In the last few years, New Zealand has ranked quite high in various reports according to which it is among the easiest countries to do business in the world. This has attracted a large number of foreign investors and overseas companies interested in setting up operations here.
Foreign investors have a few options when it comes to the types of structures they can register, but foreign companies can also choose between the subsidiary and the branch office. Foreign companies seeking to first test the market can open representative offices in New Zealand.
One of the best ways of opening a business as a foreign company in New Zealand is by registering a subsidiary company, as it offers a high level of independence.
Below, our company formation specialists in New Zealand explain the requirements and steps to complete in order to open a subsidiary.
Opening a subsidiary in New Zealand implies registering a limited liability company with the local Trade Register. This implies choosing between a private and public limited liability company. The share capital requirements for opening a subsidiary in New Zealand are the same no matter the type of company chosen: 1 USD. The foreign company must appoint at least one director who must be a New Zealand national, however, one of the company’s representatives can apply for a residence permit and become a director of the subsidiary.
Another important requirement for opening a New Zealand subsidiary is for the company to have a legal address in this country. This will grant it the status of a resident company. The virtual office can be a good solution for the first phase of the company registration procedure in New Zealand.
The foreign company will also be required to open a bank account with a local bank in order to deposit the share capital of the subsidiary.
Foreign companies interested in opening subsidiaries in New Zealand must prepare the following documents:
The foreign company must also provide the date at which the subsidiary will start its operations in New Zealand, as well as a valid email address.
Once the subsidiary is registered with the Trade Register, it must also obtain a tax and VAT number and apply for the necessary licenses to start its activities.
Our New Zealand company formation consultants can help with the preparation of all the documents required to register a subsidiary in this country.
The subsidiary is regarded as a tax resident company in New Zealand, which means it will abide by the national accounting standards imposed here and file annual returns with the tax authorities in this country. It is important to know that the subsidiary has the possibility of choosing the month in which these returns will be filed.
When it comes to the taxation of a subsidiary, it will be subject to the corporate income tax on its worldwide profits. The corporate tax rate in New Zealand is 28%.
Opening a subsidiary company has many benefits for the foreign company. Among these we mention the fact that the subsidiary is an independent legal entity which can carry out other activities than the parent company, meaning it can adapt to the requirements of the local market.
The share capital requirements for opening a subsidiary in New Zealand are some of the lowest in the world, as for the company incorporation procedure – it takes about one week to have the company registered with the Companies Office.
It is also possible for holding companies to set up subsidiaries in New Zealand with the purpose of owning and managing other businesses.
From a taxation point of view, the New Zealand subsidiary will be treated just like any other local company and can apply for various benefits with the central authorities.
If you are interested in opening a subsidiary in New Zealand and need guidance, please contact us with full confidence. We can also help foreign investors who want to open other types of companies in New Zealand.