New Zealand – Le Musi

Moci's editorial team has compiled a set of observations, findings and evaluation criteria covering, on the one hand, the macroeconomic risks associated with a country and, on the other hand, the overall solvency of companies in each country.

Solvency indicators are linked to the environments and procedures associated with recovery measures that can be implemented in each country.

Finally, an expert from Moci has written a brief note related to this risk environment for most countries around the world.

Moci Credit Manager Appreciation

Country risk: very good
Customer risk: good

Country risk ratings

Organization for Economic Co-operation and Development: North Carolina (October 2021)
Euler Hermes: AA1, low risk in the short term (October 2021)
the face: Country A2; Business Environment A1 (October 2021)
Accreditation: Short term: 1/7; Commercial: E; Transportation Risk: 1/7 (October 2021)
Atradius: 2/10 Positive (October 2021).

Work environment
Corruption Perception Index (2): 1/180

Sources: (2) Transparency International.

Get buyer awareness information

Please note: Information on New Zealand companies is rarely available. Get closer to French and European business circles, institutions and other suppliers. However, there are two local providers:

• ICMS CreditSystems Limited
(TCM International Group)
www.icms.co.nz
This is amazing. : +64 9 921 4600
[email protected]

As in Australia, D&B became “Illion”. The site regularly publishes studies on the payment behavior of Australian and New Zealand companies: https://insights.illion.co.nz/late-Payments-analogy

Payment method

local currency
New Zealand Dollar (NZD).

Exchange rate on November 11, 2021:
1 euro = 1.66933 New Zealand dollars
1 New Zealand dollar = 0.59821 euros
1 US dollar = 1.44279 New Zealand dollars
1 New Zealand dollar = 0.69258 US dollars

Best currency exchange bills
US dollar and euro.

Recommended
Mainly, a bank transfer, preferably SWIFT, is secured, depending on the amount and the solvency of the buyer, either by a standby letter of credit (SBLC) or by credit insurance.
It is possible to confirm the documentary credit depending on the amount. Be careful, sometimes local commission rates are very high.

Not recommended
All others.

Payment Terms

Usual payment terms
The average repayment period granted is 25 days. So, do not issue an invoice after 30 days.

Risk of late payment
New Zealand is definitely the number one country in terms of good payment behaviour. According to the “Elion” study published at the end of December 2019, the average delay was 5.5 days, which local observers considered a (slight) deterioration compared to previous years! 82% of invoices were paid within contractual deadlines.

Nine months later, in the midst of the pandemic, the same service provider publishes the results of 3^H Quarter 2020: Payment delays up to 5.9 days! The percentage of payments made within the agreed deadlines remained unchanged: 82%.
The most recent study, published by the same service provider, in July 2021, covers 2^H Quarter 2021. It shows that 81% of businesses pay their invoices on time and the average delay period is still 6 days. During the Covid period, between April and October 2020, delays deteriorated from 5.2 days to 6.1 days.

As was the case in previous years, it is the SMEs and medium-sized companies that respect the negotiated deadlines the most, and the large groups that delay the longest. For its part, Euler Hermes, in its study on the global WCR published at the end of July 2021, places New Zealand in first place among the 36 countries analyzed with a real average repayment period that it dreams of: 37 days. In comparison, France ranked 27th^H place.

Deposits on demand
It is possible to negotiate, but it is sometimes difficult because it can be seen as a sign of lack of trust by the New Zealand customer.

Local bank guarantees

There is no problem in obtaining standby letters of credit or payment guarantees. Delivery time is very fast in principle. Costs depend on the bank and the financial strength of the requesting party.

The competent court in the event of a dispute

• Local court. Decisions are very quick.

In addition, New Zealand law is more favorable to business law than French law.

• Friendly extrajudicial transactions are also preferred.

World Bank Classification, Insolvency Resolution, 2020: 36/190.

Credit manager advice

The ideal country, No. 1 in the World Bank's Doing Business report ranking, rated well by all institutions and credit insurance companies, with one of the lowest late payment rates, so what's wrong? Regarding corporate insolvency, after two years of sharp decline in 2018 and 2019, as in many other countries, measures were taken to “hold back” the explosion of insolvencies in the wake of the pandemic. It also ended 2020 with a decline of 15%. In its study published on October 6, Euler Hermes expects an increase of 3% at the end of 2021, then another 14% for 2022.

Although New Zealand companies are known for their exemplary payment behavior, it is preferable, as in Australia, to insure operations with large amounts and transactions carried out with new business partners. It is recommended to be careful in drafting the contract and vigilant in observing deadlines.