A U.S. startup has won permission to fly drones over people and beyond the view of their operators in New Zealand, a key regulatory step that could help open the skies over the EU, Australia and Canada to broader commercial use of un-manned aircraft.

SkyDrop, based in Reno, Nevada, and previously called Flirtey, received approval from New Zealand’s Civil Aviation Authority to operate a drone delivery hub in Huntly, a small town south of Auckland. Permission to operate more freely could eventually vault drone delivery from the experimental phase to an economically viable business.

“This is a major milestone for the industry and could make New Zealand the drone delivery capital of the world,” said Matt Sweeny, SkyDrop’s co-founder and chief executive officer. New Zealand regulators used a risk assessment model similar to ones in the EU, Australia and Canada, Sweeny said, adding that he’s confident additional countries will also grant his company approval.

In the U.S., drone delivery is allowed under strict guidelines via waivers granted by the Federal Aviation Administration. In a January report, the Government Accountability Office criticized the agency for lacking a comprehensive plan to integrate autonomous drones into the national airspace system.

SkyDrop’s drone can deliver packages weighing as much as eight pounds up to three miles. It hovers above the delivery location — typically someone’s yard — and lowers the package with a tether. An automatic parachute deploys to minimize injuries in the event of a crash, Sweeny said.

SkyDrop has delivered COVID-19 tests, Domino’s pizzas and 7-Eleven packages in the U.S. The company expects customers in New Zealand to include restaurants, auto parts stores and pharmacies.

Autonomous drones offer a potentially faster, cheaper way to deliver small parcels than paying drivers to fight through traffic and find parking. Alphabet Inc., Amazon.com Inc. and Walmart Inc., are all investing in drone delivery with mixed success.