Company Formation Services in New Zealand
General Overview of New Zealand
New Zealand, located in the South Pacific Ocean, comprises two main islands, the North and South Islands, and several smaller ones. The total land area covers 268,680 km², with an Exclusive Economic Zone extending over 4 million km². The country boasts a mild, mainly cool to warm temperate climate.
New Zealand is easily accessible by air travel and holds a favorable time zone, offering same-day access to Asia and parts of America. Wellington serves as the capital, while Auckland is the largest city. The population stands at 4.2 million, with around 70% of the population of European descent, primarily of British, Irish, and Dutch origin, often referred to as “Pakeha.”
Official languages in New Zealand include English, Maori, and New Zealand Sign Language.
Political Structure and Law
New Zealand gained independence as a dominion in 1907 and received full independence under the Statute of Westminster in 1931 and the subsequent adoption of this statute by the New Zealand Parliament in 1947. Since then, New Zealand operates as a sovereign constitutional monarchy with a parliamentary democracy. Queen Elizabeth II is recognized as the Queen of New Zealand under the New Zealand Royal Titles Act (1953), with representation by the Governor-General.
The majority of New Zealand’s legal framework is rooted in English common law. The country’s judiciary comprises the Supreme Court of New Zealand, the High Court, the Court of Appeal, and subordinate courts.
Economy and Infrastructure
New Zealand boasts a modern, developed economy and a high standard of living. Key export sectors include agriculture, horticulture, fishing, and forestry, with major trading partners such as Australia, the United States, Japan, China, and Germany.
The country offers well-developed communication, business, and commercial infrastructure, along with high-quality professional services. The legal and banking sectors maintain a high standard.
New Zealand’s economy has evolved significantly since 1984, with macroeconomic restructuring, the removal of interest and exchange controls, and a focus on building a “knowledge economy.” The country also emphasizes pursuing free-trade agreements.
New Zealand uses the New Zealand Dollar and does not impose exchange controls.
Setting up your Company in New Zealand
Company Incorporation Services
One of the significant advantages of establishing a New Zealand company is the country’s full membership in the Organisation for Economic Co-operation and Development (OECD), making it a non-harmful tax jurisdiction. New Zealand companies typically take the form of limited liability companies or limited partnerships. The incorporating company in New Zealand and management process is flexible, with no capital requirements and a straightforward incorporation procedure.
NZ Companies must have a local physical registered office in New Zealand for statutory filings and legal document deliveries. Virtual office addresses are not acceptable.
Incorporating in New Zealand
Types of Business Entities
Common types of companies in New Zealand include LTC (Look-Through Company), LLC (Limited Liability Company), LP (Limited Partnership), and Foreign Trust.
Shareholders and Directors
To set up a company in New Zealand, a minimum of one shareholder is required, and corporate shareholders are permitted. A minimum of one director is required, with no corporate directors allowed. While shareholders can be of any nationality, all New Zealand companies must have at least one New Zealand Resident Director. If a significant portion of shares or most directors reside outside New Zealand, the company must file annual financial accounts. Bearer shares are not allowed.
Annual Taxation and Fees
Resident companies in New Zealand are subject to taxation on their global earnings, while non-resident companies, which also encompass branches, are only taxed on income generated within New Zealand, as per any relevant Double Taxation Agreement (DTA). The corporate income tax rate in New Zealand stands at 28%.
However, if company profits are distributed as dividends to individual shareholders, these shareholders receive a tax credit for the tax already paid by the company, preventing double taxation.
New Zealand companies are taxed on their worldwide income. However, if a New Zealand company is structured as the Trustee of a non-resident New Zealand Trust, it is exempt from taxation. New Zealand has double tax treaties with approximately 40 countries, allowing companies to benefit from reduced non-resident withholding taxes on interest, royalties, and dividends.
Annual Accounts and Annual Returns
The rationale behind this requirement is that if more than 25% of the shares or a majority of Directors reside outside New Zealand, the company must generate annual audited accounts, which are then submitted along with the company’s annual return, based on the client’s discretion.
Both a company formed and registered in New Zealand under the New Zealand Companies Act 1993 (NZ Company) and a foreign body corporate incorporated and registered outside New Zealand but conducting business within New Zealand (Overseas Company) are obligated to submit an “Annual Return” in a specified month and pay the stipulated annual filing fee.
During the calendar year of its incorporation, a company is exempt from filing an Annual Return. Companies have the option to request a variation in the month for filing the Annual Return from the Registrar. A “Shuttle Annual Return” is dispatched by the Registrar to the company’s communication address or registered office one month before the filing deadline. Alternatively, there is the choice to submit the Annual Return online through the Companies Office.
The information provided in the Shuttle Annual Return is sourced from the New Zealand Companies Office database. Requiring an Annual Return serves as a vital means of validating the data stored in this database. In instances where information on the Shuttle Annual Return needs updating, the form includes instructions for making the necessary amendments. The completion date of the Annual Return corresponds to a specific day in the month it is due, and all information must accurately reflect the company’s status as of that date.
Companies neglecting to submit their Annual Returns by the specified deadline face the imposition of a late filing penalty. The Registrar of Companies issues a reminder letter to prompt companies and their directors regarding the overdue Annual Return. In the absence of a response to this reminder, the assumption is made that the company has discontinued its business operations, initiating steps for the removal of the company from the register. Ensuring the maintenance of updated addresses with the Registrar and timely filing of the Annual Return is crucial.
New Zealand Limited Liability Company (LLC)
An LLC operates as a distinct and legally recognized entity in its own right, setting it apart from the shareholders or beneficial owners. The members of an LLC enjoy personal liability protection against the company’s debts and obligations, distinguishing it from a partnership. Shareholders are generally shielded from the company’s debts, with the exception of any personal guarantees they may provide. In cases of unpaid amounts on their shares, the debts are typically the responsibility of the liquidator.
For non-residents of New Zealand engaged in international business activities, the utility of this company type is typically limited to serving as a corporate trustee or holding assets such as intellectual property. This limitation arises from the general practice of subjecting New Zealand companies to taxation on their worldwide income. Therefore, if the company generates income from any part of the world, it is essential to inform the Inland Revenue about its tax status and adhere to tax reporting procedures.
Benefits of Choosing New Zealand
- Offers an onshore trust structure with offshore characteristics.
- English is the primary language spoken in the country.
- Enjoys stability in both political and economic realms.
- An independent member of the British Commonwealth.
- The legal system is grounded in English common law.
- Trust Law in New Zealand aligns with that of other common law jurisdictions.
- Maintains a high standard in both legal and banking professions.
- Possesses a well-developed communication, commercial, and business infrastructure.
- Holds full membership in the Organisation for Economic Co-operation and Development (O.E.C.D).
- Recognized by the O.E.C.D as a non-harmful tax jurisdiction while offering advantages similar to offshore tax jurisdictions.
- Represents a novel approach to safeguarding offshore assets.
- A signatory to the 1922 Hague Convention, enabling the provision of documents under apostil seal.
With our efficient approach, our team of consultants ensures a smooth experience throughout the entire New Zealand business setup process. Our primary objective is to have your New Zealand company ready for operations within the agreed-upon timeframe.
Our service package encompasses all the essential elements for conducting business in New Zealand:
- Company registration with the New Zealand Companies Registry
- Provision of a New Zealand nominee director
- Local company secretary and registered address
- Opening a local or international corporate bank account
- Financial license application (if required)
- Tax registration
- Annual accounting and tax services
When Can I Expect to Commence Business?
TBA & Associates usually takes one week time to register your New Zealand company. Upon receiving the due diligence documents of the directors and shareholders, we conduct a search for the availability of your preferred company name in the Companies Registry.
Simultaneously, our legal team dispatches the necessary documents for company incorporation, including incorporation forms, power of attorney, nominee director agreement, and others. Once the paperwork is finalized, our consultants promptly proceed with the company formation.
Our Business Development Team completes the company formation without requiring your physical presence.
Upon completion, you will receive the details of your newly registered entity, including the company number and certificate of incorporation.
Within four weeks of company registration, TBA will facilitate the opening of a corporate bank account with a reputable local or international bank.
Our company licensing services
— What we do and do not do
Our company is EXCLUSIVELY engaged in assisting worldwide clients, either individuals or corporate entities, to get duly and properly licensed with local Regulators and Financial Authorities to get respective official licenses to legally carry out their cryptocurrency or financial related business activities.
TBA & Associates Tax Business Advisors does not provide or carry out any sort of Cryptocurrency or Financial services!
Disclaimer: While TBA & Associates strives to make the information on this website as timely and accurate as possible, the information itself is for reference purposes only. You should not substitute the information provided in this article for competent legal advice. Feel free to contact TBA Customer Services for advice on your specific cases.