If you are not a New Zealand resident, you can invest in New Zealand fixed interest securities, including:
- Government bonds
- Corporate bonds
- Term deposits (a.k.a. certificates of deposit, or CDs)
This page will help you understand what you need to know.
- There is no deposit insurance in New Zealand. For a brief period during the Global Financial Crisis we did have a retail deposit insurance program but that has now ended.
- International investors may be subject to New Zealand Non-Resident Withholding taxes. If your country has a double-tax treaty with New Zealand, withholding taxes deducted in New Zealand may be claimed back in your country when you file your tax return. You will need to check with your tax adviser. The official New Zealand tax rules can be checked out here and
- You may be able to avoid paying New Zealand Non-Resident Witholding taxes if the financial institution you invest with is an Approved Issuer registered with the NZ tax authorities (NZ IRD), and you agree with them that the AIL applies. The official AIL rules can be checked out here.
- Investments in New Zealand fixed interest securities are all in New Zealand dollars. You, as investor, take an exchange rate risk when you invest. This risk can go either way - either increasing your return, or decreasing your return.
- The New Zealand dollar is a fully free, floating currency. You can buy or sell it without needing any government consents of any kind. The market sets the exchange rates based on supply and demand. The NZ$ is a widely traded currency -- the 15th most traded in the world. The New Zealand Government or the central bank (RBNZ) do not set exchange rates. Both do have the ability to enter the market to buy or sell if necessary, but they have used this influence sparingly in the last 15 years, probably less than most governments with fully free, floating currencies.
- You can invest in New Zealand deposits, in currencies other than NZ$, but the interest rate that will apply is that of that currency. For example, US interest rates apply to investments in US$, even when made in New Zealand. Check with the institutions that offer this service.
- Some New Zealand insititutions offer foreign currency deposits and you can find those offers here ». But remember, the interest rates offered on those accounts will be based on interest rates for those currencies and not New Zealand dollars.
- Anti Money Laundering rules and Know-Your-Customer obligations have tightened and limited the options for almost all financial institutions. While all the above is correct, this law applies in New Zealand and affects all international transactions.
You are welcome to ask us a question by emailing us at firstname.lastname@example.org, but please note that we are not qualified to give advice of any sort.