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New Zealand Preparing to Lure Funds From Caymans, Dublin
By Tracy Withers
Feb. 18 (Bloomberg) -- New Zealand is preparing a bid to become a home for international investment funds, rivaling Luxembourg, Dublin and the Cayman Islands.
Officials are studying ways of using New Zealand’s time- zone advantage and its tax and regulatory environment to make the nation attractive to funds, Commerce Minister Simon Power said in an e-mailed statement. Successful implementation would create jobs and exports, he said.
The Asia-Pacific region doesn’t have a hub for investment funds, opening the way for New Zealand to make its pitch as their legal home and also the site for fund accounting and administration. There hasn’t been a need for a regional center because the industry has lacked critical mass in the region until recently, Power said.
“Capturing a small part of this market could generate significant high-value exports and jobs,” he said. “The domicile activities would also strengthen New Zealand’s funds- management industry and capital markets and broaden the skill base of associated professional services.”
The proposal was put forward in December by the Capital Market Development Taskforce, which was reviewing ways to make the nation’s markets more efficient and more attractive to investors.
Government officials are working with some taskforce members to prepare an implementation plan by May 31, Power said.
Preliminary analysis is that some changes to tax and regulation may be needed, he said. Tax changes would aim to treat managed funds the same as other sectors of the economy, only taxing income earned in New Zealand or by New Zealand residents, he said.
Separately, New Zealand will consider creation of a new regulator to improve the performance and conduct within its capital markets, Power said.
The government may merge parts of the Securities Commission, the Companies Office and NZX Ltd.’s disciplinary unit in a new entity, he said. The taskforce recommended simplification of the regulatory framework to bolster investment.