A Foreigner's Guide to Buying Commercial Property in New Zealand: GST, Entities, and More

Post last updated:
September 18, 2023

Are you a foreigner interested in investing in New Zealand's thriving commercial property market? With its stable and robust economy, investor-friendly environment, and stunning landscapes, New Zealand offers plenty of opportunities for business ventures and real estate investments. As a foreigner, acquiring commercial property can be an exciting yet challenging endeavour, especially with the various laws and tax regulations in place. This comprehensive guide will break down everything you need to know to make a well-informed decision and successfully navigate the process of buying commercial property in New Zealand.

New Zealand boasts diverse commercial properties that foreigners can invest in, such as offices, retail spaces, industrial warehouses, and hospitality sector properties like hotels and restaurants. To reap the benefits of your investment, it is essential to identify what properties match your objectives and financial goals. Location, growth potential, and property management requirements will significantly guide your decisions.

When purchasing commercial property in New Zealand as a foreigner, choosing the right entity for your investment is crucial. Generally, foreign investors' preferred purchasing entities include limited liability companies, trusts, or other corporate structures. Each option has merits and drawbacks concerning asset protection, taxation, and ongoing costs. You should consult a professional to review your individual needs and circumstances before opting for a specific entity for your investment.

One of the most significant considerations while investing in New Zealand commercial property is the Goods and Services Tax (GST) registration. By registering your purchasing entity for GST, you can enjoy a zero-rated transaction on your commercial property purchase. This means you won't have to pay GST on the property's purchase price, benefiting your financial planning. Navigating the complexities of GST registration might seem daunting; however, engaging the services of a tax specialist, as well as understanding the registration requirements, deadlines, and appropriate documentation, will be invaluable to ensure a seamless and stress-free experience.

Understanding the Commercial Property Market in New Zealand

Before diving into commercial real estate, it's essential to have a solid grasp of the various factors influencing the New Zealand commercial property market. Local economic conditions, property rights, and legal structures create an attractive and stable environment for investors. Key industries to watch include tourism, agriculture, and technology, as these sectors continually support the demand for commercial spaces.

When selecting a suitable investment, consider the property's durability, functionality, and potential for capital growth. It's also advisable to familiarise yourself with local planning laws that could impact the property's use or future development prospects.

Choosing the Right Purchasing Entity: Pros and Cons

Creating a holding structure for your New Zealand commercial property is crucial, and determining a suitable purchasing entity is vital. Here's an overview of the possibilities you may encounter:

1. Limited Liability Companies (LLCs): This type of entity structure is favoured by foreign investors for its simplicity and legal benefits. With an LLC, your financial risk is limited to the assets held within the company, protecting you from incurring personal liability. Additionally, the business structure clearly separates your personal and business-related affairs. However, forming an LLC entails fees, documentation, and ongoing corporate responsibilities, such as annual financial reporting.

2. Trusts: Establishing a trust offers high levels of asset protection and flexible estate planning options due to its legal separation from your personal holdings. Trusts can be a viable alternative for those wishing to include family members or successors in the ownership structure of their investments. Creating and maintaining a trust involves additional paperwork, compliance with trust laws, and ongoing trustee responsibilities.

3. Partnerships and Joint Ventures: These entities may be suitable when pooling resources or expertise with others for a specific commercial property investment. While partnerships and joint ventures can provide benefits such as shared risk, resources, and specialist knowledge, they also require clear agreements and a strong understanding of ongoing legal obligations among the parties involved.

Navigating GST Registration: An Essential Step

GST registration is crucial for foreign investors planning to buy commercial property in New Zealand. Registering your purchasing entity for GST allows you to enjoy a zero-rated transaction on your property's purchase price, as mentioned in the introduction. To successfully register for GST, ensure you understand the registration requirements, deadlines, and appropriate documentation. Additionally, engage the services of a tax specialist to guide you through the complexities of the process.

Be aware that GST registration also comes with ongoing compliance responsibilities. You must complete regular GST returns, account for input and output taxes, and maintain accurate financial records. Meeting these standards is essential to avoid fines and penalties, which could damage both your reputation and financial standings.

Top Tips for Foreign Investors Buying Commercial Property

To ensure a smooth and efficient process, consider the following tips when purchasing a commercial property in New Zealand:

1. Research, Research, Research: Educate yourself on market trends and industry growth drivers and understand the dynamics of the local economy. This will help you narrow down the most promising commercial property options that align with your financial objectives.

2. Assemble a Team of Professionals: Having a reliable team of experts is indispensable as a foreign investor. Engage with solicitors, accountants, tax specialists, and property management professionals to fully comply with local regulations while protecting your overall interests.

3. Conduct Due Diligence: Thoroughly investigate the property's condition, rental history, and prevailing market rates to ensure you're making a fully informed decision. Additionally, be aware of any zoning restrictions or licencing requirements that may affect the property's leasing or ownership.

4. Consider Financing Options: Explore various financing options catering to your needs. As a foreigner, you may face limited access to some loan packages available to local investors, but with careful research and professional advice, you can secure a favourable financing arrangement.


Given the country's stable economy and investor-friendly environment, purchasing commercial property in New Zealand as a foreign investor can be a rewarding and profitable experience. Although the process may seem complex, following the guidelines outlined in this article and professional support will help you navigate your investment journey with success and confidence.

Remember to carefully consider the types of properties best suited for your objectives, choose the right purchasing entity, and register for GST to ensure maximum benefit. By conducting thorough due diligence, researching local market trends, and engaging with experienced professionals, you'll be well placed to make informed decisions and prosper from your New Zealand commercial property investment. If you need assistance with commercial property purchase agreements, get in touch with NZ Legal today.


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