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Overview
The UK’s services industry is a powerhouse for the UK economy, accounting for around 80% of total UK economic output. The UK and New Zealand already have deep cultural and business links, and strong existing cooperation. The UK-New Zealand Free Trade Agreement (FTA) will help strengthen our trading relationship, potentially increasing bilateral trade by the equivalent of £1.7 billion in the long run. In the four quarters to the end of Q3 2022, services exports to New Zealand amounted to £591 million (40.6%) of all UK Exports to New Zealand, a significant increase of 30% for the same period for the previous year (ONS GDP output approach – low-level aggregates, 2022).
The FTA enhances our strong relationship in services and investment. It guarantees market access and ensures that UK service suppliers can compete in New Zealand on an equal footing. The FTA allows professionals, such as lawyers and management consultants, to operate in New Zealand more easily through more certain business travel. The FTA also increases opportunities for investors, making it easier to expand their footprint in New Zealand, and boosts the UK’s world-leading financial services sector. The FTA protects the intellectual property of the creative industries, with New Zealand extending the term of copyright protection by 20 years for authors.
New opportunities for services exporters:
Are you planning to bid on a government contract to supply a service in New Zealand?
Your business will have greater access to a wider range of New Zealand government procurement opportunities than ever before and if successful, you will also benefit from more certain business travel.
Do you want to transfer employees from your UK branches to New Zealand?
For those qualifying as Intra-Corporate Transferees, New Zealand now provides certainty that they can be granted entry for up to three years and that an accompanying spouse or dependant has the right of entry and temporary stay for an equal period to that of the business person under this category, subject to meeting the relevant immigration requirements.
Are you a Fintech that uses AI to analyse transaction data?
Your business will be able to move data more freely across the two countries and you will not be required to store data in costly New Zealand servers.
Better business travel and temporary entry for British professionals
This FTA provides greater certainty and access for British professionals looking to deliver services in person in New Zealand. The FTA applies to business professionals under the following categories: Business Visitors, Intra-Corporate Transferees, Contractual Service Suppliers, Independent Professionals, Installers and Servicers.
For contractual service suppliers, New Zealand has committed to allowing UK business persons across a number of key sectors to deliver contracts in New Zealand. This includes professionals such as accountants and financial service providers.
Intra-Corporate Transferees will now have certainty that they are able to work in New Zealand for up to three years and bring their partners and dependant children with them to New Zealand for that time. For work visas granted for longer than 6 months, a Partner of a Worker Work Visa may be available for spouses. Company transferees will not be subject to economic needs tests or quantitative restrictions and New Zealand has committed to a target of processing visa applications for Intra-Corporate Transferees within 15 days of the application being submitted, where practicable.
Prospective visa applicants should check with New Zealand Immigration for full visa details and eligibility criteria. Please note that final visa names are set by the destination country and may vary from the FTA business travel category titles.
Financial services
Financial services are already an important aspect of the UK’s services trade relationship with New Zealand. In the four quarters to the end of Q3 2022, Insurance and Pensions, Business Services and Financial Services accounted for 54% of all service exports to New Zealand (ONS UK Trade in Services by type, non-seasonally adjusted, Q3 2022). The FTA supports the longterm competitiveness and stability of the UK's financial services sector by ensuring their ability to deliver high-value services to New Zealand clients. It also supports innovation in financial services in both countries by ensuring the free flow of financial data across borders, recognising our shared goals in sustainable finance, and by promoting the UK’s leadership in fintech.
The FTA includes non-discrimination rules that will ensure that both UK and New Zealand firms are treated fairly when providing services in the other country. For the first time, the UK and New Zealand have committed to allow both parties’ firms to provide insurance of large risks relating to multinational corporations in each other’s country. There is also a high standard commitment that secures the ability of investment firms to provide portfolio management services to clients such as pension funds and insurance companies in our respective countries.
The free flow of financial data is key to the global interconnectedness of the financial services industry. The FTA secures the ability of UK financial firms and other service suppliers to operate across borders and within New Zealand without unjustifiable data localisation requirements or barriers to data flows. This means that UK businesses supplying financial services in New Zealand are not obliged to store financial data in New Zealand for unjustified reasons, reducing the costs involved for companies to set up additional data servers.
Professional services and recognition of professional qualifications
The UK’s professional and business services sector is one of the largest and most successful sectors in the UK. To support this important sector, the FTA commits the UK and New Zealand to encourage their regulators to establish and maintain routes to recognition for each other’s professional qualifications, which could remove costly and burdensome requirements.
The FTA has secured reciprocal access for UK and New Zealand lawyers wishing to practice law in New Zealand and the UK respectively. This gives UK lawyers certainty and clarity that they can advise on home (UK), foreign and international law in New Zealand using their ‘home’ title and qualification i.e. without the need for requalification or needing to have their qualifications formally recognised in New Zealand. This will include arbitration, mediation, and conciliation services, for example in high-value areas such as construction and engineering.
The Professional Services Working Group will help to monitor and drive results on the recognition of professional qualifications by facilitating engagement between UK and New Zealand governments and relevant regulatory bodies.
Investment
Fewer UK investments will need to pass under New Zealand's overseas investment regime, with only those over $200 million New Zealand Dollars and those in certain sensitive sectors being subject to review. This is a doubling of the UK's previous threshold. For the first time New Zealand has agreed to a whole economy market access provision within the Investment chapter, reflecting improved market access for all investors in addition to easier processes.
New Zealand has gone further than ever before on removing nationality and residency requirements for senior managers and boards of directors, allowing UK companies to maintain control over business operations and recruitment.
UK investors will be covered by a range of investment protections. This includes expropriation and minimum standard of treatment provisions which guarantee UK investors protection from the unlawful expropriation of assets, and discriminatory, unfair, or arbitrary treatment by New Zealand.
Intellectual property
The FTA includes ambitious Intellectual Property (IP) provisions that encourages innovation and creativity by allowing for the balanced protection and enforcement of IP rights. The FTA includes provisions relating to the registration and renewal of trade marks, and will support enforcement against online intellectual property infringement, by enshrining the availability of injunctive relief to block infringing websites. The text also provides for alternative dispute resolution mechanisms and supports voluntary industry initiatives that seeks to promote IP infringement awareness.
Digital trade
The UK digital sector is a key driver of global innovation thanks to strong investment in digital infrastructure such as 5G (DCMS, Connected Growth: Digital Industries, 5th April 2019). It exported £110 million of digital services to New Zealand in 2020 (DCMS, Sectors Economic Estimates 2020: Trade in Services, March 2022) and 70% of its services were delivered digitally in 2021 (ONS Imports and exports of services by country, by modes of supply, 2021 ).
The FTA harnesses the potential of digital technologies to make all forms of trade cheaper, easier and faster. It ensures the free flow of trusted data and world-leading standards for personal data protection. It also ensures the legal recognition of electronic contracts and signatures. It allows our businesses to trade and invest more freely, sets new global standards and creates opportunities for the UK and New Zealand to collaborate on shared challenges.
Traders will not be required to locally store or process data as a requirement for conducting business in New Zealand, unless for a justified reason. This means that British businesses can plan their business growth knowing that they can collect, process, and transfer data between the two countries, without facing unnecessary red tape or costs.
Both countries have committed to cooperate and promote digital innovation, allowing emerging technologies to maximise trade benefits, as well as digital inclusion, so that all businesses and people can participate in and benefit from digital trade opportunities.
Procurement
British suppliers will have legally guaranteed, nondiscriminatory access to procurement opportunities from a wider range of New Zealand government bodies than before. The FTA will ensure procurement processes are accessible and fair for both UK and New Zealand suppliers, including SMEs.
Cleantech
One estimate forecasts up to £170 billion in export sales by the UK's low carbon economy by 2030, rising to over £500 billion by 2050 (UK Board of Trade, Green Trade, July 2021). The FTA will open up new opportunities in New Zealand as the demand for British innovation and green tech increases.
The New Zealand government have committed to carbon neutrality by 2050. The demand for innovative climate tech solutions can be partially met by New Zealand's growth in climate tech companies, however, the UK's cleantech sector has the ability, unique solutions and capacity to provide further support.
Opportunities in the New Zealand market have been identified in digital carbon accounting, Scope 3 supply chain emissions monitoring, CO2 monitoring, industrial process efficiency, energy storage, reducing climate impact and agri-tech solutions using robotics and low GHG fertilisers.
Additional information for selling services in New Zealand
Providing services in New Zealand will have other consequences including for tax, intellectual property and local labour regulations.
Please refer to the following for more advice:
Doing business in New Zealand
The UK and New Zealand share a common language and culture, as well as business and legal practices such as intellectual property (IP) protection and the rule of law. These similarities make New Zealand a relatively easy place for British companies to do business.
New Zealand is a highly educated, wealthy and tech-savvy market where around 42% of the population live in New Zealand’s 3 major cities of Auckland, Wellington and Christchurch making it easy to prioritise where to test and launch your product or service.
New Zealand is also a logical onward step for UK companies to test the market when already doing business in Australia.
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