Saying what we mean and doing it is a big attraction, writes Arran Boote.
Australia's tourism positioning touts its uniqueness - "there's nothing like it" - as a holiday destination. But as a place to set up business operations, increasingly, there's nothing like New Zealand.
There's no doubt our proximity to Australia is the main reason for our appeal to the growing number of Asian companies that have a need for an Australasian base.
New Zealand is too small a market to matter much to them in its own right. But there are a range of good reasons why Asian-based investors are looking to tap the Australian market from this side of the Tasman.
Our commitment to action. If we say we will do it, we actually mean it and actually do it. This is not always how it works in Asia. Many promises are made about delivery of services and often that simply does not occur or is many weeks/months late. It can be pleasantly surprising to investors that we stick to deadlines and deliver the services we promise on time.
Honesty and integrity. Not only do we have an excellent reputation for honesty in business, this is matched in fact. Again, it can be surprising that we don't ask for personal commissions, and our government officials don't take bribes.
Cost. We are cheap compared with Australia. This applies to a wide range of business costs including labour, compliance, and professional services. Office rental is also a consideration.
Opportunity. New Zealand has a business succession issue, and China and Hong Kong are part of the solution. It is possible for investors to buy well-established businesses for less than $2 million. Those businesses can provide immigration opportunities as well.
Profile. New Zealand has a profile in Asia that is far greater than either our size or economy should necessarily justify. This is because we are seen as China- and Asia-friendly. We also manage to steer clear of the sensitivities China has regarding Tibet, Taiwan and North Korea.
Spread of risk. The need to spread investments across markets and asset types is a concept that is gaining consideration in China. This is not a stampede yet, as many businesses in China obtain a return on investment that cannot be matched in New Zealand. But the more astute know that what is easily made in China can also be easily unmade, so they are looking to spread investments over emerging economies and well-established ones. New Zealand is seen as very stable and provides a safe place to invest.
Less discrimination. While New Zealanders have concerns about foreign land ownership, and our laws reflect that, there is a cultural openness. We throw out the welcoming mat in a way that Australia does not seem to be able to.
Immigration and business opportunities. The link between immigration and new passports and business opportunities cannot be ignored.
Taxation. With the phasing out of gift duty New Zealand has only two taxes - income and GST. By comparison, Australia has a less-appealing complexity of federal and state taxes, higher personal tax rates, and salary-packaging tax rules.
Market to test. New Zealand is seen as a good market to test products for release to Australia, and the West in general.
A survey by Singaporean-based analyst Vriens and Partners ranks New Zealand third out of 18 Asia Pacific economies as a place to do business and invest (behind Hong Kong and Singapore).
Of six elements it considers essential to good international governance, rule of law is the most important and it ranks New Zealand first. This relates to judicial independence from public and private influence, as well as the protection of property rights and effectiveness of contract enforcement.
It also ranks first for its lack of corruption, and is in the top five on the other key elements of the index - Openness to International Trade and Business, Taxation, Public Sector Quality and Effectiveness, and Fiscal and Monetary Administration.
Some commentators will say there is more we can do to improve the environment for foreign investment, particularly from China. However, even as we are we have a great opportunity to leverage our strengths.
If we need reasons why we should encourage investment, we should not overlook the fact that Asian investors bring more than just their money - they bring their networks and contacts from all over the world, which have the potential to add enormous value to our business efforts in overseas markets.
Arran Boote is tax director for William Buck New Zealand. Based mostly in Hong Kong, he specialises in business strategy and structure for emerging markets.
