Stephen Tsang, Partner in New Zealand firm Withers Tsang, has ridden several waves of immigration and investment from China and Hong Kong to create a unique mid-tier firm. He talks to A Plus in his Auckland office about the accounting profession’s adjustment to a fast-changing multicultural environment
Photography by Mala Patel
New Zealand is best known for its breathtaking scenery – from the verdant glades found in The Lord of the Rings films to snow-capped mountains and the lush landscapes of its many islands. So the office of Withers Tsang – a squat office block in the trendy Auckland suburb of Grey Lynn and Ponsonby – is something of a surprise.
Auckland is an example of the multicultural revolution that has changed New Zealand society over the past 30 years. Chinese, Indian and Afrikaner communities rub shoulders with the existing Maori and Pakeha (white European) residents as well as immigrants from the numerous islands of the Pacific Ocean.
Inside the Withers Tsang office, there is a mosaic of employees reflective of the world outside. “We have the benefit of these people who have overseas connections and international cultural connections and then we can now look after clients of the same ethnic backgrounds,” says Partner Stephen Tsang, a Hong Kong Institute of CPAs member.
Auckland, the country’s commercial capital, has a metropolitan population of about 1.6 million – barely more than Hong Kong Island. But statistics suggest more than 180 ethnicities live in the city. “We have local Kiwis, Russian and Indian accountants as well as those from China and Hong Kong,” he adds. “We need to embrace multiculturalism because we are in one of the most diverse cities in the world.”
With political stability, rule of law based on the British legal system, mature institutions and an advanced education system, New Zealand has long attracted migrants in search of a better life. The first Chinese settlers arrived in the 1850s and have moved here ever since.
When Tsang moved to Auckland after high school, he was part of a first modern wave of Hong Kong emigrants, many of whom were fearful of the British colony’s return to Chinese sovereignty in 1997.
“Now clients are far more demanding, with an expectation that accountants need to be communicators.”
A bit of everything
In a sense, that crossed mail determined Tsang’s future. With the Big Four deadlines expired, he obtained a position with the Auckland office of Horwath – what is now part of the Crowe Horwath brand. “I joined a business advisory service,” he explains.
Tsang’s employers quickly saw an opening in the market, thanks to the migrant influx into New Zealand in the 1980s and early 1990s. “The first wave was from Hong Kong and I was one of only five Cantonese-speaking accountants in the whole of Auckland in that era,” he says.
“Then I got my first client from Hong Kong, so basically I shepherded the client through all the meetings, translated everything from all the bank negotiations and meetings with property agents and translated all the legal documents.”
Tsang was prepared for the legal side of the business, thanks to his choice of tertiary education. The University of Otago is based in Dunedin, more than 1,400 kilometres south of Auckland. “It was the first university in New Zealand and the southernmost university in the world,” he says. “It was also the best university.”
The accounting curriculum at the time had a significant legal component. “For example I had to do trust law, estate law, insurance law, business law, commercial law and contracts,” Tsang remembers. “It’s not really a law degree per se, but it’s a bit of everything.”
Tsang discovered that business advisory services were also a bit of everything. “The core of what we call business advisory services is preparing financial statements and year-end compliance reports, tax planning, providing business acquisitions advice and due diligence” he says.
“I’m very proud to say I brought the first client to the firm six months after I graduated,” he adds. “Predominantly at that time I was bringing in Hong Kong clients – it shocked everybody that in fact I probably brought in more clients than the partners.”
Tsang says he was able to understand early in his career about taking a holistic view of clients. “We have to understand the client and the clients’ needs,” he says. Tsang describes his nine years at Horwath as “very hands on and at the coal face of business. In hindsight I’m actually grateful I didn’t get the Big Four offer.
Stephen Tsang is Co-founder of Withers Tsang, founded in 1998
When Tsang arrived in New Zealand as a teenage student in 1984, New Zealand’s per capita income had sunk from third highest in the world in 1959, behind only the United States and Canada, to 27th position alongside Portugal and Turkey. The state owned most of the economy, while foreign exchange controls were strict, foreign share purchases prohibited, and wage and price controls applied to all goods and services.
Then in the mid-1980s, New Zealand embarked on a programme of mass privatization and ending huge farm subsidies. Budgets changed from massive deficits to surpluses as government spending plummeted. By 1998 – when Tsang and fellow Horwath employee Mark Withers decided to strike out on their own – the national economy had been transformed.
The two young accountants decided that they could transform their own sector. “We literally started from ground zero but Mark and I have worked together since day one at Horwath,” he says. “The clients had all become so used to us that once they realized we had started our own firm, they all came.”
“Looking back over the past 20 years, I think the industry’s changed,” he says. “The old days when you can still make a buck by just adding a row of numbers is sort of almost completely gone. Now clients are far more demanding, with an expectation that accountants need to be communicators.”
As Withers Tsang has ridden the migration waves – from Hong Kong, Taiwan, South Korea, Mainland China, South Africa and Zimbabwe, the United Kingdom, and now India – it has adapted to help new settlers invest. “One of the things we do best is what we call due diligence – basically anything to do with your life so from pre-migration tax planning to buying a business.”
One of the results of New Zealand’s economic transformation is that instead of being dominated by large state-owned enterprises, the economy is dependent on small- and medium-sized enterprises. “Here, about 90 percent of companies have fewer than 20 employees, and most of these small businesses were started by baby boomers.”
As that generation – born roughly between 1946 and 1964 – prepares to retire, Tsang sees a new opportunity. “So we have a big sector to look after and resolve: succession planning,” he says. “One aspect is succession planning for businesses but you also have at a personal level the retirement sector.”
Tsang moved to New Zealand when he was 17 years old. He went to Auckland after high school
Facing the future
While Tsang’s firm has embraced modernity – they have certification from both the Xero and MYOB accounting software companies – he believes that tradition is an important part of the profession. “Despite the wave of digitization and artificial intelligence and everything, how business operates is still the good old networking, physical handshakes and in meetings.”
He chuckles as he recalls asking a younger employee to process a cheque. “‘How?’ he asked me.” Similarly, he is appalled at hearing about networking consultants teaching millennials how to network. “What we take for granted from 30 years ago – just human-to-human interaction – is now needed to be taught.”
Tsang adds: “I think this is sort of the challenges, the pros and cons of the digital age. On the one hand it’s giving us efficiency we’ve never seen before and on the other hand it erodes some of the good old fundamentals of how business operates. It comes back to the trust component. I actually want to see the person before I engage them.”
Not all traditions should be retained, Tsang notes. He supported the 2014 merger of the New Zealand Institute of Chartered Accountants with the Institute of Chartered Accountants Australia. “The merger had become necessary to expand membership, and to pool resources and get a bit more economy of scale.”
“There’s a subtle wave of Hong Kong people coming in pursuit of a better life. We are seeing young families in their late 20s and early 30s with maybe one kid, and willing to completely start afresh.”
For Withers Tsang and its 29 accountants – including Institute member, Winnie Wong, Associate of Withers Tsang – the future will lie with what Tsang calls the “Asia-China-Hong Kong interface.” He adds: “China has made substantial investments in New Zealand and we were the first country in the world to have a free trade agreement with China.”
Tsang says the firm has only been lightly impacted by New Zealand’s decision to ban most foreigners from buying investment properties in attempt to cool the market. Indeed, he expects migration to remain strong. “There’s a subtle wave of Hong Kong people coming in pursuit of a better life,” he points out. “We are seeing young families in their late 20s and early 30s with maybe one kid, and willing to completely start afresh.”
This new Hong Kong wave is motivated by a better lifestyle rather than financial reasons. But, Tsang adds, there’s some necessary adjustment in store for them. “One of the most uncomfortable conversations you have with a migrant from Hong Kong is to tell them that in New Zealand they have to pay tax on their worldwide income including interest and dividends.”
Nevertheless, there is much to love about the country, apart from the dramatic scenery. “Fishing in New Zealand is to die for. And you don’t have to be rich to own a ‘little’ powerboat. New Zealanders love boats like Hong Kong people love cars,” says Tsang, a fishing enthusiast and dad-of-two. “Our family loves spending time at our holiday lake house in Lake Tarawera, catching rainbow trout and water skiing.”
Tsang has found fulfilment in New Zealand despite the country’s size and distance from Hong Kong. In 30 years, the country has changed from an agricultural backwater to a highly developed economy. “I’ve never forgotten when I first arrived here and asked if I could get a copy of the business newspaper, and there wasn’t one – it was just one page or two pages in the daily paper.”
Since then, Tsang, in the course of building his firm, has been able to advise clients on a variety of sophisticated issues. “Clients in New Zealand, because of our very small nature, really appreciate and expect and rely on accountants’ advice,” he says. “Here, I am a jack-of-all-trades.”
In the last 10 years, there has been a 67 percent increase in Hong Kong residents leaving the city to work and live in New Zealand, citing reasons such as a high cost of living, unaffordable housing and a stressful lifestyle, according to the South China Morning Post.