When setting up a company you may want to consider these factors:
Location will be another factor, since separate cities and regions may have different rules, costs and availability. It is always recommended to seek advice from relevant professionals, such as business or legal advisors, accountants and others depending on your needs.
English is one of New Zealand’s two official languages, and is universally spoken. The other official language is Maori (Te Reo), which is spoken mainly by the indigenous population.
Visitors from many countries do not require a visa for visits to New Zealand of less than three months. Generally, visitors are not allowed to work here. However, visas or work permits are available under various categories for people wishing to work in New Zealand either on a temporary or permanent basis.
New Zealand has a relatively deregulated and open economy. It is consistently ranked as one of the easiest countries in which to do business, one of the least corrupt, and having one of the highest levels of economic freedom.
Major industries include agriculture, forestry, fishing, horticulture, manufactured goods and food processing.
Major imports include mineral fuels, mechanical and electrical machinery, vehicles, pharmaceuticals, textiles, and plastics. Major exports include dairy products, meat, wood, mineral fuels, machinery, fruit and nuts, wine, fish, wool, horticultural produce, manufactured goods and tourism.
Due to New Zealand being a small economy they welcome new companies from around the world to help with their isolation. They make it easy for foreign companies to come and do business. They were one of the first economies to increase interest rates after the GFC (Global Financial Crisis), which demonstrates the resilience of the New Zealand economy. Its major trading partner is Australia and both countries have a special economical relationship, allowing both nationalities to move and work without the need for visas.
New Zealand encourages foreign investment; nevertheless, consent is required for certain categories of investment in New Zealand by overseas persons. This process is administered by the Overseas Investment Office (OIO) on behalf of the government. The general categories for which OIO consent is required are investment in:
• ‘Sensitive’ land
• Business assets worth more than $100 million
• Fishing quota
For these purposes, overseas persons comprise individuals who are not New Zealand citizens and are not ordinarily resident in New Zealand, and companies that are either incorporated outside New Zealand or have 25% or more foreign ownership.
A branch means the New Zealand operations of an overseas company. It is not a separate legal entity. The company incorporation is still held under another country’s jurisdiction, but the New Zealand operations are governed by New Zealand law.
Part XVIII of the Companies Act 1993 (sections 332 to 337) allows overseas companies to establish and register a branch operation in New Zealand on the overseas register.
Australian companies wishing to register a branch in New Zealand benefit from an information sharing arrangement between the Companies Office and ASIC. Registration is cheaper (if done online) than for companies from other countries, and you are only required to provide in your application the company’s Australian Company Number (ACN), together with the following New Zealand-specific details:
Australian overseas companies also benefit on an ongoing basis from reduced compliance requirements. For example, they need only file a simplified annual return, with ASIC supplying the Companies Office on request with the relevant information filed by the company in Australia.
A New Zealand branch (being legally the overseas company) bears directly any liabilities that it may incur under New Zealand law. There is no sheltering of liability behind a different legal persona. Establishing a special purpose company as the branch may help ring-fence this liability. In practice, however, limited liability may be illusory, unless the subsidiary is of substance in its own right, any significant commercial dealings may need to be guaranteed by the overseas parent.
A New Zealand branch of an overseas company will generally be considered non-resident for taxation purposes.
A New Zealand branch of an overseas company must file two separate sets of audited financial statements, one for its worldwide operations and one for its New Zealand business.
The Process of Registration
An overseas company wishing to register a branch in New Zealand must reserve its name with the Registrar of Companies and file a registration application within ten working days from the start of business.
The application must include:
The first step is to reserve the company’s name. This is an online process undertaken via ONECheck or RealMe on the Companies Office website. It is a relatively simple, speedy and low cost procedure.
ONECheck is an online search tool that combines a company name, domain and trademark search all in one place. It is designed for people who are looking at starting a new business, renaming their current business or just wanting to check their existing business name is secure. ONECheck packages all the relevant information in one place, so you don’t have to work from three different websites. ONECheck can do all the registering of your company name for a fee, or can be used just to check if the name is available (then use RealMe – see below – for registering a company name).
To go via the Companies Office: you will need to get a RealMe username and password from this site.
This site is where to register all of the company’s forms.
Cost: 10.22 NZD
Time: 2 hours to get approved. Must use this name within 20 days after approval
Using the same username and password on RealMe from registering the company name add in the below information to register a Branch Office in New Zealand.
Cost: $160.22 NZD
Time: 1 Hr to be registered on the overseas companies register.
From an investor’s perspective, a limited partnership provides the limited liability protection of a company and some of the flow through tax and confidentiality advantages of a partnership. The New Zealand limited partnership model is broadly comparable to limited partnerships in other jurisdictions, including Delaware, Australian states and the Channel Islands. The following issues may be relevant in deciding whether to establish a limited partnership.
Like a company, a limited partnership is a separate legal entity from its investors; which separation helps to protect those investors from losses and claims arising from the business activities of the limited partnership.
Register the Partnership
Registering a partnership is an online process undertaken via the Companies Office website. Apply to register a Limited Partnership by completing the prescribed form (Form LP1).
The application form requires the following information to be given:
Note: Limited Partners details will not be made publicly available on the Limited Partnerships Register. Each application must also be accompanied by a prescribed form of consent signed by every General Partner or that person’s agent authorized to do so in writing, consenting to be a General Partner
The online system is called RealMe. You will need to access the site to register all companies’ forms by registering a RealMe username and password.
Overall it is a relatively simple, speedy and low cost procedure. Once the application is processed, an incorporation application is filed containing particulars of partners, including addresses, and the name of the partnership.
Cost: The filing fees for establishing a limited partnership electronically are $270.00 NZD.
Time: 1 Hr to be registered on the overseas companies register. Maybe longer time to find partner and sign agreement
A subsidiary company is like a ‘child’ that is a wholly owned subsidiary of a ‘parent’ (overseas company). You can establish a wholly owned New Zealand subsidiary by registering a New Zealand company with 100% shareholding held by the overseas company.
The Registrar of Companies maintains a file for each company registered in New Zealand. This records addresses, shareholders, directors and certain other information in relation to the company. This information must be updated annually, is available publicly and can be accessed online using the RealMe username and password.
A “large” company incorporated in New Zealand that is 25% or more controlled by non-residents must file audited financial statements with the Registrar of Companies. There is no requirement to file the financial statements of an overseas parent company. Generally, the financial statements must be filed within six months of the company’s balance date. This may be extended in limited circumstances.
Dissolution and insolvency
A solvent company may be removed from the company register by a process known as a “members voluntary liquidation”. This requires the shareholders to appoint a liquidator, generally a suitably qualified accountant, who takes control of the company, discharges its liabilities and distributes the surplus to shareholders.
A strike-off mechanism is available whereby the directors or shareholders may simply request the Registrar of Companies to remove the company from the company register. However, such a mechanism should only be employed after obtaining appropriate professional advice due to the issues that arise, including residual exposure to creditors.
A company is not allowed to trade while it is insolvent (liabilities exceed assets). The directors of an insolvent company should seek advice from an insolvency practitioner or a lawyer regarding their options. These include:
All the steps can be done at the same time using RealMe, which saves time and effort as you receive all the documents to run your company in New Zealand. Note they are broken up into separate steps for reference.
The steps to register a subsidiary company are as follows.
The first step is to reserve the company’s name. This is an online process undertaken via the Companies Office website. It is a relatively simple, speedy and low cost procedure. It can be done via the Companies Office (RealMe) or via ONEcheck. ONECheck can do all the registering your company name for a fee or can be used just to check if the name is available then use RealMe see below for registering a company name.
Using ONECheck is an online search tool that combines a company name, domain and trade mark search all in one place. It is designed for people who are looking at starting a new business, renaming their current business or just wanting to check their existing business name is secure. ONECheck packages all the relevant information in one place, so you don’t have to work from three different websites. This site can be used to check if a companies name is available in New Zealand before you use RealMe to register the name.
To go via the Companies Office: you will need to get a RealMe username and password to register all companies forms.
Time: 2 hours to get approved, and must incorporate with this name within 20 days after approval
Cost: $10.22 NZD
This is done on the same website with the same username and password through RealMe. It is a one-stop shop to register name and company details. RealMe is also used in the future to add any changes to the company so when creating RealMe password and username make sure it is retained for future use.
Cost: $160.22 NZD
Time: 1 hr receiving via email your documents of incorporation and New Zealand Business Number (NZBN).
The final step is the lodging of signed director and shareholder consent forms. It is not mandatory to lodge a formal constitution. In the absence of a formal constitution, a company is regulated by the constitutional provisions of the Companies Act 1993.
Note:| Overseas companies are not required to file director or shareholder consent forms.
A formal constitution may add to or vary those Companies Act provisions and accordingly, that option should be considered having regard to the company’s particular circumstances.
Management and officers of a company incorporated in New Zealand must have at least one shareholder and one director. A director must be an actual person and may also be the sole shareholder. There is no requirement to have a New Zealand resident director or shareholder, nor is there a requirement to appoint a company secretary.
Minimum capital/capital maintenance: There is no restriction on the size of a company’s capital. The shares of companies incorporated in New Zealand do not have a par value. At the time of any issue of shares, the director(s) must be satisfied that the consideration for and terms of issue of the shares are fair, and pass a resolution and sign a certificate to that effect.
To register for employment tax and welfare, you can apply for a company IRD number (unique identification number from the NZ Inland Revenue), this is done by registering as an employer and register for GST when you incorporate your company online with the Companies Office.
Once the incorporation process is complete, you will receive the company’s certificate of incorporation and your IRD/GST number at the same time. Your employer registration pack will be sent to you within ten working days of receiving your IRD number.
|Note:||You are required to provide the IRD number of all New Zealand resident individual shareholders as well as the IRD number of each New Zealand resident director.|
Time: 1 day (can be combined with previous steps?)
Cost: No charge
The primary activity of a business is classified using a Business Industry Description and a corresponding Business Industry Code (BIC). Just start typing in a description that you think is right for your business. Then from the drop-down list choose the appropriate description and corresponding code.
The Business Industry Description classifies the main activity your business is involved in and for each Business Industry Description there is a corresponding Business Industry Code. This is the code that you supply to government departments.
The format of this Business Industry Code is seven characters, one alpha and six numeric digits.
Whether to incorporate in New Zealand, and what sort of entity to setup are just two of the many choices companies must make when expanding into a new market.
If the company intends to have staff in New Zealand they must also decide whether they will administer that employment internally or use a Global Employment Organization to handle payroll and Employer of Record responsibilities. A GEO Employer of Record solution is an attractive alternative where
The complexity of employment regulations in New Zealand makes the use of a GEO advisable coupled with local legal counsel to ensure full compliance with employment laws, for example the drafting of local contracts for workers.
Shield GEO provides a comprehensive service in New Zealand allowing companies to deploy their staff quickly with reasonable, clearly stated costs and timeframes. The company contracts directly with Shield to employ and payroll their staff on their behalf in New Zealand.
Shield GEO then becomes the Employer of Record. Shield GEO assumes the legal responsibility for these employees, sponsoring them on work permits, complying with local employment law and running their monthly payroll. Using Shield GEO is the fastest and most cost effective way to deploy local and foreign workers into New Zealand. Read more about outsourced employment through Shield GEO.