Tales from Retardicon 6 The Business of Investor Visas – part 3

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

7 thoughts on “Tales from Retardicon 6 The Business of Investor Visas – part 3

    • “More than 90 per cent of rental properties in a nationwide survey have failed a ”warrant of fitness” (WOF) check”. So more than 90% is chav-level housing. Ninety percent. Why am I not surprised. We lived in ONE (read it – one) decent, well-made-by-First-World-standards house in the almost-10-years we lived there. Never thought I’d consider proofness a luxury until we realised we were taking it for total granted at home!

  1. You can’t be naive or trusting in that place. They will devour you alive. They are a cash-poor society. Hungry vampires with a strongly developed instinct for identifying suckers (and setting up money-delivering relationships they call “earners” – also, the people themselves are sometimes also called “earners”). I know the cunning look they get. They think foreigners don’t see the dollar signs lighting up in their eyes. Where I am from, we are trained culturally not to let “sudden interest caused by something that may be of benefit to you” play across our faces like that. I remember walking into one lawyer’s office and noticing from across the secretary’s desk that they had written my annual income right across the front of the folder they had started for me. It is not even ballsy for them to be this venal. It is nothing short of zombie-scary when you have thrown all your funds into migrating there and are surrounded by them. Walking Dead. Please read this site and do not believe the hype about New Zealand. It’s a bloodsucking pit of desperate people, a very expensive place to live. Don’t be fooled by all the shots of natural beauty. There is nothing else there but that (and even that is photoshopped and cherrypicked).

  2. Presently in NZ, dejected and upset, had come with lots of dreams and ambition to do business, got ripped off a huge amount in a real con style by a lawyer, Only if I had recorded his conversations, he promised one thing and once I landed here he changed his promises by adding more lies and then bluntly telling me that the amount given to him is his consultation fees. How is it his consultation fees when he wanted me to invest in his own failing businesses, which also is a dud. Ok, if it is his consultation fees, the best lawyers here charges 450 NZ $, and this lawyer called me once to his sister concern business as he said if he calls to the main office, i shall be charged more as he is only a associate there. Then in that office he pressures me to invest as a franchise into his failing / failed business. Then he was going to Hamilton to leave his daughter to college, he called by saying he will show me Hamilton which is a good place to do business, in spite of me telling him that I do not want to move out of Auckland as my children would be studying there. He was trying to convince me to have his franchise at a ridiculous price in Hamilton, I politely refused, then on that same day he shows me a house opposite the college and told me to invest in that house saying I shall get a pr immediately, rider condition was his daughter shall be staying there and I can rent out the rest to other students. I refused as I knew by then that NZ government does not give PR for buying a house. On that same day he shows me a creaking old property on the way , again priced exorbitantly saying that he shall run his business in some of the rooms by way of franchise to some other party and give me rent. I again told him that I want to do business in Auckland and I already have a plan ready. On that he got angry. Later I asked him about my money paid as advance as he had promised to give me legal advice including paper work which did not happen. When I told him about that, he directed me to another lawyer, who took three meetings and a good amount to decide that my plan won’t work as I do not have evidence of business done back home. All facts were told to him in the first meeting itself. So much for professionalism. In contrast I went to a third reputed agency which gave me two meetings of an hour each and refused to charge me as I have to decide. So there are good guys also out there. But these first lawyer conned me like a professional. Friends told me to approach the Bar council. But what could one do without any solid evidence. I have proof of payment though, but in which this clever fella has mentioned something else. Which again is a lie. The whole experience has left a very bad taste about NZ.

    • You need to carefully read the procedures and standards for making a complaint. The oversight body for lawyers is not the “Bar,” but the New Zealand Law Society (http://www.lawsociety.org.nz). The Law Society operates the Lawyer’s Complaint Service; its website is:
      http://www.lawsociety.org.nz/for-the-community/lawyers-complaints-service

      Invest the time and effort to thoroughly document your complaint, and you could, possibly, recover some of your fees paid. Most lawyers/professionals in New Zealand do not want to attract the stench of disapproval from their peers. If you have some good arguments which tie directly to the Lawyers and Converyances Act 2006 (download it from: http://www.legislation.govt.nz/act/public/2006/0001/latest/096be8ed80dd226d.pdf ) – regardless if you tape-recorded the conversation or not (which would probably work against you in this situation anyway), you may have a fighting chance. If you can clearly list the chain of events with times, dates, and what was said/promised – at least as you understood it – that should be enough to get the ball rolling.

      Another mechanism for complaint is the Consumers Guarantee Act, which you can cite in your complaint. You can download and read the Act from the same legislation.govt.nz website, as well as reading the information here:
      http://www.consumeraffairs.govt.nz/for-consumers/law/consumer-guarantees-act/guarantees-for-services

      According to the site:
      “Examples of services covered by CGA guarantees include work done for you by:

      professional people such as doctors, lawyers and dentists”

      The Citizen’s Advice Bureau can possibly give you advice about complaints about lawyers, although I have found them to be well-meaning but not particularly useful. Also, ask them to refer you to a Community Law Centre and possibly a private firm for free, confidential information by telephone, although you should be very careful not to give the name of, or any clues regarding, the lawyer you are complaining about.

      So, don’t allow yourself to be bullied. Get your complaint organised, stand up for yourself and fight back.

      • I applaud you for encouraging the previous poster to stand up for themselves. However, the reality is that the Law Society and government agencies that are supposed to police businesses do so very selectively. If you complain to the Law Society, the person handling the complaint will likely be a mate of the lawyer. They will conduct a charade of an investigation and hearing and rule against you. The Kiwis will usually be very friendly etc and just say that they want to help, but that there is insufficient evidence. The best thing to do in relation to New Zealand is to cut one’s losses or avoid ending up there in the first place.

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