With consistent levels of GDP growth, ties with some of the world’s most lucrative economies and a unique geographic position, New Zealand is a country unlike any other, and a new firm favorite for foreign investors looking to expand. Indeed, whereas Asian markets may be tough to crack due to language and cultural barriers, New Zealand is “comfortable territory” thanks to its English-speaking population and government and legislation being similar to that of the United Kingdom, reducing cost and time when incorporating a company.
How to Incorporate a Company in New Zealand?
Because of New Zealand’s location, the country has a relatively deregulated economy and has been ranked as the easiest country in the world in which to do business. The country is also known to be the least corrupt nation in the world and has a free and stable economy in which businesses are able to perform in whichever way they choose, albeit inside of the law.
Home to major industries such as agriculture, forestry, horticulture, manufacturing, fishing and food processing, the country has a strong exports market, sending billions of dollars worth of goods and services to other nations, with Asia representing 50% of its export trade.
Incorporating a company in New Zealand is a relatively simple and straightforward process. Unlike in some nations where solicitors and formal meetings are required, the entire process can be completed online by a single director or entrepreneur, reducing the barriers to entry. Below, we’ve put together everything you need to know about incorporating in New Zealand.
Before establishing a presence in New Zealand, it is important to assess the level of demand for your products or services in the country. Indeed, entering into the market without a prior understanding would be too risky and could result in significant losses, so we recommend a visit to the country to speak with potential buyers and stakeholders before you get started. If possible, research into local and international competitors, assessing their profits and market penetration, and come up with a unique company proposition that will set you apart from the rest. Remember that New Zealand is home to fewer than 5 million citizens – competition will be higher, and demand may not be as strong as it was in your home country, so partnering with other businesses or signing export contracts will enable long-term business viability.
Reserving a Name
Before you can begin the company incorporation process, you must reserve a name for your company. First, you can check the availability using the Companies Register, and then apply for the legal rights to your name. Requests are typically processed within two hours, and you will then have up to 20 working days to incorporate a business using that name, or it will be released to other entrepreneurs and businesses for their own business use in New Zealand.
Decide Your Company Type
There are several company types to consider when entering into New Zealand, but foreign investors will likely choose either a Branch Office, a Limited Partnership, or a Subsidiary.
- Branch Office: Set up a branch if you want to maintain your overseas company as the ‘HQ’ but trade within New Zealand. A Branch is not a legal entity in its own right and will be attached to the parent company. However, New Zealand operations will be governed by the countries law. Companies Act 1993 states that companies can establish a branch operation on the overseas register, and trade freely in the country.
- Limited Partnership: As a foreign investor, a Limited Partnership may be the most sensible option to consider. You will have limited liability protection for your business, and enjoy tax and confidentiality advantages. The company will have a separate legal personality to your existing company and have an indefinite lifespan.
- Subsidiary Company: Finally, you may want to consider a New Zealand Subsidiary to your main company, which can be 100% owned by foreign shareholders.
When setting up a business in New Zealand, you will likely require no government approval. However, overseas companies with more than 25% foreign ownership must be registered and file audited accounts with the respective government body, called the ‘Registry of Companies’, and these accounts will be filed on a public record, meaning that anyone can access them should they desire – a consideration to make if you operate in a sensitive or competitive niche.
Registering Your Company
Once you have assessed demand, decided on a name and chosen your company structure, you should visit the Companies Register website to incorporate your firm.
- Address: You’ll need to provide a registered office address for your business and provide a legal name and address for each of your directors. You must also state whether your directors are New Zealand residents.
- Shareholders: All companies must have at least one shareholder when signing up, and during the process, you’ll be asked for this individual/s personal information.
- Constitution: You can choose to set up a company with a constitution, where you can set out the rights and responsibilities of the company, the board, each director, and each shareholder. This is optional, although it is recommended as it can offer you vital legal protection if you have multiple shareholders or company directors.
- Tax registration: When incorporating your firm online, you can also apply for an Inland Revenue Department (IRD) number and register your firm for the Goods and Services Tax (GST). Doing this at the same time as company registration saves time and means that your incorporation certificate and tax details will be ready together. When registering for tax, you’ll be able to add an Inland Revenue nominee, who will be responsible for acting on behalf of the company when dealing with accounts/taxation.
- Industry: When incorporating, you’ll be asked to give the primary activity of your new business, and you’ll be given a Business Industry Code (BIC) as a result.
Let Biz Latin Hub Help
Although expanding your business internationally by founding a company in New Zealand has been made as straightforward as possible through an online tool, it is important that you understand business regulations and have a sound grasp of the country and its processes before you incorporate. Seeking legal advice will ensure your business remains compliant and that you can navigate any complications that may arise.