Help new migrant businesses
succeed!
Resources to support Rev Up!
Small to Medium Enterprises (SMEs) - The basics
Getting to know small
business in NZ
Definitions of
taxpayer types,
including SMEs and
entities
Factsheet: Small Businesses in New Zealand - How do they compare with larger firms?
- http://www.mbie.govt.nz/info-services/business/business-growth-agenda/sectorsreports-series/pdf-image-library/the-small-business-sector-report-andfactsheet/small-business-factsheet-2015.pdf
http://www.ird.govt.nz/aboutir/external-stats/tax-statistics-terms-definitions.html
SMEs - Starting a business
MBIE’s site for
businesses
Useful sections for starting and closing a business, employing and managing staff,
managing tax and finances, and operating within the law - www.business.govt.nz
Inland Revenue’s
information for
businesses
Starting a business - http://www.ird.govt.nz/business-income-tax/payingtax/?id=201405MegaMenu
Other information on
starting a business
Paying Tax as a business - http://www.ird.govt.nz/business-income-tax/payingtax/?id=201405MegaMenu
Citizens advice bureau - http://www.cab.org.nz/vat/eb/smallbusiness/Pages/Startingasmallbusiness.aspx
Kiwibank - https://www.kiwibank.co.nz/business-banking/help-advice/starting-abusiness/
SMEs – Challenges
Difficulties SME
experience with cash
flow and tax
obligations
Study on the ability of
SME’s to manage
regulation by Massey
University
‘What lies beneath’ (Acuity magazine, 2015) http://charteredaccountantsanz.com/en/Site-Content/Business-TrendsInsights/Acuity/December-2015/lies-beneath.aspx
SME Capability to Manage Regulation (Massey University, 2011) http://www.massey.ac.nz/massey/fms/sme/Report_Regulation_NZ_2011.pdf
Findings include:
 SME management systems and processes are a key determinant of
capability.
 Coping with change in recessionary times significantly impacted on a number
of small business owners. Example: dealing with employment regulations,
making staff redundant, changing staff contracts.
 Three areas of changes in regulation reported as important: taxation;
employment and OSH.
 Factors that influence capability:

Resource capacity: not just size of the business, varies along different
dimensions, different sectors

Systems and processes: well established allow for adaptation to
changes in regulation, related to general management practices

Use of technology: including accounting software; on-line systems,
affected by perceptions of costs v benefits

Owner-manager ability and experience; previous business experience;
learning orientation; access to mentors
 Complexity of internal and external relationships affect small firms’ capability
to manage regulation

Internal include: attitudes; perceptions and orientation of ownermanager; previous experience; learning orientation; resource capacity
issues; systems and organisation
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
External include: embedded networks; sector specific issues; access to
trusted sources of learning and advice; changes to economic
environment
Capability is not static

Pain points
experienced by SMEs
when dealing with
Inland Revenue
SME Tax compliance costs: A qualitative investigation to identify steps Inland Revenue
could take to reduce effort and compliance cost of SMEs (Inland Revenue, 2014)
http://www.ird.govt.nz/aboutir/reports/research/sme-tax-compliance-costqualitative-report/
Areas of focus for
Inland Revenue for
improving tax
compliance and
helping customers
‘get it right from the
start’
Transformation in
SME customer service
Basics for small to medium businesses http://www.ird.govt.nz/taxagents/compliance/basics-business/sme/sme-compliancefocus-index.html
Basics for everyone - http://www.ird.govt.nz/taxagents/compliance/basics-everyone/
Inland Revenue’s Business transformation
http://www.ird.govt.nz/transformation/about-business-transformation/
Roadmap: http://www.ird.govt.nz/resources/b/0/b0ec93cf-c4a8-4e66-8a9c3845b3e919db/business-transformation-roadmap.pdf
Further Information will be provided at the event.
SME’s - numbers from published research from Inland Revenue
All SMEs (March years)
2009
Total
number
SME
1,112,647
2010
Newly registered SMEs
48,149
Newly
registered
SME
61,114
1,130,708
43,445
55,330
$937,000
28.80%
2011
1,146,193
42,463
52,619
$1,100,000
28.20%
2012
1,164,424
41,202
52,094
$1,120,000
26.90%
2013
1,174,373
22,175
42,254
Year
SME
Closures
Average GST
turnover
Proportion
with debt
$1,001,000
29.40%
Definitions:
• Small- to Medium-sized Enterprises (SMEs)
o All non-individual customers registered for the GST and/or PAYE tax types, excluding non-profit
organisations and those registered in a corporate service centre; and
o Individual customers registered for the GST and/or PAYE tax types, with annual turnover less than
$100 million.
• SME closure - A SME that ended its GST registration in any tax year from 2009 to 2013 where GST
registration cancellations occurred within 12 months of the SME ceasing activity.
• Newly-registered SME - A new SME that registered for PAYE or GST in any tax year from 2009 to 2013.
For SMEs registering more than once, only the first registration after April 2009 is counted.
• GST turnover for newly registered SMEs - The sum of GST assessments in the first 12 months following
a SME’s registration. By this definition, new SMEs registered in 2013 did not have the full 12 months.
• SME incurring debt - A SME is counted as incurring debt if it had a debt element starting in a return
period regardless of how long the debt lasted. This analysis only included debts in the main tax types:
GST, PAYE, and Income Tax.
• Newly-registered SME debt - The percentage of newly registered SMEs incurring debt in the first 12
month after registration.
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Sources:
http://www.ird.govt.nz/resources/6/8/6888ba4a-437b-4de5-bc49-98e6dc8faf0c/r-and-e-adverse-events-year-2-admin.pdf
http://www.ird.govt.nz/aboutir/external-stats/customers/reg-by-customer-group/customers-reg-cust-by-groups.html
http://www.ird.govt.nz/resources/6/8/6888ba4a-437b-4de5-bc49-98e6dc8faf0c/r-and-e-adverse-events-year-2-admin.pdf
Financial capability
Commission for
Financial Capability
Reports from the
start of a 20 year
study by Massey
University’s ‘Fin-Ed
Centre’ to
understand how
financial education is
related to financial
literacy in NZ.
http://www.cffc.org.nz/
‘Financial capability is a core life skill for participating in modern society and economic
life, for individuals to be equipped and empowered to take charge of their lives and
build a more secure – wealthier – future for themselves and their families. Education
can make a difference, and ideally start as early as possible from the beginning of
formal schooling.’
Government statement on Financial Capability
http://www.cffc.org.nz/financial-capability/national-strategy/government-statementon-financial-capability/
How young New Zealanders learn about personal finance: A longitudinal study http://www.massey.ac.nz/massey/fms/Colleges/College%20of%20Business/School%2
0of%20Economics%20&%20Finance/FinEd/documents/FinanceStudyWEBv2.pdf?7B7
DE79F6F2FC1A47A247B28528D8E4C
Findings include:
 There is a relatively low level of financial knowledge compared to studies in
other countries.
 Parents remain the key source of informal financial education for young New
Zealanders, although in some cases the parents’ own personal financial
knowledge may be limited.
 Young New Zealanders often know the key elements of good financial
management, such as the need to save, but may not be putting it into
practice.
Findings about the Ngai Tahu cohort http://www.massey.ac.nz/massey/fms/Colleges/College%20of%20Business/School%2
0of%20Economics%20&%20Finance/FinEd/Research/152306%20Personal%20Finance
%20-%20FinED%20v3.pdf?585D81D5DD7708DE6CCDB09737A9BAFF
Financial capability – What’s out there
Overview of existing
educational
programmes
Evaluations of pilots
to increase financial
literacy in workplaces
http://www.cffc.org.nz/financial-capability/educational-programmes/



Evaluation of the Sorted Workplace Pilot 2014:
http://www.cffc.org.nz/assets/Documents/Sorted-Workplace-Final-Report20140905.pdf
Evaluation of the Wainuiomata Sorted Workplace Programme:
http://www.cffc.org.nz/assets/Documents/Evaluation-of-WainuiomataSorted-Workplace-20150114.pdf
Measuring Financial Literacy section on www.oecd.org
http://www.oecd.org/daf/fin/financialeducation/measuringfinancialliteracy.htm
Migrants
Migrants – understanding the landscape
Annual trends
Migration trends and outlook 2014/2015 (MBIE 2015)
http://www.mbie.govt.nz/info-services/immigration/migration-trends/trends-andoutlook/2014-15
Includes migrant pathways and retention
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Statistics for
international travel
and migration
Presents most recent stats, includes source and destination countries, Statistics NZ
http://www.stats.govt.nz/browse_for_stats/population/Migration/IntTravelAndMigra
tion_HOTPNov15.aspx
How NZ supports
migrants
Immigration New Zealand: Supporting new migrants to settle and work (Office of the
Auditor General, 2013) http://www.oag.govt.nz/2013/new-migrants
Includes:
 Part 3 Fig 4 – overview of agencies involved in immigrant support
 Part 6 – Barriers to settlement for some migrants
http://www.immigration.govt.nz/migrant/stream/invest/
Business migration
categories
Migrants – Research containing interviews with migrant business owners
Needs and
experiences by
ethnicities
Findings from
interviews with
owners and
customers of ethic
economic precincts in
Auckland
Report on compliance
behaviours of
migrants (including
tax compliance)
Review of the
literature about
migrant business
owners in NZ
Various reports, ‘Employers and Employees’ series, 2007-2012
http://newsettlers.massey.ac.nz/publications.php?tab=0
Research to better understand the economic integration of immigrants into NZ
society.
Ethnic precincts in Auckland: Understanding the role and function of the Balmoral
Shops (Auckland City Council, 2015)
http://www.aucklandcouncil.govt.nz/SiteCollectionDocuments/aboutcouncil/planspol
iciespublications/technicalpublications/tr2015015ethnicprecinctaucklandrolefunction
balmoralshops.pdf
Includes: Section 6.3 - Establishing a business
Kaipatiki Migrant Business Support – Project report (ATEED, 2015)
http://infocouncil.aucklandcouncil.govt.nz/Open/2015/12/KT_20151209_ATT_5724_
EXCLUDED_WEB.HTM
Includes: Specific top business concerns for business owners
Understanding migrant businesses: A baseline measure of their characteristics, and
their compliance attitudes, behaviours and drivers (Inland Revenue, 2014)
http://www.ird.govt.nz/resources/6/3/6376c1e2-6fb7-4b33-b7f2cfc7b7271fdf/migrant-businesses-project-report.pdf
Includes:
- Section 2 - Characteristics of migrant businesses and their owners
- P24 – Challenges faced
Immigrant entrepreneurship and tax compliance (Massey University for Inland
Revenue, 2012) http://www.ird.govt.nz/resources/6/2/62da8335-271b-4ad4-8ca8b112851a859b/migrant-sme-literature-review.pdf
Includes:
- key communities such as the Chinese, Korean, Indian, British, South African,
Dutch and Pacific Peoples
Migrants – Other research
Report on the
implications on NZ of
being superdiverse
(ie, over 25%
residents comprised
of migrants)
Superdiversity Stocktake – Implications for Business, Government & New Zealand
(Mai Chen, Super Diversity Centre, 2015)
http://www.superdiversity.org/pdf/Superdiversity_Stocktake%20%20Full%20Document.pdf
Presents key statistics and insights about NZ’s Zealand’s superdiverse population and
outlines challenges for government, society and business. Includes section on Ethnic
Businesses and Migrant Entrepreneurs, p104
Migrants – What’s out there
MBIE information for
migrants on starting a
business
Networking platform
for ethnic people in
https://www.newzealandnow.govt.nz/investing-in-nz/practical-info/starting-abusiness
Includes links to relevant law and government policy.
https://www.epicnz.co.nz/Registration/tabid/196/Default.aspx?returnurl=%2f
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commerce to
showcase their
business.
Migrants – research excerpts
Demographic and industry characteristics of migrant business owners
- By 2006, 23% of all New Zealanders were born overseas. This means New Zealand has one of the
highest proportions of overseas‐born residents for an OECD country, slightly behind Australia (24%),
but ahead of Canada (17%) and the USA (10%). – Massey, 2012.
- New Zealand is one of the most entrepreneurial countries in the world, with 13.9% of the adult
population of 2.4 million counted as entrepreneurs, and 22% of employed New Zealanders counted as
self‐employed. – Massey, 2012.
- Immigrants living in Auckland are more likely to be self‐employed, men are more likely to run a
business than women (perhaps a result of women’s often unpaid labour in a family business), Pacific
peoples are least likely to be self‐employed, and Asian women are more likely than any other ethnic
group of women to be self‐employed. – Massey, 2012.
- Of migrant business owners in Inland Revenue’s (IR) 2014 study, 38% had previously run a business
before migrating to NZ. Those from the UK and Australia were more likely to have had experience
running a business prior to migrating (48% cf. 32% Indian and Chinese respondents). The three most
common industries that migrant businesses belonged to retail trade (17%), accommodation and food
services (11%) and rental, hiring and real estate services (10%). Half (50%) operated as sole traders,
while 34% were companies.
Reasons migrants start a business in Aotearoa New Zealand – Massey, 2012.
-
There are push and pull motivational factors towards entrepreneurship (* = commonly quoted by
immigrant SME owners)

Pull factors*Availability of capital, *High financial returns to self‐employment, Increased
proportion of small firms in the economy, *Flexibility to both firms and employees , Low
corporate tax rate, *Being your own boss, Less rigid contracts for services

Push factors*Unemployment, *Job dissatisfaction (e.g. rigid wage/salary working conditions),
Demographic composition (high proportion of young, children and women in the labour force),
*Non‐transferrable qualifications or skills, High marginal rate of personal taxation, Location and
high relocation costs, More rigid contracts of employment
-
Some motivations are more closely connected with certain ethnic groups. For example, ensuring a
stable family income and fulfilling the conditions of business visas were the two most commonly cited
reasons for starting a business in New Zealand by IIP Korean participants. Similar patterns can be
found among Hong Kong and Taiwan‐born business immigrants. An overseas study suggests that the
key motivation for their entrepreneurship was not to run a productive business but to overcome the
hurdle of government monitoring en route to the ultimate goal of citizenship acquisition.
Funding a business in Aotearoa New Zealand – Massey, 2012.
- It is particularly difficult for immigrant entrepreneurs to obtain start‐up funds from local financial
institutions of host countries as they often lack local credit histories, or mainstream bankers do not
always take applications or proposals seriously. Most immigrant entrepreneurs in New Zealand raised
their initial funds from personal and family savings, regardless of ethnicity. The majority of immigrant
businesses require only minimal capital and have low operation costs, it was viable to save or borrow
from family and/or friends, especially as loans are difficult to obtain and the interest can be high.
Running a business in Aotearoa New Zealand
- Migrant business owners (IR, 2014) generally reported finding it easy to run a business in NZ (refer to
Figure 22). Factors driving this included having bought an existing business, received help from other
owners, and NZ’s culture and business environment. Among the different aspects of running a
business, keeping business records was rated the easiest aspect (65%), followed by learning what tax
their business needed to pay (58%), employing and paying staff (55%), and setting up the business
(55%).
- A higher proportion of Chinese and Indian respondents reported that their accounts and paperwork
were managed by their accountant (82% cf. 41% of those from the UK and Australia). Those from the
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-
-
UK and Australia were more likely to have a paper-based filing/accounting system (52%) or to use an
accounting software package (36%). Almost all (99%) respondents reported that they kept their
business records in English (refer to Figure 18) – IR, 2014.
The most common source of assistance during the set‐up phase was New Zealand‐based friends and
family (94%), followed by overseas‐based friends and family (28%), the Citizens Advice Bureau (11%),
and bank managers and accountants (6%). Speaking English (68%), employing staff (58%), knowing
the right person (42%), obtaining finance (37%), and operating within the local business environment
(37%) were commonly cited problems while establishing their businesses. – Massey, 2012.
Difficulties running a business according to the Auckland City Council’s (2015) study of the Balmoral
shopping centre included*:

For Chinese participants, finding information (14 participants), speaking English (11) and
employing staff (8) were most difficult, while the difficulties for non-Chinese participants were
more evenly spread between obtaining finance (6), knowing the right person (4), and employing
staff (4). Non-Chinese participants also identified a range of other difficulties including: cash
flow; increased regulation and bureaucracy; difficult clients; and burglaries.

With regard to finding information, some Chinese participants were concerned that they did not
understand well enough the compliance regulations associated with establishing and
maintaining a business in New Zealand. They wanted to run a legal business but were not sure
where or who to go to for support and advice
Chinese interviewees described not knowing who to contact numerous times, explaining that
this difficulty was mostly negotiated with support and help from family or friends.


Chinese participants were least likely to report difficulties obtaining finance, they were most
likely to describe difficult financial situations

Research suggests that local accents, colloquialisms and the speed of everyday speech can all
contribute to difficulties for non-native speakers of English. 11 of the 19 Chinese participants
reported difficulties speaking English when first establishing their businesses, as illustrated in the
following quotes

Overall, some Chinese participants appeared to feel quite overwhelmed by the combination of
difficulties they faced, leaving at least one participant ‘lost for words
Chinese participants reported that they received the most help from locally based friends and
family (29), 21 followed by family and friends who lived overseas (13). Non-Chinese participants
also reported high levels of support and assistance from friends and family who lived in New
Zealand (8) but international friends and family did not feature at all.


Chinese participants most commonly received advice and information; professional advice from
trusted business agents and immigration consultants (the latter were especially valued). This was
followed by financial assistance received equally from local (6) and international (6) friends
and/or family

Other forms of support include assistance contacting suppliers and help promoting the business.
Overall, however, there appeared to be very little systematic engagement by Chinese business
owners with available services, professional bodies or central/local government agencies when
establishing their business. Instead, their engagement appeared somewhat ad hoc, with most
advice and information coming from informal networks. The kind of support received by nonChinese participants was more evenly distributed between financial support; advice and
information; and services. Other forms of support included: help finding staff; advice about
suitable suppliers and trades people; assistance with paperwork; and mentoring. both groups
said that they received very practical support from locally based family and friends, including:
help to paint, decorate and renovate the business; assistance with difficult paperwork; help in
the business itself; and the provision of advice about suitable retail products and/or ingredients
The ATEED (2015) interviewed 75 migrant business owners in a region in Auckland, and found that 50%
identified a need for support along the same lines as business owners in Balmoral.
Sources of advice
7
-
-
-
-
-
Immigrants seek different sources for advice prior to and after they arrive in New Zealand.
Accountants (17%) were ranked as the fifth source of advice for principal applicant migrants in a study
of 403 randomly selected LTBV applications conducted in 2002, after consultants (36%), industry
group/chamber of commerce (27%), existing companies (24%) and family (19%) (DoL, 2002:58).
Further, the IRD was not mentioned by Chinese employers at all while it was the most frequently
cited source of assistance by British employers – Massey, 2012.
Indian and Chinese business owners tended to rely more on their accountant/tax agent (usually from
the same ethnic background) to manage their tax affairs and provide tax advice. UK and Australian
business owners were more likely to seek tax information through Inland Revenue channels, and used
a wider suite of business systems to manage their accounts and paperwork. They were also more
likely to receive overseas income – IR, 2014.
In the past year, contacting an accountant/financial advisor was the most common means of sourcing
tax information (77%); followed by seeking information through Inland Revenue (59%) (refer to Figure
16). 31% reported seeking tax information from family and friends. A higher proportion of
respondents from the UK and Australia sought tax information via Inland Revenue channels than their
Chinese and Indian counterparts (74% cf. 50% Indian and Chinese respondents) – IR, 2014.
Auckland City Council’s (2015) study noted Immigration New Zealand provides a range of print and
online services to migrant business owners outlining what new arrivals can expect when living and
working in New Zealand. Resources are also available to those who do not speak English as a first
language and Immigration New Zealand is committed to extending the breadth of these materials.
Other organisations (for example, the Citizen’s Advice Bureau) provide recently arrived migrants with
practical support such as information on social and professional communication; preparing for the
labour market; and health and welfare issues.
Sixty-five per cent did not belong to any business or industry association (refer to Figure 15) – IR,
2014.
Many Chinese interviewees in Auckland City Council’s (2015) study explained that they did not know
that a relevant (business) association existed; that they were too busy to join; that they could not see
the benefits of joining; that they felt their business was too small to benefit from such an
organisation; or they expressed concern about not being able to speak English well in what they
thought would be a monolingual association.
Cultural differences, discrimination and settlement
- Chinese and Indian respondents tended to feel that they were being treated “differently” because of
their ethnicity and reported lower levels of life satisfaction than their UK and Australian counterparts;
UK and Australian business owners appeared to have integrated better into New Zealand society – IR,
2014.
- A higher proportion of Chinese and Indian respondents reported that they were struggling financially
– IR, 2014.
Cash jobs and the hidden economy
- Three in ten migrant business owners reported having engaged in hidden economy activity in the past
year. This was comparatively lower than the 34% to 40% reported in previous research. A higher
proportion of UK and Australian business owners had engaged in non-compliant activity – IR, 2014.
Solutions migrant business owners suggested
Migrant business owners participating in Inland Revenue’s (2014)* study suggested:
- provide assistance packages for new migrants
- Inland Revenue website could be further improved. These ideas ranged from providing: multilingual
websites; more specific information; and relevant “links” to other websites
- more face to face service
- more multi lingual services and staff
- more seminars workshops training programmes
- industry-specific tax information
- more use of print and broadcast media to promote support and services
*Note that only a few migrant groups were included in IR’s migrant business owner research.
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