Transparency of the Regulatory System
The New Zealand government policies and laws governing competition are transparent, non-discriminatory, and consistent with international norms. New Zealand ranks high on the World Bank’s Global Indicators of Regulatory Governance, scoring a 5.4 out of a possible 6, but is marked down on indicators relating to the method of conducting and reporting on public consultation.
Draft bills and regulations including those relating to FTAs and investment law, are generally made available for public comment, through a public consultation process.
The Regulatory Quality Team (RQT) within the New Zealand Treasury is responsible for the strategic coordination of the Government’s regulatory management system. Treasury exercises stewardship over the regulatory management system to maintain and enhance the quality of government-initiated regulation. The Treasury’s responsibilities include the oversight of the performance of the regulatory management system as a whole and making recommendations on changes to government and Parliamentary systems and processes. These functions complement the Treasury’s role as the government’s primary economic and fiscal advisor.
In 2015 the government announced a program to lift regulatory quality following a review of the performance and condition of the regimes in New Zealand’s seven major regulatory departments – the Department of Internal Affairs (DIA), IRD, MBIE, Ministry for the Environment, Ministry of Justice, MPI, and the Ministry of Transport. The government implemented most of the 44 recommendations after an independent report found New Zealand’s regulation framework was not sufficiently keeping up with the changing global environment.
In 2017, the government released their Expectations Good Regulatory Practice which sought to strengthen and embed regulatory stewardship and implement the report’s recommendations. These expectations have been incorporated into the Cabinet’s Impact Analysis Requirements, which are both a process and an analytical framework that encourages a systematic and evidence-informed approach to policy development, with key output being a revision to the Regulatory Impact Assessment (RIA) requirements. To help improve transparency in the regulatory process, RIAs are published on the Treasury’s website at the time the relevant bill is introduced to Parliament or the regulation is gazetted, or at the time of Ministerial release. A RIA provides a high-level summary of the problem being addressed, the options and their associated costs and benefits, the consultation undertaken, and the proposed arrangements for implementation and review.
While regulations are not in a centralized location in a form similar to the United States Federal Register, the New Zealand government requires the major regulatory departments to publish an annual regulatory stewardship strategy.
While some standards are set through legislation or regulation, the vast majority of standards are developed through Standards New Zealand, which is now a business unit within MBIE. The Standards and Accreditation Act 2015 set out the role and function of the Standards Approval Board which commenced from March 2016. Standards New Zealand operates as it did previously as a Crown entity, but by moving within MBIE it no longer offers membership subscription services, and instead operates on a cost-recovery basis. The majority of standards in New Zealand are set in coordination with Australia.
The Resource Management Act 1991 (RMA) often draws criticism from both foreign and domestic investors as a barrier to investment in New Zealand. The RMA regulates access to natural and physical resources such as land and water. Critics contend that the resource management process mandated by the law is unpredictable, protracted and subject to undue influence from competitors and lobby groups. A government commissioned report released in 2015 estimated the RMA has added NZD 30 billion (USD 22 billion) to building costs.
There have been several cases in which companies have been found to use the RMA’s objections submission process to stifle competition. Investors have also raised concerns that the law is unequally applied between jurisdictions because of the lack of implementing guidelines. The Resource Management Amendment Act 2013 and the Resource Management (Simplifying and Streamlining) Amendment Act 2009 were passed to address these concerns.
The Resource Legislation Amendment Act 2017 (RLAA) is considered the most comprehensive set of reforms to the RMA since its inception in 1991. It contains almost 40 amendments and makes significant changes to five different Acts including the RMA, the Conservation Act 1986, Reserves Act 1977, Public Works Act 1981, and the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act 2013. Broadly, the RLAA attempts to balance environmental management with the need to increase capacity for housing development. It also aims to align resource consent processes in a consistent manner among New Zealand’s 78 local councils, by providing a stronger national direction, a more responsive planning process, and improved consistency with other legislation.
The Public Works Act (PWA) 1981 enables the Crown to acquire land for public works by agreement or compulsory acquisition and prescribes landowner compensation. New Zealand continues to face a significant demand for large-scale infrastructure works and the PWA is designed to ensure project delivery and not be a barrier to infrastructure development. Compulsory acquisition will be exercised only after an acquiring authority (through an accredited supplier) has made all reasonable endeavors to negotiate in good faith the sale and purchase of the owner’s land, without reaching an agreement. The land owner retains the right to have their objection heard by the Environment Court, but only in relation to the taking of the land, not to the amount of compensation payable. The RLAA amendment to the PWA aims to improve the efficiency and fairness of the PWA compensation, land acquisition, and Environment Court objection provisions.
Parliament passed the Land Transfer Act in July 2017. It aims to simplify and modernize the law to make it more accessible and to improve certainty of property rights. It empowers courts with limited discretion to restore a landowner’s registered title in rare cases in the event of fraud or other illegality where it is warranted to avoid a manifestly unjust result.
In 2014 New Zealand joined the Open Government Partnership, and the government published its second National Action Plan in October 2016. Areas of commitment include advancements in access to open data, public engagement, openness with the government budget process, and access to legislation. In October 2017 the government released a report of a mid-term self-assessment of progress on the Action Plan. As part of the Independent Reporting Mechanism, an OGP-appointed independent reporter reports twice on each two-year OGP national plan, a progress report at the end of the first year and a further report at the end of the second year. New Zealand’s reporter made their mid-term review of New Zealand’s progress available on the OGP International website in January 2018. In March 2018 New Zealand became one of 19 countries to sign the Open Data Charter.
Statistics New Zealand is responsible for the management of the Government’s Open Government Information and Data Program (Open Data NZ). Recent initiatives include websites dedicated to helping business, granting online access for businesses to Stats NZ surveys, convening public consultation on ways to improve data supply, and the Data Futures Partnership.
International Regulatory Considerations
In recent years the New Zealand government has introduced laws to enhance regulatory coordination with Australia as part of their Single Economic Market agenda agreed to in 2009. In February 2017 the Patents (Trans-Tasman Patent Attorneys and Other Matters) Amendment Act took effect creating a single body to regulate patent attorneys in both countries. Other areas of regulatory coordination include insolvency law, financial reporting, competition policy, consumer policy and the 2013 Trans-Tasman Court Proceedings and Regulatory Enforcement Treaty, which allows the enforcement of civil judgements between both countries.
In 2016 the Financial Markets Authority issued two notices, the Disclosure Using Overseas GAAP Exemption and the Overseas Registered Banks and Licensed Insurers Exemption Notice, which ease compliance costs on overseas entities by allowing them under certain circumstances to use United States statutory accounting principles (overseas GAAP) rather than New Zealand GAAP, and the opportunity to use an overseas approved auditor rather than require a New Zealand qualified auditor.
New Zealand is a Party to the World Trade Organization’s (WTO) Agreement on Technical Barriers to Trade (TBT). Standards New Zealand is responsible for operating the TBT Enquiry Point on behalf of MFAT. From 2016, Standards New Zealand became a business unit within MBIE administered under the Standards and Accreditation Act 2015. Standards New Zealand establishes techniques and processes built from requirements under the Act and from the International Organization for Standardization.
The Standards New Zealand TBT enquiry point service provides a website for producers and exporters for recently proposed TBT Notifications and associated documents such as draft or actual regulations or standards. They also provide contact details for the Trade Negotiations Division of MFAT to respond to businesses concerned about proposed measures.
In August 2017 the government launched an online “Clearing House” to provide a centralized point of contact for businesses to access information and support on trade barriers. The website allows exporters to report issues, seek government advice and assistance with non-tariff barriers (NTB) and other export issues. The Clearing House tracks and traces the assignment and resolution issues across agencies on behalf of the exporter, and aims to provide the Government with an accurate and timely account of NTB and other issues encountered by exporters. The online portal involves the participation of Customs, MFAT, MPI, MBIE, and NZTE. The Clearing House can be found at: https://tradebarriers.govt.nz/
New Zealand ratified the WTO Trade Facilitation Agreement (TFA) in September 2015 and entered into force in February 2017. New Zealand was already largely in compliance with the TFA which is expected to benefit New Zealand agricultural exporters and importers of perishable items to enhanced procedures for border clearances.
Legal System and Judicial Independence
New Zealand’s legal system is derived from the English system and comes from a mix of common law and statute law. The judicial system is independent of the executive branch and is generally open, transparent, and effective in enforcing property and contractual rights. The highest appeals court is a domestic Supreme Court, which replaced the Privy Council in London and began hearing cases July 1, 2004. New Zealand courts can recognize and enforce a judgment of a foreign court if the foreign court is considered to have exercised proper jurisdiction over the defendant according to private international law rules. New Zealand has well defined and consistently applied commercial and bankruptcy laws. Arbitration is a widely used dispute resolution mechanism and is governed by the Arbitration Act 1996, Arbitration (Foreign Agreements and Awards) Act 1982, and the Arbitration (International Investment Disputes) Act 1979.
In 2016 the omnibus Judicature Modernization Bill was passed to improve and consolidate older pieces of legislation governing the New Zealand court system. The legislation enables the sharing of court information, the establishment of a new judicial panel to hear certain commercial cases, increases the monetary limit of the District Court’s civil jurisdiction, and improves accessibility to final written judgments by publishing them online.
During 2017 the government continued efforts to modernize and improve the efficiency of the courts system, by introducing several pieces of legislation including the Courts Matters Bill, the Tribunals Powers and Procedures Legislation Bill, the Trusts Bill (which clarifies and simplifies core trust principles and essential obligations for trustees to improve understanding about how trusts operate. Importantly, it also preserves the flexibility of the common law, allowing trust law to continue to evolve through the courts), and the Legislation Bill (to enhance accessibility to all types of New Zealand legislation).
The Tribunals Powers and Procedures Legislation Bill (the Tribunals Bill) and the Courts Matters Bill. The Tribunals Bill and the Courts Matters Bill amend tribunals and courts legislation respectively to: reduce the time it takes to hear and resolve matters and improve users’ experience of the courts and tribunals system; enable greater use of modern technology to further improve efficiency, effectiveness, and timeliness; simplify and standardize statutory powers and procedures to improve productivity and efficiency; and provide better consumer protection and redress, and greater access to justice.
Legislation to modernize and consolidate laws underpinning contracts and commercial transactions came into effect on September 1, 2017. The Contract and Commercial Law Act 2017 consolidates and repeals 12 Acts that date between 1908 and 2002.
Laws and Regulations on Foreign Direct Investment
Overseas investments in New Zealand assets are screened only if they are defined as sensitive within the Overseas Investment Act 2005, as mentioned in the previous section. The OIO, a dedicated unit located within LINZ, administers the Act. The Overseas Investment Regulations 2005 set out the criteria for assessing applications, provide the framework for applicable fees, and whether the investment will benefit New Zealand. Ministerial Directive Letters are issued to the OIO by the Government to instruct the OIO on their general policy approach, and matters relating to the OIO’s functions, powers, and duties as regulator. Letters have been issued in December 2010 and November 2017. Substantive changes, such as inclusion of another asset type within “sensitive land,” requires a legislative amendment to the OIA. The government ministers for finance and for land information are responsible for assessing OIO recommendations and can choose to override OIO recommendations on approved applications. Ministers’ decisions on OIO applications can be appealed by the applicant in the New Zealand High Court. For more see: http://www.linz.govt.nz/regulatory/overseas-investment
In situations where New Zealand companies are acquiring capital injections from overseas investors that require OIO approval, they must meet certain criteria regarding disclosure to shareholders and fulfil other responsibilities under the Companies Act 1993. Failure to do so can affect the overseas company’s application process with the OIO.
The LINZ website reports on enforcement actions they have taken, including the number of compliance letters issued, the number of warnings and their circumstances, referrals to professional conduct body in relation to OIO breach, and disposal of investments.
Competition and Anti-Trust Laws
The New Zealand Commerce Commission is an independent Crown entity charged with enforcing legislation that promotes competition. The key competition law statute in New Zealand is the Commerce Act 1986, which covers both restrictive trade practices and the competition aspects of merger and acquisition transactions. In addition, the Commerce Commission enforces a number of pieces of legislation that, through regulation, aim to provide the benefits of competition in markets with certain natural monopolies, such as the dairy, electricity, gas, airports, and telecommunications industries.
The Commerce Act 1986 prohibits contracts, arrangements, or understandings that have the purpose, or effect, of substantially lessening competition in a market, unless authorized by the Commerce Commission. Before granting such authorization, the Commerce Commission must be satisfied that the public benefit would outweigh the reduction of competition. The Commerce Commission has legislative power to block a merger or takeover if it would result in the new company gaining a dominant position in the market.
The Dairy Industry Restructuring Act 2001 (DIR) authorized the amalgamation of New Zealand’s two largest dairy co-operatives to create Fonterra Co-operative Group Limited (Fonterra). The DIR is designed to manage Fonterra’s dominant position in the dairy market, until sufficient competition has emerged. Among other things, the DIR requires that Fonterra must accept all applications from farmers wanting to become supplying shareholders. The DIR’s automatic expiry provisions were triggered in 2015, when other dairy processors collected more than 20 percent of milk solids in the South Island.
A review by the Commerce Commission in 2016 found competition was not yet sufficient to warrant the removal of the DIR provisions, but it made recommendations to create a pathway to deregulation, and for another review to be conducted in five years’ time. In 2017 the new Government announced it would conduct a review of key issues facing the dairy industry and the DIR, including, environmental impacts, land use, Fonterra’s obligation to collect milk, and optimizing outcomes for New Zealand farmers and consumers. The Dairy Industry Restructuring Amendment Act was passed in February 2018 as an interim measure – pending the review – to ensure that the DIR provisions will not expire in the South Island on May 31, 2018.
The Commerce Commission is also charged with monitoring competition in the telecommunications sector. Under the 1997 WTO Basic Telecommunications Services Agreement, New Zealand has committed to the maintenance of an open, competitive environment in the telecommunications sector. Key reforms of the sector, through legislation enacted in 2001 and 2006, include the appointment of a commissioner responsible for resolving commercial disputes, the introduction of regulated services, the strengthening of the monitoring and enforcement, and the operational separation of Spark.
In 2016 the government announced a review of the Telecommunications Act 2001 to provide better support for competition, innovation and investment in the sector. As mentioned in the previous section, Chorus is considered a natural monopoly for providing New Zealand’s telecommunications infrastructure following its demerger from Spark in 2011.
Chorus won contracts from the government to build 70 percent of New Zealand’s new ultra-fast broadband fiber-optic cable network and has received subsidies. Chorus is listed on the NZX stock exchange and the Australian Stock Exchange (ASX), and has American Depositary Shares traded on the over the counter market in the United States.
The telecommunications service obligations (TSO) regulatory framework established under the Telecommunications Act 2001 enables certain telecommunications services to be available and affordable. A TSO is established through an agreement under the Telecommunications Act between the Crown and a TSO provider. Currently there are two TSOs. Spark (supported by Chorus) is the TSO Provider for the local residential telephone service, which includes charge-free local calling. Sprint International is the TSO Provider for the New Zealand relay service for deaf, hearing impaired and speech impaired people. Costs for subsidizing telecommunications services supplied under TSOs are funded through the Telecommunications Development Levy (TDL) collected from the telecommunications industry. The Commerce Commission determines the TSO charge paid to a TSO Provider and the proportion of the TDL borne by each liable telecommunications service provider.
As a monopoly providing wholesale services to retailers and not directly to consumers, the Commerce Commission regulates the amount Chorus can charge retailers to access its network based on what it would cost to replace the Chorus copper-line network, using the most efficient combination of modern technologies. In 2014 a case brought by Chorus against the Commerce Commission that eventually went to the Court of Appeal, after Chorus claimed the price determination issued by the Commerce Commission was too low. Chorus was ultimately allowed to charge a higher price, and the largest retail provider Spark raised their price to consumers and alleged that the lack of a stable and predictable pricing framework over a four-year period had affected their financial performance.
In February 2017 the government announced a review of the regulation of copper line services, and build a regulatory framework primarily on New Zealand’s fiber-optic cable network to establish a stable and predictable regulatory framework. The Telecommunications (New Regulatory Framework) Amendment Bill which passed its first reading in August 2017, will deregulate copper lines in areas where Ultra-Fast Broadband (UFB) fibre-optic cable is also available, and eliminate copper line regulation from 2020. The Commerce Commission would be required improve accessibility and its reporting retail service quality and to review the Telecommunications Dispute Resolution Service to maintain its efficacy. The Commerce Commission will also be able to make codes that address retail service quality, if the industry fails to develop industry-led codes that are adequate. It is seeking remove the Telecommunications Service Obligation TSO obligation. In areas, typically rural, where fiber is not available, the TSO obligation will be retained and Chorus will be required to continue supplying copper services at prices capped at 2019 levels.
The Commerce Commission has a regulatory role to promote competition within the electricity industry under the Commerce Act and the Fair Trading Act 1986. As natural monopolies, the electricity transmission and distribution businesses are subject to specific additional regulations, regarding pricing, sales techniques, and ensuring sufficient competition in the industry. The International Energy Agency (IEA) released its five-yearly review of the New Zealand energy market in February 2017 and made recommendations for the structure, governance and regulation of the electricity distribution service sector, and for network regulation and retail market reforms to ensure efficient transmission pricing.
The New Zealand motor fuel market became more concentrated after Shell New Zealand sold its transport fuels distribution business in 2010, and Chevron sold its retail brands Caltex and Challenge to New Zealand fuel distributor Z-Energy in 2016. The Commerce Commission approved Z-Energy’s application to acquire 100 percent of the shares in Chevron New Zealand on the condition it divest 19 of its retail sites and one truck stop in locations where it considered competition would be substantially reduced as a result of the merger. Z-Energy holds almost half of the market share for fuel distribution in New Zealand.
In August 2017 the Commerce (Cartels and Other Matters) Amendment Act was passed to enable easier enforcement action against international cartels. It created a new clearance regime allowing firms to test their proposed collaboration with the Commerce Commission and get greater legal certainty before they enter into the arrangements. It also expands the range of prohibited conduct to include price fixing, restricting output, and allocating markets, and expands competition oversight to the international liner shipping industry. It empowers the Commerce Commission to apply to the New Zealand High Court for a declaration to determine if the acquisition of a controlling interest in a New Zealand company by an overseas person will have an effect of “substantially lessening” competition in a market in New Zealand.
The government introduced the Commerce (Criminalization of Cartels) Amendment Bill in February 2018 to criminalize cartel behavior – a provision that was removed from the 2017 amendment during its passage through the Parliament process. If passed, the bill will introduce imprisonment as a penalty for engaging in cartel conduct. The government acknowledges it is not currently a significant issue but believes the existing civil regime is an insufficient deterrent and criminalizing cartel behavior provides a certain and stable operating environment for businesses to compete. It also aims to bring New Zealand in line with overseas jurisdictions that impose criminal sanctions for cartel conduct, enhancing the ability of the Commerce Commission to cooperate with its overseas counterparts in investigations of international cartels.
The Commerce Commission has two international cooperation arrangements (signed with Australia in 2013 and Canada in 2016) that allow the sharing of compulsorily acquired information, and provide investigative assistance. The arrangements help effective enforcement of both competition and consumer law.
Expropriation and Compensation
Expropriation is generally not an issue in New Zealand, and there are no outstanding cases. New Zealand ranks first in the World Bank’s 2017 Doing Business report for “registering property” and for “protecting minority investors.”
The Public Works Act 1981 provides the government with the statutory authority to acquire land for a public work. While the government’s powers are wide, it can only acquire land, whether by negotiation or compulsorily, in accordance with the Act. Where voluntary agreement cannot be reached the Act provides for compulsory acquisition by the Crown through the Minister of Lands. This power is exercised only after reasonable endeavors have been made to negotiate in good faith the sale and purchase of the land. The owner has the right to object in the New Zealand Environment Court but only in relation to the land, and not to the amount of compensation payable. If the owner objects to the compensation offered, they can request it be determined by the Land Valuation Tribunal.
The RLAA has amended the Public Works Act 1981 (PWA) with higher compensation limits. The land owner retains the right to have their objection to a compulsory acquisition heard by the Environment Court, but only in relation to the taking of the land, not to the amount of compensation payable. The RLAA amendment aims to improve the efficiency and fairness of the PWA compensation, land acquisition, and Environment Court objection provisions.
The new government has indicated it will use compulsory acquisition under the PWA if there is evidence of land banking, and if it is delaying new government housing development. The government has established a KiwiBuild program that aims to build 100,000 affordable homes over ten years, with half being in Auckland.
ICSID Convention and New York Convention
New Zealand is a party to both the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the Washington Convention), and to the New York Convention of 1958 on the Recognition and Enforcement of Foreign Arbitral Awards.
Proceedings taken under the Washington Convention are administered under the Arbitration (International Investment Disputes) Act 1979. Proceedings taken under the New York Convention are now administered under the Arbitration Act 1996.
Investor-State Dispute Settlement
Investment disputes are rare, and there have been no major disputes in recent years involving U.S. companies. The mechanism for handling disputes is the judicial system, which is generally open, transparent and effective in enforcing property and contractual rights.
Investment disputes brought against other foreigners by the New Zealand government have been largely due to non-compliance of the investors’ obligations under the OIO Act or their failure to gain OIO approval before making their investment.
Most of New Zealand’s recently enacted FTAs contain Investor-State Dispute Settlement (ISDS) provisions. The new government signaled it will seek to remove ISDS from future FTAs, having secured exemptions with several CPTPP signatories in the form of side letters.
International Commercial Arbitration and Foreign Courts
Arbitrations taking place in New Zealand (including international arbitrations) are governed by the Arbitration Act 1996. The Arbitration Act includes rules based on the United Nations Commission on International Trade Law (UNCITRAL) and its 2006 amendments. Parties to an international arbitration can opt out of some of the rules, but the Arbitration Act provides the default position.
The Arbitration Act also gives effect to the New Zealand government’s obligations under the Protocol on Arbitration Clauses (1923), the Convention on the Execution of Foreign Arbitral Awards (1927), and the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958). Obligations under the Washington Convention are administered under the Arbitration (International Investment Disputes) Act 1979 as mentioned previously.
The New Zealand Dispute Resolution Centre (NZDRC) is the leading independent, nationwide provider of private commercial, family and relationship dispute resolution services in New Zealand. It also provides international dispute resolution services through its related entity, the New Zealand International Arbitration Centre (NZIAC). The NZDRC is willing to act as an appointing authority, as is the Arbitrators’ and Mediators’ Association of New Zealand (AMINZ).
Forms of dispute resolution available in New Zealand include formal negotiations, mediation, expert determination, court proceedings, arbitration, or a combination of these methods. Arbitration methods include ‘ad hoc,’ which allows the parties to select their arbitrator and agree to a set of rules, or institutional arbitration, which is run according to procedures set by the institution. Institutions recommended by the New Zealand government include the International Chamber of Commerce (ICC), the American Arbitration Association (AAA), and the London Court of International Arbitration (LCIA).
The Arbitration Amendment Act passed in 2016, amends the Arbitration Act 1996 to provide for the appointment of an “appointed body” to exercise powers which were previously powers of the High Court. It also provides for the High Court to exercise the powers in the event that the appointed body does not act, or there is a dispute about the process of the appointed body. These amendments came into force in March 2017. Since then the Minister of Justice has appointed the AMINZ the default authority for all arbitrations sited in New Zealand in place of the High Court.
In 2017 AMINZ issued its own Arbitration Rules based on the latest editions of rules published in other Model Law jurisdictions, to be used in both domestic and international arbitrations, and consistent with the 1996 Act.
In March 2017 the Arbitration Amendment Bill was introduced to bring New Zealand’s approach to the preserving the confidentiality of trust deed clauses in line with foreign arbitration legislation and case law. If passed the bill ensures arbitration clauses in trust deeds are given effect to extend the presumption of confidentiality in arbitration to the presumption of confidentiality in related court proceedings under the Act because often such cases arise from sensitive family disputes. The bill also defines the grounds for setting aside an arbitral award and confirms the consequence of failing to raise a timely objection to an arbitral tribunal’s jurisdiction.
Bankruptcy is addressed in the Insolvency Act 2006, the Receiverships Act 1993, and the Companies Act 1993. The Insolvency (Cross-border) Act 2006 implements the Model Law on Cross-Border Insolvency adopted by the United Nations Commission on International Trade Law in 1997. It also provides the framework for facilitating insolvency proceedings when a person is subject to insolvency administration (whether personal or corporate) in one country, but has assets or debts in another country; or when more than one insolvency administration has commenced in more than one country in relation to a person.
New Zealand bankrupts are subject to conditions on borrowing and international travel, and violations are considered offences and punishable by law.
In the World Bank’s Doing Business 2018 Report New Zealand is ranked 32nd in “resolving insolvency”. Relative to other high-income OECD countries, New Zealand scores lower on the strength of its insolvency framework, specifically citing fewer opportunities for creditors to participate directly in the insolvency and reorganization processes.
The registration system operated by the Companies Office within MBIE, is designed to enable New Zealand creditors to sue an overseas company in New Zealand, rather than forcing them to sue in the country’s home jurisdiction. This avoids attendant costs, delays, possible language problems and uncertainty due to a different legal system. An overseas company’s assets in New Zealand can be liquidated for the benefit of creditors. All registered ‘large’ overseas companies are required to file financial statements under the Companies Act 1993. See: https://www.companiesoffice.govt.nz/companies/learn-about/overseas-companies/managing-an-overseas-company-in-new-zealand