Foreign investors who want to set up a company in New Zealand have several choices. The most common ones are registering new companies with the Trade Register or buying other companies. The second option is preferred by those interested in starting to do business on the New Zealand market as soon as possible.
Most of the times, they will buy New Zealand ready-made or shelf companies. Below, our company formation agents in New Zealand explain how to purchase a shelf company in this country.
| Quick Facts | |
|---|---|
| Legal entities available for shelf company | International Business Company |
|
Time required for purchasing the company |
1-2 business days |
|
Types of features it includes (corporate bank account, VAT number, etc) |
– open configuration, – registered office in Seychelles, – bank account (optional), – Government fees paid for the year in course |
| The advantages of a shelf company |
– credibility through age, – immediate commencement of business activities, – no bad credit, – flexibility |
| Appointing new directors |
Yes |
| Capital increase allowed |
Yes |
| Certificate of no commercial activities |
Upon request |
| Modify the objects of activity | Yes |
| Participants in the purchase procedure | The buyer (natural or legal person) and the seller (legal person) |
| The cost of buying a shelf company | It can start at 2,000 EUR depending on the age of the company |
Table of Contents
What are the characteristics of shelf companies in New Zealand?
Shelf companies in New Zealand have the following characteristics:
- – they are usually registered for a few months or years and have all the necessary documents to start economic activities right away;
- – most of the ready-made companies in New Zealand are registered as limited liability companies;
- – New Zealand shelf companies come with tax and VAT numbers and have no liabilities;
- – they can be purchased quite fast through sale-purchase agreements.
Our New Zealand company formation consultants can guide foreign investors who want to buy shelf companies. We can also help with due diligence procedures, as this is often recommended when buying a ready-made company.
What are the steps for purchasing a ready-made company in New Zealand?
Foreigners who want to purchase New Zealand shelf companies must follow the steps described below:
- select the right type of structure and verify if it suits their requirements;
- have the sale-purchase agreement drafted and meet with the seller in order to complete the formalities;
- once the company is bought, the necessary changes, such as the trade name, the company’s address, shareholders and director names must be announced to the Trade Register;
- apply for the necessary licenses required to operate, if the case requires.
Our company registration advisors in New Zealand can help with the changes that can be made to a shelf company.
Why buy a shelf company in New Zealand?
Shelf companies offer a fast start when it comes to doing business in this country. It is also easier to apply for loans with local banks through a shelf company because a legal entity that has been incorporated for a number of years, and has no bad credit, is more likely to receive the loan.
A shelf company will allow for certain business image advantages given its longevity. Investors do need to be mindful of its history however and our New Zealand company formation agents can help perform a complete due diligence. During this verification, we will look at:
- the company’s constitutive documents: most of the time these documents are drawn up in a general form, however, we will verify them along with the list of shareholders and directors, if any were registered during its existence;
- financial information: financial statements, inventory, audit reports (if any), transactional history; most of the shelf companies in NZ are offered for sale in a “clean” form, meaning that they have been registered but have not entered into any agreements; however, it is important to check if this is true;
- assets: we will check if the company has any assets in its name, such as equipment, real estate used for business locations and others;
- intellectual property: a verification of whether or not domestic and foreign patents, trademarks, copyrights exist for this company;
- employees: shelf companies have generally not had any employees, however, we will check for this to be true;
- others: our team will also check if the company has applied for any licenses or permits and if it has any environmental issues; we will also check any tax-related matters and whether or not the company was ever involved in litigation.
The list of items on the due diligence checklist will vary greatly from one company to another. A complete report is issued by our agents, together with any recommendations, should you decide to purchase the company for which the due diligence was performed. You can reach out to our New Zealand company formation agents if you wish to know more about how we can assist you when purchasing a shelf company.
The price of the shelf company varies according to its age, type, whether or not it has been used for trading before and other particulars. We advise investors to take these costs into account, compared to those related to company formation in New Zealand, were they to open a new company. If the rationale to purchase the shelf company is for its age, and not cost-related, then investors can proceed to choosing a business form that will suit their needs and will help them maintain a good business image.
New Zealand company requirements
When purchasing a shelf company in New Zealand, foreign entrepreneurs have the flexibility to choose among business types, as well as to change company particulars as they see fit once the ownership transfer is complete. However, one important issue needs to be kept in mind when doing business in New Zealand: all companies must have at least one director who lives in New Zealand or Australia (and if this is the case, then he must be a director of a company incorporated in Australia).
Foreign nationals can act as company directors, provided that they are present in the country for more than 183 days in a given 12-month period. In some cases, the Registrar may still take the director’s application into consideration even if he cannot satisfy the 183 day-rule. However, in this case, the Registrar will also look at the actual number of days spent in the country, the ties with New Zealand, if any, and whether or not the analyzed factors will allow the applicant to perform his duties as company director.
Companies in New Zealand pay the following taxes:
- a standard 28% corporate income tax;
- a 15% standard goods and services tax (this tax also has a reduced rate of 0% for some types of goods and services)l
- a fringe benefits tax (FBT) between 49.25% and 63.93% on the value of the fringe benefits offered to employees;
- there is no transfer tax, stamp duty, or net worth tax and inheritance tax; local authorities charge a real property tax at various rates.
NZ companies are expected to observe the due date for filing the annual income tax return and the monthly or bimonthly goods and services tax returns (or according to the value of the supplies made).
Once you purchase a company in NZ and become an employer, you will have a set of duties, including observing the minimum rights of employees, observing the requirements set forth by the Ministry of Business, Innovation and Employment, and paying the related employment taxes.
Foreign investors who do business in New Zealand have many advantages, among which transparent requirements, a good business climate and tax system as well as opportunities in different business fields.
For more information on the advantages of shelf companies or assistance in buying one, please contact our representatives in New Zealand.