealand has a simpler tax system while Australia’s is a bit more complex, although more structured.

How Do The Costs Of Living Differ?

Australia: In Sydney, a one bedroom apartment in the city centre can cost around $2,500 AUD per month with utilities costing approximately $300 AUD. Rental space can be a bit pricey, ranging from $1,000 to $1,5000 AUD in areas like Sydney or Melbourne.

New Zealand: For a one bedroom apartment in Auckland, this could cost around $2,000 NZD with utilities at around $250 NZD per month. Office rentals are lower, ranging from $400 to $800 NZD in Auckland or Wellington.

Both countries have a higher cost of living compared other countries, but the quality of living is also higher. New Zealand will have slightly more affordable housing and office options compared to Australia.

Visa Requirements For Australia And New Zealand

Australia: Entrepreneurs can apply for a Business Innovation and Investment visa but this will require investment and sufficient business experience. For highly skilled entrepreneurs in main industries, the Global Talent Visa would be a good option. A Standard Work Visa can be acquired for setting up a business, but in most cases, this will need employer sponsorship. Remote workers can also apply for a Digital Nomad Visa.

New Zealand: The Entrepreneur Work Visa requires a solid business plan and at least 100,000 NZD investment while the Global Impact Visa is ideal for entrepreneurs who have scalable businesses. For those who want to invest in the country, they can apply for the Investor Visa, with a minimum investment amount of 3,000,000 NZD.

Potential Challenges To Consider In Each Country

Australia: Here, the cost of living, salaries and corporate tax rates are higher which could be difficult for entrepreneurs who are on a tight budget. Their business regulations are also highly competitive and complex to navigate.

New Zealand: The market is significantly smaller than Australia’s, so startups would need to consider international expansion as quickly as possible. Acquiring large-scale funding for early-stage startups is also more limited compared to Australia’s.

How To Set Up A Business In Australia And New Zealand

Australia: The first step will be to decide on a business structure, with the common options being a sole trader, partnership, company or trust. You can then register with the Australian Securities and Investments Commission. After this, you will receive an Australian Business Number as well as a Tax File Number. If your annual turnover is more than 75,000 AUD, you will have to register for goods and services tax.

New Zealand: Likewise, you can choose between a sole trader, partnership or limited company for your business structure. You will then need to register your business with the Companies Office and obtain your New Zealand Business Number. If your annual turnover exceeds 60,000 NZD, it is mandatory to register for goods and services tax.

Overall, New Zealand has the quicker registration process, which can be completed online in one day.

The Final Verdict

Both countries have startup opportunities, and the choice you make will depend on the nature of your business.

If you require access to a bigger economy with more funding opportunities, Australia will be the ideal choice although general costs are much higher and there are more regulations to follow.

For a simpler, quicker setup for your business and your startup can accommodate a smaller market, then New Zealand would be the option to go with.

Best of luck!