Plans to turn New Zealand into an international financial services hub could be completed within 10 to 15 years, according to a taskforce report.
The International Funds Services Development Group (IFSDG), a government-appointed taskforce, has recommended clarification of existing tax policy, establishing regulatory conditions necessary for a funds domicile, and obtaining broad support to enable the country to act as a financial services centre.
Acting Economic Development Minister David Carter said the Government had considered the report's recommendations and had begun to address the issues it identified.
"The report shows that New Zealand could be a viable funds domicile -- essentially a centre for funds accounts and administration -- in around 10 to 15 years," Mr Carter said.
"This could generate around $500 million to $1.3 billion per year in export revenue and create around 2000 to 5000 high-value jobs, such as accountants, lawyers and trustees."
The Government last month announced proposed changes to tax rules that would remove barriers to non-residents investing into New Zealand.
The current rules mean non-residents investing into Portfolio Investment Entities (PIEs) are taxed at 28 percent on all the income earned from a PIE, whether foreign or New Zealand-sourced. Under the new rules, investors would be aligned with those for direct investment to ensure fairness of tax treatment.
"This is consistent with New Zealand's source-based approach to taxation, which generally taxes non-residents only on the income they earn from New Zealand," Mr Carter said.
"The growth of the financial services export industry will also be considered in all future regulatory changes."
IFSDG chairman Craig Stobo said he was pleased to see tax and regulatory changes going ahead.
"The tax changes are a critical step towards establishing a financial services centre in New Zealand," he said.
"We also note the regulatory changes that are being implemented by the Government and are encouraged by New Zealand's involvement in discussions within Apec on a possible regional multi-lateral mutual recognition agreement for managed funds."
