Exporting your services can be a great way to increase revenue and gain international exposure for your business. You can export services by physically travelling to the overseas market or remotely while sitting at your desk in New Zealand. The export of services is particularly common in sectors such as:
- transportation
- insurance
- construction
- professional advisory
and often complements the export of products (particularly those requiring ongoing support).
While issues an exporter of services faces are often the same as those met by an exporter of products, exporting services also raises its own issues – including that there is no physical product for the customer to see. This raises challenges around ownership of intellectual property (IP), structuring the business and employment and rates of payment.
Consider your business and research your target market to identify these risks. Careful planning will help your business prepare to take on the challenges involved in exporting services.
Business structure
You can sell services internationally in a variety of ways. First you need to decide if your business will provide the services directly in your target market, or whether you will form a subsidiary company overseas. An overseas subsidiary will be subject to overseas company laws, for example relating to the filing of annual returns and financial statements. This will also affect the tax you need to pay in New Zealand and in your target market.
employment
Next you need to hire people to provide the services. If you want control over work hours, what jobs are done and where, you can enter employment contracts with workers to make them employees of your business. If you are operating a New Zealand registered company you will need to comply with New Zealand employment law obligations. These include paying holiday leave and ACC levies for the employee, and acting in good faith towards the employee. You will also be responsible for deducting income tax from your employee’s earnings. You should always seek specific tax advice from your trusted advisor.
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Use of the information contained in this guide is at your own risk and we are not responsible for any adverse consequences arising out of such use. This is a complex area and we recommend that you seek legal advice before taking any related action.
