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Company Formation New Zealand

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Articles

Start a Business in New Zealand

Updated on Monday 06th December 2021

New Zealand is one of the most modern economies in the world. Relying on industries like manufacturing, services and tourism, this country attracts foreign investors from all corners of the world willing to open a company in New Zealand.
 
The Company Law is the main act providing for the procedure of incorporating a business in New Zealand. The law covers aspects like foreign ownership, types of companies that can be registered, the documents needed to start a business and the licensing requirements.

 Quick Facts  
  Types of companies

Limited Liability Company 

Co-operative company   

Unlimited company

Minimum share capital for LTD Company 

1 share of NZ$1

Minimum number of shareholders for Limited Company 

 1
Time frame for the incorporation (approx.) 

Less than 1 week, however, the process cannot be longer than 20 days after reserving the company name

Corporate tax rate

28% 

Dividend tax rate 

Different rates apply:

0% - 33% for resident companies   

0% - 15% - 33% for non-resident companies

VAT rate 

15% standard rate (in some cases 0%)

Number of double taxation treaties (approx.) 40
Do you supply a registered address?   Yes 
Local director required   Yes, exemptions may apply based on a number of factors
Annual meeting required  Yes, however, companies can be exempt from this rule in some cases
Redomiciliation permitted  Redomicilation of EU and EEA companies is permitted
Electronic signature  Yes
Is accounting/annual return required?  Yes 
Foreign-ownership allowed  Yes 
Any tax exemptions available?  Tax credits can be claimed for donations. Qualifying unlisted NZ companies can be exempt from income tax
Tax incentives

Research and development tax incentive scheme as well as other industry-specific concessions and rules apply. Limited inbound investment incentives are also in place.

 
Below, our company formation agents in New Zealand have prepared a comprehensive guide on how to set up a company in New Zealand.
 

 

Types of companies in New Zealand

 
The following types of companies ar available to those who wish to register a company in New Zealand:
 
 
  1. the sole trader or sole proprietorship which is suitable for one-man businesses; in terms of how to set set up a company in New Zealand, this business form is simple to form; the downside is that the entrepreneurs is liable for all the debts of the business;
  2. the partnership which is another simple way of doing business in New Zealand; it implies at least two members in the business; the partners are liable for the debts of the partnerships and this may also mean that one founder is liable for the partner’s debts;
  3. the limited liability company which is the most common business form in New Zealand and implies at least one shareholder and one director; the founders are not liable with their own assets as in other cases and this business form has more credibility, making it preferable for those who register a company in New Zealand; however, it is more regulated that the partnership or the sole trader;
  4. the subsidiary, branch and representative office are options for foreign companies interested in doing business in New Zealand.
Some of the main issues to take into consideration when choosing a business form, and when you start a business in New Zealand in general, are the following:
 
  • - how fast you can incorporate: those who choose to set up a company in New Zealand should know that the sole trader is easier to set up compared to the company;
  • - how much the start-up costs will be: the company will include different, more significant costs compared to the partnership or the sole trader;
  • - the level of liability: how comfortable are you to invest in a business and be liable with all of your assets? Do you prefer to have a separate legal entity?
  • - the size of the business: how may shareholders will be there in the business? How many directors? You need to decide this before you register a company in New Zealand;
  • - the future of the business: is this a company that will grow, is this a business that you will be interested in selling?
The answers to these questions are important when choosing the right manner in which the business will be structured. You can contact our specialists for details when you want to open a company in New Zealand.
 
The New Zealand company formation documentation and procedure will depend on the type of structure chosen. Our team can help foreign investors who are interested in starting a company here. We ca not only provide adequate assistance for choosing a suitable business form but will also guide investors throughout the subsequent steps for setting up the new legal entity. What’s more, we can provide ongoing assistance for tax registration matters and also for applying for the needed permits and licenses, which will differ according to the chosen business field. You can reach out to our agents who can help you start a business in New Zealand.
 

Requirements to register a company in New Zealand

 
The Company Law provides for various requirements for registering a company in New Zealand based on the chosen business form. It is important to know that New Zealand allows for full foreign ownership no matter the type of company.
 
Foreign enterprisers who want to start a business in New Zealand must complete the following steps:
 
  1. choose a business name: this needs to be unique and file it for approval with the Companies Register; it is important to check the availability and a special online tool allows investors to check for availability not only for the business name but also for usage as a trademark, web domain and social media;
  2. have a local address: this will be used as a legal and correspondence address for the company;
  3. members: register the shareholder(s) and the director(s) with the Trade Register in New Zealand; this is mandatory when you set up a company in New Zealand;
  4. incorporation documents: have the company incorporation documents drafted, notarized and filed with the Trade Register;
  5. mandatory registrations: register for taxation, goods and services tax (GST) and employment purposes;
  6. post-registration steps: apply for the necessary business licenses in accordance with the industry the company will operate in.
Our New Zealand company formation consultants can help foreign investors with the preparation of the incorporation documents.
 
When they set up a company in New Zealand, investors will obtain the New Zealand Business Number (NZBN), which is used as a unique identifier for the new business and links the information for other parties that will engage with the company (for example, the trade name and contact details). This number simplifies processes and corporations are automatically assigned this number upon registration. Self-employed individuals or partnerships can opt for this number allocation and this is a free of charge process. Our agents are here to help when you decide to open a company in New Zealand.
 

Taxation in New Zealand

 
Taxation in New Zealand depends on the chosen business form. As previously stated, when they start a business in New Zealand, investors can chosen between legal forms of various complexities and this also refers to tax liability and tax filing. Regardless, each business form will pay inform tax:
 
  • - sole traders file the individual income tax return;
  • - each of the partners in a partnership files his own return and there is also one for the partnership;
  • - the company will file the companies income tax return as per the usual requirements.
 
The current values for the most important taxes in New Zealand are listed below by our company incorporation specialists:
 
  • - 28% is the standard corporate income tax for companies; it also applies for branches in the country;
  • - the individual income tax rate has four different values according to the taxable income: 10.5%, 17.5%, 30% and 33%.
  • - 0% or 33% is the withholding tax rate on dividends applicable to resident and non-resident companies and individuals;
  • - 15% is the standard goods and services tax rate (the equivalent of the value-added tax) applicable to certain types of goods and services; a reduced rate of 0% can also apply.
If you wish to register a comapny in New Zealand, our agents can give you more details about the taxation principles.

Company incorporation services in New Zealand

 
When starting a new company in New Zealand, it is best to ask for legal support. Our company registration representatives in New Zealand offer the following services:
  • - drafting all the documents required to open a company and filing them with the Trade Register;
  • - tax registration and accounting services;
  • - virtual office services;
  • - business licensing services;
  • - business consulting services.
It is important to be mindful of the different regulations that apply in New Zealand in a particular business field. These can be related to health and safety, the sale of good and drinks, privacy or fair trading. Our team of New Zealand incorporation agents can help investors find out more about these regulations before you register a company in New Zealand.
 
Individuals and businesses involved in trade, those that import or sell products as well as those that sell services for personal or domestic use are subject to the Consumer Guarantees Act in New Zealand. This means that they must comply with the rules that offer guarantees to the customers that they will receive what they pay for and, if needed, receive proper repairs or refunds. Companies in the country need to observe the rules set forth in this Act, along with the many others laws and regulations for companies. The provisions of the Act apply to all businesses that are involved in trade, including small or temporary businesses and online traders. If you wish to start a business in New Zealand and engage in trade, our team can help provide clarifications.
 
All our services are tailored to our clients’ requirements and we provide complete compliance guidance according to the chosen type of company as well as the selected industry or region.
 
 

Start a business in New Zealand as a foreigner

 

Starting a business in New Zealand as a foreigner is a rewarding experience in a business-friendly location that allowed for multiple options and growth opportunities.

 
Investors who are considering doing investing the NZ have several routes, including buying a business or commercial property, buying shares in an existing local company or starting a new business, the investment route covered in this article.
 
One of the first steps foreign nationals need to take care of is determine the type of visa they will be using to remain in the country as an entrepreneur, followed by choosing the business structure and starting the actual incorporation process. Read below to find out more about the options and the steps for starting a business in New Zealand as a foreigner.
 

What are the visa options for foreign nationals who start a NZ business?

 
There are a number of types of visas that allow foreign nationals to enter the country to start a business, run their company or choose to live in the country. The following categories are suited for starting a business in New Zealand as a foreigner:
 
  • - Business visitor visa: allows the holder to visit the country for business purposes benefit from a length of stay for up to 3 months;
  • - Entrepreneur work visa: for foreign business professionals who wish to buy or open a company; the applicant must score a minimum of 120 points on the points scale and needs to make a capital investment of at least 100,000 NZ$; family members can accompany the holder of this visa; our team can give you more details;
  • - Entrepreneur resident visa: suitable for foreign nationals who are already in the country under a visa that allows self-employment and wish to remain permanently to continue to run their business here;
  • - Global impact work visa: applicable to innovative entrepreneurs or investors who have been selected by the Edmund Hillary Fellowship and also have 36,000 NZ$ maintenance funds;
  • - Global impact permanent residence visa: for owners of the Global impact visa (held for at least 30 months) who wish to remain in the country as permanent residents; the same maintenance fund applies, along with other criteria;
  • - Other options: entrepreneurs who are willing to invest a minimum of 3 million NZ$ in stocks, bonds, or other investments (as opposed to incorporating a new company) can apply for the investor visa.
 
Our team of New Zealand company formation experts can help you with more information about each type of visa. Reach out to us before starting the application process to find out more and apply for the one that suits your needs.
 

Reasons to start a business in New Zealand

 
New Zealand is one of the easiest countries to do business in the world according to various surveys. With an open economy mainly directed towards exports, the New Zealand government has simplified the regulations related to doing business here and has cut several taxes in order to make the country an appealing investment destination. Also, as a former British colony, English is the official language in New Zealand which makes communication very easy.
 
If you are interested in starting a business in New Zealand and need help, do not hesitate to contact us for a personalized offer. We can help you open a company in New Zealand.

Meet us in Wellington


Call us now at +44 203 287 0408  to set up an appointment with our business consultants in Wellington, New Zealand. Alternatively you can incorporate your company without traveling to New Zealand.

As a BridgeWest client, you will benefit from the joint expertize of local lawyers and international consultants. Together we will be able to offer you the specialized help you require for your business start-up in New Zealand.

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