Having an acclaimed first place in the World Bank’s Ease of Doing Business 2020, New Zealand (NZ) provides an ideal business ground for all to set up a company regardless of whether you are an aspiring entrepreneur or experienced business owner. While starting a business may seem like a lofty dream, the first step to starting a business is to register a company in New Zealand. We will explore how to register a small business in NZ and list down important things to take note of.
How to register a small business in NZ?
- New Zealand offers different types of business entities for you to choose from, where each business entity caters to different types of business activities. Foreign companies that wish to operate a business in New Zealand can choose between these 5 business entities. This includes Limited Liability Company (LLC), Limited Liability Partnership (LLP), representative offices, branch offices, and sole traders.
- Prior to New Zealand business registration, it is crucial to fully understand your business model before choosing the most suitable business entity. Some considerations you should take into account include the type of business activity, tax obligations as well as potential personal liability.
- If you are looking to incorporate a company in New Zealand, it is recommended to set up a Limited Liability Company (LLC). Regardless of whether it is an onshore or offshore business, LLC is the most common business entity in the country.
- Before registering your New Zealand business, it is mandatory to register a business name in NZ. Before you apply to reserve a company name, you have to check the availability of the name. New Zealand company registration search can be done by using the Companies Register to search a company’s name, number, or New Zealand Business Number (NZBN).
- You can reserve a company name with the Companies Register and it is necessary for the company name to be distinctive. To reserve a company name, you must have a RealMe® login and an online services account with the Companies Register. The Companies Register office will check for all requirements once the application is submitted. Reserving a company name online costs $10 (plus GST) and you must use your name reservation within 20 working days.
- Registering a trademark is the best way to protect your company. If you would like to check if a trademark already exists on the NZ Register, you should use Trade Mark Check. Before you apply for a registered trademark, you should consider an initial assessment. It is recommended to apply for a search and preliminary advice (SPA) report from the Intellectual Property Office (IPONZ).
- It is mandatory for all companies incorporated in New Zealand to appoint a local resident director. According to the New Zealand Companies Office, a director is deemed “resident” only if he lives in either New Zealand or Australia. Additionally, the director must be present in either New Zealand or Australia for more than 183 calendar days per year.
- If your company is unable to appoint a local director, you can choose to appoint a nominee director instead.
- It is mandatory to register all company directors when you submit your online application with the New Zealand Companies Office. If you wish to register new company directors after the incorporation of your company, you will have to do so within 20 working days of their appointment.
- A company is required to have a registered office, an address for service, and an address for communication. The registered office address is the address where your company’s records like your share register are kept. On the other hand, the address for service is where legal documents like court documents are delivered.
- Both the address for the registered office and address for services must be physical addresses in New Zealand. However, the registered office address and address for service does not need to be the same place where your business trades.
- A company constitution includes the rights, powers, and duties of the company, its board, directors, and shareholders. Whether you are a company with limited liability, a sole trader, or setting up a small business, it is not mandatory to provide a company constitution. However, a company constitution may be useful in the future if your company is looking for investment by issuing shares.
- In New Zealand, selected goods and services tax (GST) is subject to 15%. If your business annual registration threshold exceeds NZD 60,000, your New Zealand company is required to register for GST with the Inland Revenue Department. However, registering for GST is optional for businesses earning less than NZD 60,000 per year.
- Your company will receive a company IRD number upon GST registration with the Inland Revenue Department. IRD number is a unique New Zealand tax reference number that identifies your business for all its tax-related events. However, if you complete the tax registration process as part of your company incorporation, your company will receive the Certificate of Incorporation and your Inland Revenue and GST numbers at the same time.
- When you incorporate a new company in New Zealand, you will have to register with the Companies Office, New Zealand company registration office. New Zealand company registration does not require to be in person as registration can be completed online on the Companies Office website. You are required to pay a fee of NZ$150 when registering your company on the Companies Office website.
- When submitting the company registration online, the applicant is required to fill out all the necessary paperwork along with providing authentic documents. After your company application has been processed, an email with the director and shareholder consent forms will be sent to you. Companies are given 20 days to sign the forms and fax them back to the NZCO office. Failing to do so will result in the expiration of the application.
- After the last consent form has been sent and your company is successfully incorporated, the Companies Office will issue a Certificate of Incorporation. The Certificate of Incorporation includes the company’s name, date of incorporation, and New Zealand company registration number.
- The New Zealand Business Number (NZBN) is a unique 13-digit identifier for all New Zealand businesses. The main purpose of an NZBN is to enable doing business easier and faster as your NZBN links to the information others need while working with your company. For example, using NZBN helps to speed up your dealings with the NZ government, suppliers and customers, and other businesses. If you are a sole trader, partnership firm, or self-employed, you can obtain the NZBN online for free. If you are a company, you will automatically obtain a New Zealand Business Number (NZBN) once your company is successfully incorporated.
Looking to register a small business in NZ?
New Zealand company registration is hassle-free if you are familiar with the entire incorporation process. Tetra Consultants strives to provide our clients with a seamless experience when setting up a company in New Zealand. Our team of experts will ensure that your New Zealand company can be operationally ready as soon as possible.
Contact us now for more information about the comprehensive range of services we offer to our clients to assist them in the incorporation process. Our experienced team will revert within the next 24 hours.