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SOVEREIGN MAN

A good reason to head to New Zealand

May 20, 2010
Quad Cities, IA, USA

The New Zealand government just announced something that I find rather surprising… but a step in the right direction. Concerned about debt levels, both public and private, they’ve announced changes to the tax code which encourage savings and investment, and discourage consumption.

Specifically, the government is planning measures which cut and simplify income tax rates, ranging from 10.5% to 33% (down from as high as 38%). The corporate income tax rate will be cut from 30% to 28%.

Meanwhile, the changes also include an increase to the national sales tax from 12.5% to 15%. In the long run, this should be favorable for New Zealand economy because the new scheme encourages the replenishment of a large pool of savings… this is critical to long term economic growth.

Overall, I’m bullish on New Zealand and would recommend it as a place for you to consider as an expat destination.

Over the last few months, I’ve occasionally published some letters from my friend Mark who has been living there and exploring the country for his own expatriation. Mark quickly became an expert in NZ residency, immigration, and real estate, and I think his letters served our group quite well.

Mark recently returned to the United States after almost a year on the road, and he’s written a very comprehensive e-book about New Zealand that covers all aspects of living, working, and investing there.

Below is his latest letter since he returned from down under:

Since I last wrote about New Zealand lifestyle and immigration, serious macro-economic changes have begun to unfold. Simon speaks at length about these in his daily missives, so I don’t need to elaborate. What is important to us is predicting how these changes might affect New Zealand, and therefore impact a decision to relocate there, either full or part-time.

But before making the decision to uproot and take the plunge into this new lifestyle, culture (yes, it’s a bit different than where you live now) and system of law and taxation, let’s review the reasons why New Zealand is so desirable.

As a reader of Sovereign Man, our guess is that you believe the world is currently on an unsustainable path, financially and perhaps socially. We are squarely within that camp, and therefore wanted to find a place where we could ride out the storm.

In our first post herein we listed 10 reasons New Zealand was a good choice:

1. Geo-politically and physically ‘Remote’
2. Abundant and reasonably priced lifestyle type properties
3. Plenty of water. Ocean, lakes, rivers…
4. Reasonable annual sunshine hours
5. Clean environment
6. Educated, English speaking population
7. Safe, clean and readily available organic food
8. Physical safety and the rule of law
9. Fair taxation
10. Accessible, high-quality health care

These are factors we evaluated when choosing New Zealand. We said that it didn’t tick all the boxes, as taxation is as predatory here as it is elsewhere. But, now that situation seems to be improving.

As for the other criteria, NZ has those in spades. So now let’s review why it’s a good choice if the world falls apart, even temporarily.

First, you will want to live as far away from the angry masses as possible. And, make no mistake; they ARE getting angrier by the day.

New Zealand is about as geographically remote as you can get while still remaining a part of modern civilization. If Doomsday is your prediction then stay away from the cities. Thankfully you’ll have lots and lots of empty space and small towns to choose from.

Secondly, New Zealand is basically resource independent. They do import fossil fuels, but their electricity generation relies heavily on renewables like hydropower and geothermal.

In fact almost 70% of the power is generated from renewable resources. Auckland is power hungry, and grid interruptions can occur there, but the South Island, with its small population and immense hydropower resources is adequately supplied.

Third, New Zealand has ample food production to sustain its small population. Remember, without food and water nothing else matters. Think about how you would provide food for your family if the supply lines shut down in the urban centers of the U.S. and Europe..?

Fourth, the people, Kiwis are by nature, good-natured! They aren’t the most gregarious, the funniest or even the most polite at times, but they ARE kind at heart and peace-loving.

We would much rather be facing tough times surrounded by strangers in New Zealand than in almost anywhere in the U.S. Your average Kiwi is a survivor; they either live on a farm or are likely only one generation removed from that lifestyle.

Finally, we believe New Zealand is relatively safe from geo-political events. Yes, it is an ally of the Empire; however it’s more like Switzerland in this respect. Their anti-nuclear stance, in our opinion, just increases its rating as a ‘safe place’.

Moreover, New Zealand is likely not a terrorist target, or a military target. And, we believe if the global situation rapidly deteriorated, we’d fare better there, than elsewhere in the world.

So, in summary, New Zealand may in fact be an ideal place to ride out a serious economic, social, or geo-political disturbance. You can learn more about how to make it your primary or secondary residence by getting a copy of our New Zealand Retirement, Immigration and Lifestyle Guidebook.

In the e-book, I discuss the reasons why you should consider residency, and even citizenship in this beautiful country. I review the legal steps, introduce you to competent professionals, provide precious metals purchase and storage options, and even show you current examples of real estate opportunities you can capitalize on right now.

Simon again. I’ve read Mark’s book and find it to be the best source of information about New Zealand out there in the marketplace right now, so if you’re possibly interested in migrating to NZ, I’d encourage you to give it a read.

Our goal is simple: To help you achieve personal liberty and financial prosperity no matter what happens.

If you liked this post, please click the box below. You can Download our Free 17 page Report The 6 Pillars of Self Reliance.

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About the author: Simon Black is an international investor, entrepreneur, permanent traveler, free man, and founder of Sovereign Man. His free daily e-letter and crash course is about using the experiences from his life and travels to help you achieve more freedom.

Comments on this entry are closed.

  • Jai

    New Zealand has always sounded like a great place to me. However, the tax changes mentioned here, while absolutely a step in right direction in some respects, are still inadequate to overcome NZ’s most basic flaw: high cost of living. Increasing sales taxes to 15% is a step in the wrong direction! People still have some needs to buy “stuff,” and putting those things further out of the reach of many people is merely shifting too-high tax burdens. The taxes on businesses, etc, and sales taxes both need to be reduced. Get business taxes, income taxes, sales taxes down to the 10% range at most, and things will really open up. Kiwis are delightfully self-reliant, self-sufficient. Stop taxing them to death!

    The other obstacle is restrictions on immigration for “older” people. Doesn’t seem to matter if the person is an active, self-supporting businessperson or self-supporting retiree, or someone who could & would invest in NZ.

    Please correct me if I’m wrong on the high-tax, high-cost, no-older-immigrants fronts, and I’ll move NZ back to the top of my list!

    • Robynn1351

      NZ is a great launching place to migrate to. Once you get admitted there you only have to stay for a few years (I think 3 or 4) and then you can legally just walk into Australia and live there for as long as you like!!!!!!

      If NZ is so good why are so many of them living here in OZ?

      Think carefully before you decide to go to NZ. Pretty place I agree but not really the nirvana you may be looking for

  • Greg

    How does NZ tax capital gains? In the US, short-term gains (something held for less than a year) are taxed federally as income, whereas long-term gains are taxed at 15% (increasing to 20% next year). In Canada, you divide your gains in half, and that amount is taxed as income (typically, a marginal rate around 21%). Last time I checked, Australia was the same as Canada, but NZ taxed 100% of gains as income, the same as short-term gains in the US. That would be a disadvantage if considering NZ as an ex-pat destination.

    • Chris

      Regarding capital gains in NZ:

      Short-term trading profits are taxed as ordinary income because they are not considered “capital gains”. Long-term capital gains are not taxed.
      So if you sell shares after a month, it’s a trading profit and gets taxed. If you sell shares after a year, it’s a capital gain…which does NOT get taxed at all.

      However, 2 years back NZ introduced a kind of wealth tax…the increase in the value of your portfolio gets taxed even if you don’t sell But this is capped at 5%, that is, gains of up to 5% are included in your taxable income. In practice this means a tax of up to 1.6% of your portfolio might be applied each year ( if your portfolio rises by 5%). Similar to the Dutch tax on deemed earned income.

      This has been widely condemned…there’s a good chance they will scrap this in the next few years.

      Personally I wouldn’t go to NZ at the moment but I would keep an eye on it and see if they scrap the deemed income tax.

  • sdca

    I also think NZ may just be a good choice, b/c, well, it’s a nice place to live.
    Or are we only making decisions out of fear-based reactions these days?

    There is something to be said for focusing on what lifestyle one wants, that is not in opposition to something else, or another lifestyle, but, rather, is simply in and of itself, right for someone.

    We can only see trends; we cannot really predict. Unless, of course, we are Warren Buffet and have insider knowledge of those pulling the strings, who do in fact predict b/c they are creating the scenarios that we will experience.

    Less chicken little, more common sense.
    Chicken Little is part of why the masses will handle this situation so poorly. As adults, we need to deal and make decisions, not panic and react.

    NZ has alot going for it, not as a fall-out option, but as a healthy nation w/a high quality of life.

  • Bruce

    A wonderful place to consider for relocation however one of the many strengths listed is for me its greatest weakness. Geographic isolation. I may have many strong opinions on why I wish to “diversify” my living arrangements across global regions but my family does not. So to be on the underside of the Earth subject to visiting with my children only when we can afford it in both money and time is a serious impediment to me. Life without reasonable access to family isn’t really living in my world.

  • Bob Hays

    I haven’t read Mark’s book. But since it’s been my primary home since 1999 when my wife and I immigrated from the US, I think I do have a basis for commenting on his summary. I cannot disagree with the points made, but should point out that NZ has a very weak military, and could be easily taken by any surprise invader. Now who might want to take over a rich land with lots of water, food and natural resources? To assume there is no one, you have to forget history, I think.

    More important to me is the egalitarian philosophy of the people, which is firmly ingrained in the vast majority. NZ is a socialistic state, and the people like it that way. What follows from that include the following: Accomplishments, other than in sport, are the target of a generally held envy bias. (We call it the tall poppy syndrome—pride commeth before you get chopped down). Political correctness is not only overwhelmingly dominant, it’s supported by a host of laws. Don’t even think about giving your kid a slap, let alone saying anything anyone might take offense to (so long as they’re not adult white males or Christians). Right now, the puritans are gaining ascendancy again. While tobacco and alcohol are not banned, the taxes and regulation are climbing quickly. Aimed, of course, at the producers, not the users of these “sinful” substances (except curiously for driver). Yes, there’s been a shift politically from the centre left to what is called the centre right. But most middle of the road Democrats would consider the current crop as true brothers, and far to the left of the right wing of the Republican party. Libertarians are a non-factor in politics these days. There’s a sizable national debt (more private than public), property speculation and unfunded (and unfundable) promises for future social welfare spending, with no hint of how to deal with it. The economy is now heavily dependent on sectors very vulnerable to downturns in the rich economies or increases in fuel prices. Finally, there is a rapidly growing social underclass, complicated by historical grievances turned now into a significant industry for extracting reparations from the general taxpayers.

    So go, take a look. NZ really is a beautiful place with lots of very nice people and many positives. But don’t blind yourself by seeing what you want to be true. FWIW, while I have no intention of bailing out of NZ, and became a citizen just a year ago, I’ve got a second flag now and am establishing a third.

    Bob “in NZ”, currently in New Mexico, and soon off to Panama again.

  • John Stub

    Can you, or your friend Mark, explain a limited publication of 1,000 copies of an ebook? That just pushed my “caution” button.

    • Pathoffreedom

       As a New Zealander, who has been privvy to a number of folk immigrating to NZ, I see no reason why an ebook is necessary to figure out how to immigrate to NZ. The NZ Immigration web site is loaded with clear and relatively easy to understand information. It is also possible to phone NZIS and talk in person. I recommend calling NZIS in small centers, like Christchurch as opposed to Auckland. Most immigrants are trying to move to Auckland so the NZIS offices there get significantly more over loaded, which can also result in the officers being relatively less personable. Of course that’s a generalisation and not the rule. But if you find you’re not getting the informationa and attention you require from the Auckland NZIS offices, try somewhere like Christchurch.

  • michael

    I would like to purchase the book with a consideration prior to purchase. How much will the second passport cost?
    I hope asking this question in advance of the purchase is ok. It will allow me to determine whether it will even be relevant for my situation.

    thanks,
    Michael

    • CMS

      If you are talking about the fees, here’s the link to the NZ Department of Internal Affairs:

      http://www.dia.govt.nz/diawebsite.nsf/wpg_URL/Services-Passports-Application-Forms-and-Fees?OpenDocument

      However, unless you are a special case, ie an investor with NZD$1-2 million to spare, you will first have to send NZIS an expression of interest, then apply for permanent residence, then establish permanent residence in NZ (be physically present in NZ for 5 years), then apply for citizenship and take the oath of allegiance. Only then can you apply for a NZ passport. The forms, fees and supporting documentation cost me about NZD2,000. Remember that I started the process in 2003 when everything was easier and less expensive.

  • CMS

    I migrated to New Zealand (my “back-up” country) from the Philippines in 2003, without any expert advice. I simply went to the NZ Immigration website http://www.immigration.govt.nz — read that and the related links thoroughly; it’s all pretty straightforward information and it’s FREE. I put my application together in 3 months, was granted permanent residency in 7 months, became eligible for citizenship in 3 years and, after waiting 11 months because of the processing backlog, obtained NZ citizenship in 2007. Alas, nothing gets easier over time. In 2005, because of the greatly increased number of migrant applications, the NZ government tightened immigration requirements. You can still read all about it on the NZIS website and then decide. For what’s happening in New Zealand, read http://www.nzherald.co.nz

    In 2003 when I first arrived in NZ, the exchange rate was USD 0.56 to NZD1.00; when I left early this year, the exchange rate was USD0.71 to NZD1.00.

    I have citizenship in the Philippines and in NZ, permanent residence in the US, and together with my husband, am looking at acquiring residency in one of the Southern Cone countries (that would be 4 countries, in 4 continents, in 2 hemispheres so far).

    CMS

  • Tony

    Mark, be cautious about using the phrase “Third World.” We get it, you love New Zealand and it is a great place. But may more people call many other places home. The correct definition of “Third World”

    http://en.wikipedia.org/wiki/Third_world

  • Jmccraw1

    Why in the world would NZ want to bog down it’s country with any and everyone the way America has? We embraced the same kind of ‘come one,come all’ policies and look what we have become.We are an endless pit of people and Government that is destroying this country,and our American way of life.Washington continues to send citizens on a guilt trip when illegals are not welcomed here.We have mistakenly placed a “leader” in the Whitehouse that crushes the American people down,while lifting up his own agendas!This once great country is fastly being consumed with illegals and the burdens they bring with them.Entitlement programs and hospital costs are strained to the bursting point! We have allowed our elected officials to turn this country into a melting pot of poverty,disease,crime,drugs and murder! Why oh why,would NZ want this for their country?

    • Reality Checker

      As a Native American, I suggest Jmccraw1 go back to wherever he came from. This country was GREAT before he and his “real Americans” arrived here, stole land, polluted, and killed off people and wildlife. He is–and always has been –the poverty, disease, crime, drugs and murder he complains about. Further, his “America” would not be diverse had his ancestors not been too lazy to do their own work. But no-o-o, his people enslaved people, starting with the indigenous population, then tens of millions of Africans, and more lately new immigrants. He should take a look at the poster children for “real Americans” like building contractors, factory owners and mega-farmers who hire illegals instead of him so they can increase their personal profits. And yeah, how about the other “real Americans” the likes of Meg Whitman who pay use illegal immigrants. Get real dude. You “Americans” are the problem. Stop blaming everything on everyone else.

  • http://www.itsthepits.org/ San Diego County Citizen

    Too bad about the gun banning government.. NZ might be a good choice if it wasn’t for that!

    • Freedom33

       “Gun banning government”? – Most New Zealander’s have never seen a gun in person, and certainly never in public. The police do not carry guns. Security guards do not carry guns. Until America pulled off it’s 9/11 ploy, one could even pass through New Zealand’s international airports without seeing a gun.

      Guns are not “banned” in NZ, as far as I am aware. Plenty of farmers and hunters have a gun. You simply need a license to own one. I’d much rather live in a country where the population doesn’t have easy (completely open) access to guns, and live in a society without guns (for the most part), including the police, etc., than be in one that is heavily armed. Most Kiwis get a real surprise when travelling internationally and seeing guns carried around in public.

      You tell me… If a Kiwi cop does his job without a gun on his hip… does that means it’s more or less safe in NZ?

  • Jagver_brand44

    NZ is too white, im an indian-american and did visit the south island for vacation
    was visited in my hotel room by local police, who “just wanted to make sure i wasnt a bad guy”

    • pr_kiwi

      Maybe if you had gone to Auckland, you’d see its as ethnically diverse as many other large urban areas. If Police showed up at your door, chances are you did something to bring them there.

      “Too white”? Whatever, mate.

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