This is the final chapter of Tales from Retardicon 6 – The Business of Investor Visas,  as told to E2NZ.org by a guest author.

“If you are foolish enough to migrate to New Zealand, then I would recommend you keep your investments abroad. One advantage of doing so is that you can become a New Zealand tax resident, but not have to pay taxes on income sourced from overseas for the first four years. Because of the double taxation agreements, you will no longer have to pay taxes in your own country, unless if you are from the US. This might be a good strategy for wealthy migrants that can shield themselves from the pitiful and unsavoury parts of New Zealand and avoid paying taxes anywhere. I would recommend only staying the minimum 183 days required to establish tax residency during the summer to avoid the cold, damp, and mouldy homes. None of the upmarket houses I have seen actually has central heating or proper insulation, but I digress. However, consult with an expert before trying this.

The funniest anecdote when searching for a business to buy was phoning a Kiwi about his business. He told me that I would have to show him a bank statement confirming that I could pay his asking price before negotiations would proceed any further! Of course, I politely declined. It never occurred to him that I might not want to disclose my financial position to haggle for a better price etc. The Kiwi con artist was trying to see what he could swindle from me. BTW, New Zealand has no bank guarantee, so do not leave more than the minimum in any New Zealand-based financial institution.

Whenever I dealt with Kiwi business sellers or brokers, one could see the predator like look on their faces. They were extremely stupid, but nonetheless crafty and cunning. They were trying to suss out how much they could get out of you and would tell you whatever was necessary to swindle you.

Migrants need to know that the legal institutions and enforcement mechanisms in New Zealand are nothing like the New Zealand government advertises. They do not deter bad behaviour because they do not punish the perpetrators. For instance, one “financial advisor” in New Zealand, told a couple from Singapore to invest all of their NZ $1.3 million in a start up business. The couple were in their early sixties and both were doctors nearing retirement. However, he did not disclose the fact that the person owning the start-up was the brother of the “financial advisor’s” best friend. This “advisor” assured that the business would easily triple their money.

Of course, the couple are at fault for being knaves, but proper enforcement institutions would put this crook in prison. This same advisor had also lost money after recommending to the couple that they invest in some of the finance companies that went bankrupt in 2008.

Chicanery in the investments industry is rife throughout the world, but the type of chicanery and the simplicity of the fraud schemes in New Zealand are difficult to find elsewhere. It would not surprise me if the aforementioned start-up paid the “manager” some ridiculous salary. Kiwis love to set up companies and lure investors with promises of great returns etc. In reality, the companies exist simply to award huge and inflated salaries to the insiders running them, whilst creating the ruse that the investors are funding a start-up. These companies will never make any money, but the investors do not realise this until it is too late.

Similarly, if you elect to start a business rather than buy one, you will find the climate excruciatingly difficult. New Zealand is already a tiny market and Kiwis do not have disposable income because the extortionate living costs consume almost all their disposable income. Additionally, Kiwis will seldom pay for quality. They simply buy whatever is cheapest irrespective of whether it offers value for money. The only exception for this rule is alcohol. Businesses funding the country’s alcoholism epidemic do well, but the cartels control the market. The notion of paying 20% more for a product that is twice as good or twice as long is anathema to these inbred bogans.

One of the few successful businesses in New Zealand is The Warehouse, a tinier and much lower quality place than Wal-Mart. The made in China junk that somewhat sophisticated North Americans and Europeans snub and is available for sale in the First World is of infinitely better quality than the Made in China junk from the Warehouse. It is as if some Kiwi importer found a niche selling the Made in China junk that no one in the developed world wants, buying it at a discount, and selling it to the Warehouse to add an outrageous mark-up and sell it to Kiwi bogans. Whoever created that business model is one astute man who knows exactly what the New Zealand market wants or needs.

Aside from this, one also has to deal with competition from the local Kiwi cartels. If you happen to do something better or more efficiently than the locals do, you will soon find yourself subject to a tax audit or regulatory hassles from the council. Your competitors will just make an anonymous complaint. New Zealand does not investigate anonymous complaints except when the person making the complaint is mates with someone at the agency. You can rest assured that this will happen.

Anyway, I had a tiny side business offering Financial/International Relocation consulting, which I did on weekends for extra money. I had someone, the demented partner of my wife’s friend, report me for “offering financial and immigration advice without a licence”. Anyway, I had structured the business to avoid having to register, but I had the inbreds bumpkins from the government agencies harass me a bit. Thankfully, I was on my way out by then and I was in the process of closing up shop and winding down the business. However, rest assured that the Kiwis enforce the law selectively. If you are a connected company whose negligence results in the death of twenty-nine people in a mine, then rest assured that the sham investigation will side with you. Interestingly, the Kiwis would never tell me the name of the complainant, but I managed to figure it out. It is perfectly acceptable for Kiwis to make defamatory complaints, but they will protect the privacy of the complainant just like the courts protect the “privacy of paedophiles”.

Another aspect of running a business is collecting GST and dealing with taxes. One has to collect sales tax and pay tax in other countries. However, one aspect of New Zealand taxes is that the IRD forces you to pay provisional tax on what you will likely earn. This means that you pay the taxman first and he will refund the difference after the fact. For a small business, the provisional tax can complicate cash flow.

Another problem is the high cost of doing business in New Zealand. Rents are exorbitant along with other inputs such as electricity and petrol. I did tours before and I could buy a good second hand bus in the United States for $10,00-$20,000. In New Zealand, I would have to pay triple if not more for a comparable bus. Similarly, renting a place for a cafe is prohibitively expensive and the number of available customers with the disposable income is small.

Many migrants are attracted to beautiful tourism towns for the lifestyle and consider buying small businesses there. You will find that trading conditions are very seasonal and it is almost impossible to make enough to hold out during the quiet season. These towns are notorious magnets for the types of business scams that I have described. My wife and I looked to resettle into one of these places, but thankfully, we never fell for any of the cons and we managed to extricate ourselves out of New Zealand for Switzerland, where we are infinitely better off and much happier.

The experience I gained from three years in New Zealand analysing and examining businesses to buy. It is simply downright impossible to make money honestly in New Zealand. The only businesses that make money tend to have very good connections to the government. The notion that New Zealand is a bastion of free enterprise and an easy place to do business is derisory.

My tale is not the lamentable tale of those who lost everything relocating to what one poster calls Retardicon 6, but please heed the warnings before New Zealand sucks your wealth.”

Previous chapters

Part 1

Part 2