Due to its political stability, strong support infrastructure for businesses, and transparent legal system, New Zealand is an attractive jurisdiction for business owners seeking to expand their business to New Zealand, Australia, and the surrounding Asian markets. While the most common business entity in New Zealand is a limited liability company, business owners may also choose to set up a limited partnership, branch office, or representative office, depending on their business structure. Before you consider setting up a business, it is important to consider the total cost to register company in NZ. The cost associated with New Zealand company registration will include the minimum capital requirement for a company set up, the registration fee for each company incorporation service, licensing fees, filing fees, and tax returns.
Cost to register a company in NZ
#1 Minimum capital requirement
- Unlike many jurisdictions, there is no minimum share capital requirement to set up a company in New Zealand. This is applicable to all business entities including sole trader, limited liability company, partnership, branch office, and representative office. As such, it is quite cheap to set up a company in New Zealand, especially since the registration fees are also relatively low.
#2 Company registration fee
- The cost to register a company in NZ includes the cost to register business name in NZ and the cost for incorporation with the Companies Office. To reserve a company name for 20 business days, you will have to pay a fee of NZD 10, excluding the goods and service tax (GST). If you wish to reserve the company name for an additional 20 days, you will have to pay an additional NZD 10. Generally, the fee to incorporate a company, excluding GST and the fee for company name reservation, is NZD 114.39. Once your company has been successfully incorporated, you will receive a company registration number, certificate of incorporation, an Inland Revenue number, and a GST number.
#3 License Fees
Depending on the type of business activity your company conducts, you may be required to apply for a business license. The most common type of license required in New Zealand is the Financial Service Provider License. If you wish to provide financial services in New Zealand, you will have to register your company as a financial service provider with the Companies Office and apply for a financial service provider license through the Financial Markets Authority. In New Zealand, you can provide the following financial services:
- Authorised body under a financial advice provider
- Client money or property services provider
- Derivative issuers
- Discretionary investment management services (DIMS)
- Equity or debt issuers
- Financial advice provider
- Financial adviser
- Financial market infrastructures
- Independent trustees
- Managed investment scheme manager
- Market operators
- New Financial Advice Regime
- Peer-to-peer lending service providers
The fees to register for a financial service provider license in New Zealand will differ based on the type of financial service your company provides. The registration procedure and fee information can be found on the Financial Markets Authority website.
#4 Annual Return
- All business entities in New Zealand, except for sole traders, must file an annual return with the Companies Office to verify that the business is still in operation. An annual return is not a financial document. Instead, it is a record of publicly available information about a company registered with the Companies Office. An annual return contains information about the company such as the details of the directors and the officeholders, as well as the registered address of the company. Companies typically do not need to file an annual return in the calendar year that it is registered. The fee to file for an annual return each year is approximately NZD 50. If your company does not file its annual return by the stipulated deadline, the Companies Office in New Zealand has the right to remove the company from the Companies Register.
#5 Financial statements
- A New Zealand company must file audited financial statements if the total assets for the company and its subsidiaries are worth more than NZD 20 million or the annual turnover is more than NZD 10 million. In the case that a New Zealand company has more than 25 percent of its voting shares held overseas, it will be required to file audited financial statements if the total assets of the company and its subsidiaries are worth more than NZD 60 million or the annual turnover is more than NZDD 30 million. The fees required to file the financial statements under the Companies Act 1993 is NZD 201.25. Companies that provide financial services and are regulated by the Financial Markets Authority are required to submit their financial statements under the Financial Markets Conduct (FMC). The annual fee to file a financial statement under the FMC is NZD 270.25.
#6 Tax Return
- All New Zealand companies are subjected to an annual corporate income tax at a flat rate of 28%, regardless of the location the income was derived from. Non-resident companies, such as branch offices, will be taxed only on income derived from business activities within New Zealand. There will be no withholding tax on repatriated profits for a branch office in New Zealand. Generally, a financial year in New Zealand runs from 1 April to 31 March, unless permission has been attained from the Inland Revenue Department (IRD) to amend the company’s financial year. All companies will file their tax return with the IRD.
- Goods and services in New Zealand are also subjected to a goods and services tax (GST) of 15%. There may be customs duty levied on certain imported goods and the rate ranges from 1% to 10%. Businesses with an annual turnover of NZD 60,000 will be required to register for a GST number and pay GST taxes.
- In addition, dividends paid to a non-resident are subject to a withholding tax rate of 30%. Interests and royalties paid to a non-resident will also be subjected to a withholding tax rate of 15%. Generally, there is no withholding tax on payments of technical services fees in New Zealand, except for services that are related to royalties.
Need help managing the cost to register a company in NZ?
While the cost to register a company by yourself in NZ is relatively low, it may be difficult to set up a company in New Zealand without engaging a service provider. This is because a company incorporated in New Zealand must have a resident director. If your company does not have a director who resides in New Zealand, you will need to employ a nominee resident director. Furthermore, drafting a constitution and opening a corporate bank account in New Zealand may be difficult and time-consuming because it requires the necessary legal expertise and negotiation skills, respectively. Hence it may be much more convenient to employ a service provider to set up your company in New Zealand.
Tetra Consultants provides you with a fast and easy way to register company in New Zealand through our service package which includes company registration with New Zealand Companies Registry; provision of New Zealand nominee director, local company secretary, and registered address; the opening of a corporate bank account; tax registration; and annual accounting and tax services. Tetra Consultants will also recommend the type of business entity suitable for your company, based on your long-term goals and business model.
Contact us now if you wish to find more information about the incorporation process in New Zealand and our comprehensive range of services allowing you to do the same. Our experienced team will revert within the next 24 hours.