New Zealand freedom rating

Mundo's New Zealand freedom rating is essentially a freedom index whereby our team of specialists rates a combination of freedoms, including freedom from violence and personal attacks, financial freedom from high taxes and other government levies, and business freedom from government interference.

Political stability: 9

According to the World Democracy Report, New Zealand is the fourth-strongest democracy worldwide. Transparency International ranks it as the least corrupt country and the World Justice Project ranks New Zealand as the seventh-strongest rule of law in the world. This speaks well enough about the institutional stability of the country. New Zealand is geographically far away from the world’s geopolitical issues and spiritually so. No refugee crisis, no coups, no wars, and no political decadence. It is one of the strongest liberal democracies worldwide and one that respects its citizens’ freedoms.

If you’re not well aware of New Zealand’s political system and do a quick search of the government, you will find out that the Labour Party is in government and may feel threatened. Don’t worry too much; New Zealand understands the importance of having a strong business sector and supporting it. We give it a 9 just because we cannot discard potential tax increases in the future

Ease of doing business: 10

New Zealand is one of the freest economies in the world. According to the Heritage Foundation’s Index of Economic Freedom, New Zealand is the third-freest economy after two household names: Singapore and Hong Kong.

New Zealand enjoys paramount fiscal health, with regular budget surplusses each year. Thus, although somewhat high, government spending does not compromise the country’s overall economic health, and the debt comprises 30% of the GDP, which is way lower than most OECD economies.

Agriculture and industrial subsidies are surprisingly low, which fosters innovation and free enterprise, and the average tariff rate is just 1.4%. Add to that rock-solid property rights, one of the most transparent bureaucracies and independent judiciaries around the globe, and you’ll see why New Zealand is where it is.

As if this weren’t enough, New Zealand is the easiest country to do business in the world, per the Doing Business Report of the World Bank. You can start a trading company in half a day, which is less than most offshore companies take to open an IBC. Literally, all you need to do is apply online with the Companies Office and pay NZ$105 for the incorporation. Further, it is also the easiest country to get credit and second-best in the registering property ranking. Dealing with construction permits and paying taxes is also a straightforward process in New Zealand.

Believe us when we tell us that doing business on Middle Earth is a breeze.

Taxes: 7

Doing business in such an advanced economy has its downside, and, as usual, is the taxes. It’s probably not the best place to optimize your taxes but it is arguably way better than a regular OECD economy when the tax burden can sometimes be as high as 50% or even more.

Local companies are taxed at a flat 28% corporate tax rate for their worldwide income and subsidiares or branches will be taxed at the same rate, but only for their local income.

The personal income tax rate goes from $10.5% to 33%, meaning the top tax rate is way lower than in most OECD countries, where it can reach 40 and even 50%. 

Further, New Zealand passed a Transitional Resident Regime in 2004, which means you can live in New Zealand without paying taxes on your foreign income for up to four years, if you qualify (read our tax residency section for more information).

Further, New Zealand does not have inheritance tax and it is one of the handful of OECD countries without capital gains tax at a corporate or personal level.

Thus, even though New Zealand will not provide the same amount of tax optimization as even a midshore jurisdiction, it is among the best you can find among onshore, OECD-oriented jurisdictions.

Lifestyle: 10

Imagine a country the size of the UK, with the quality of life of the best Western economies, but only 4.5 million inhabitants.

So, you basically have your typical Western country, without the pollution, the congestion everywhere, nor the political and humanitarian crises. The best of both worlds.

There’s a good reason why The Lord of the Rings was filmed in New Zealand. This archipelago is a small world in itself. You have surfing beaches, volcanoes, endless mountains, and virgin forests. You can enjoy the non-stop life of a city in Auckland or Wellington, or retire to the countryside or the mountains to relax. 

New Zealanders are known for their balanced work ethic: people understands the value of hard work, but also of resting and enjoying life. Even in the biggest cities, you won’t be that far away from beaches, bike trails, and large national parks. If you are an outdoors lover, New Zealand is your place: Locals love the outdoors, so you will find plenty of hiking and camping plans and people to go surfing.

Living in New Zealand is not particularly affordable, but is not way different that in Europe or major American and Canadian cities. Plus, you can go to smaller cities such as Hamilton or New Plymouth were rents and some products are lower.

Personal safety: 10

The Global Peace Index ranks New Zealand as the second safest country in the world, just after Iceland. Serious crimes rarely occurs even when compared to OECD countries, which are generally safe.

There’s not even dangerous wildlife you should worry about in the country.

Locals are open-mided and welcoming with foreigners and the police is efficient and respectful. Police has strict rules that don’t allow them to abuse citizens and they don’t even carry firearms.

You can feel free and safe enough to enjoy everything New Zealand has to offer, from cycling in the streets and hiking, to catching public transport and enjoying the nightlife at ease.

Mundo’s New Zealand Freedom Rating: AAA, 46/50