New Zealand offers companies taking their first step abroad a transparent and stable environment. The island-nation is an advanced economy that has branded itself as an easy place of doing business for foreign companies. Companies looking to expand to New Zealand should establish a global expansion playbook in order to ensure a successful execution and growth.
Research & Budget
The beginning phase of any global expansion should be to first ask the question of why you are choosing a particular country over another. This can be accomplished through a combination of reviewing macroeconomic factors, the target customer base, regulatory analysis, cost of expansion and go to market strategy. Once the reason has been established, a company should then turn to researching technical steps, including company incorporation requirements, tax regimes, and government agencies. For example, in New Zealand a local Director is required, tax authority is the Inland Revenue Department (IRD) and all companies must register their employees for KiwiSaver contributions. Once initial research has been completed the finance team will create a budget, including items such as revenue targets, human resource costs, professional vendor fees, office space and marketing.
Legal Operations
The New Zealand legal industry is advanced with professionals accustomed to supporting overseas clients. In an effort to attract foreign business, the New Zealand government intentionally crafts regulations to support smooth and transparent legal operations. This includes policies such as 1 NZD paid up capital, 100% foreign ownership and employer friendly employment law. If businesses choose to setup a local entity instead of leveraging an International Employer of Record (EOR) solution then the corporate establishment process will need to first take place before a local team is formed and sales can begin.
Go To Market
When creating a go to market global expansion strategy businesses first determine if they will use a single country, regional or global from day 1 approach. Companies who choose New Zealand as a global expansion destination often concurrently explore Australia before making the jump to more complex Asian countries. By choosing one country or region to funnel resources to, you are forgoing the opportunity to gain learnings from other potentially high growth market. Startups, Scale-Ups and even enterprise companies can benefit from leveraging lean principles for planning a go to market strategy. By launching a minimum viable product (MVP), often in the form of the product/service in the original home market, the local team can begin to gain insights from the reception of local prospective customers.
Hire A Team
New Zealand, especially Auckland, has a strong talent pool and education system.. In order to ramp up sales and operations, hiring a team with as many local nationals as feasible is recommended. Companies planning their New Zealand global expansion playbook will usually map out the first 10 hires during the budget phase. Common mistakes that globally expanding companies make include not sufficiently planning for employer social contribution levels, termination protections, intellectual property protection and common vs mandatory benefit programs. These can be mitigated through a combination of research and working with local partners.
Build, Measure, Learn
Once a team has been hired and the go to market strategy is established, operators should begin the lean cycle of Build, Measure, Learn. A common mistake businesses make when expanding globally is not treating the local operation as a startup within the company. This requires re-establishing product-market fit through MVP launches, data gathering and iterations. Companies expanding to New Zealand often assume that the business complexity and customer base will be identical to Australia. Companies that are successful leverage a localized strategy to connect with local customers across the region to solve their local pain points. By building a global expansion playbook that is tailored to New Zealand, companies can gain commercial growth.
