Startups and scale-up technology companies are attracted to the business friendly environment, competitive tax regime and cultural familiarity that New Zealand offers. According to the World Bank, New Zealand consistently ranks in the top 5 in ease of doing business. Companies who have chosen New Zealand as the next location on their global expansion journey will need to manage the process of establishing a local company. This New Zealand company incorporation guide serves as an introduction to common considerations and steps.
Company Types
Foreign companies planning to establish a presence in New Zealand can choose between setting up a branch office or subsidiary. The most common type of entity is a limited company.
- Limited liability companies are the most common types of companies in New Zealand. They provide liability to shareholders only to the extent of money contributed to the company. These companies are governed by a board of directors which is responsible for making business decisions and overseeing the general affairs of the company. Directors can be appointed by other directors or by shareholders, and can be removed by an ordinary resolution of the shareholders. Limited liability companies with 50 or more shareholders (and 50 shareholder parcels) are called “code companies.”
- Branch: Overseas companies that are “carrying on business” in New Zealand must register as an overseas company with the New Zealand Companies Office (Companies Office). The term “carrying on business” is not comprehensively defined for this purpose, although it would capture having employees in New Zealand, having an office or premises in New Zealand or regularly transacting business in New Zealand.
Incorporation Requirements
Paid Up capital: Each shareholder contributes capital to the company by subscribing and paying for shares. There are no minimum capital requirements. The paid up capital can be as little as NZ$1.00.
Foreign Percentage Ownership: An New Zealand company only requires one shareholder which can include a company or person living overseas.
Local Director: A Limited company must have at least 1 director, and at least 1 director must ordinarily reside in New Zealand.
Corporate Secretary: A limited company is not required to have a company secretary, but if a company has 1 or more, at least 1 of them must ordinarily reside in New Zealand. Corporate secretaries are common in practice.
Office: Must have a registered office in New Zealand. This does not have to be owned or leased by the company, but the person who owns or leases that property must consent to it being the registered office of the company. Corporate records are generally required to be kept and maintained at the registered office. The provision of a local registered address by a law firm for third party service provider is allowed.
Complete Legal Paperwork
In order to register a company a legal firm, corporate secretary or corporate service provider will assist with the preparation of company incorporation paperwork. This will include articles of incorporation, constitution, first AGM meeting, share certificate, member consent forms, consent to act as director and other legal documents to support the incorporation. The provider will then continue to manage any new company resolutions that are required over the course of the company lifecycle.
Documents
The following documents are required for company registration in New Zealand:
- Provide Information Related to the Company
- Details of the Shareholders and Directors
- Application form
- If the applicant is a non-resident of New Zealand, passport and visa information must be submitted
- Contact Details of Company
- Information Pertaining to Resident Directors
Company Incorporation Procedure
- Register and Reserve the name of the company
The business name needs to be registered through an online method but before that it has to be ensured that the name that has been selected is not already being used. So the name of the company should be distinct. The reservation of the name of the company should be done with the ROC with minimum 1 shareholder, 1 director, and registered office.
- Obtain New Zealand Business Number
In the next step, New Zealand Business Number (NZBN) is obtained. It is a unique identifier for your business which helps others while working with your company. It is easier for you to do business once you obtain a company registration number in NZ as you don’t have to keep on repeating the same information over and over again while dealing with someone new or when something changes.
- Filing of the application form for company registration
The application form is filed with the appropriate authority along with the supporting documents. The application will be processed by the department in New Zealand responsible for company registration.
- Obtain Certificate of Incorporation
If the application submitted and documents are approved by the department then it will issue the certificate of incorporation.
- GST Registration
After the incorporation process is completed, obtaining Income Tax and GST license or certificate from the Inland Revenue is essential for doing business in New Zealand.
- Finalize Legal Setup
Upon execution of legal paperwork, the service provider engaged will provide a copy of the official certificate of incorporation issued by Companies Office, or Companies Register. In New Zealand, Companies Office maintains a system of corporate records via an online platform that can be accessed by directors or your corporate secretary. The Companies Register profile will include a NZBN which is used for a number of the following registrations.
File Mandatory Registrations
Once the company has completed the legal paperwork, registered the company and is provided a NZBN number then they can begin the process of registering with the required agencies. In New Zealand these include:
- IRD: Inland Revenue Department
- PAYG: Income tax deductions
- GST: Goods and Services tax
- Fringe Benefits Tax
- Kiwi Saver
- ACC Workers Compensation
Key Regulatory Authorities
The primary regulatory authority for company registration in New Zealand is the Companies Register in New Zealand. The law that governs the registration of companies in New Zealand is the Companies Act, 1993. The following are the authorities that regulate the activities of companies registered in New Zealand:
The Companies Office- Main body for maintaining all information pertaining the registers of the companies incorporated in New Zealand.
Ministry of Business, Innovation and Employment (MIBE)- This authority is responsible for bringing out different form of policy changes in the law that regulates companies in New Zealand.
Insolvency and Trustee Services (ITS)- Administers all the procedures related to bankruptcy and insolvency in New Zealand.
Financial Markets Authority– Regulates all the financial activities of companies in New Zealand. Apart from this, it checks into activities such as Money Laundering and Terrorist Financing in New Zealand.
Inland Revenue Authority– The Inland Revenue Authority looks into the aspects related to taxation and other form of services in New Zealand.
Reserve Bank– This authority is considered as one of the Central Monetary Authorities in the country. Liquidity in the country is controlled by this institution.
Setup Bank Account
The final step is to decide the bank to work with. New Zealand has a developed banking infrastructure that startups and scale-ups alike benefit from. The process of establishing a bank account can be an unexpectedly long process that many companies do not sufficiently plan for. This can include extensive application documents, notarized director documents, KYC documentation and in person signatures. Common local banks in New Zealand include ANZ, ASB, BNZ, Kiwibank, and Westpac Bank.
