In this article, we explore the answer to the question ‘How to start a business in New Zealand as a foreigner?’ New Zealand is welcoming to foreigners with the right business acumen, experience, and investment capital who can contribute to New Zealand’s vibrant business environment. Having an acclaimed first place in the World Bank’s Ease of Doing Business 2020, New Zealand is an ideal jurisdiction for foreigners to set up a business as the process to register a company in New Zealand is hassle-free. We will explore what are the steps for how to start a business in New Zealand as a foreigner.
How to start a business in New Zealand as a foreigner
Immigration New Zealand offers numerous visa options for investors and businessmen who have the intention of staying in the country and running a business in New Zealand. Depending on certain requirements, individuals can apply for an Entrepreneur Work visa or a Residential visa with Immigration New Zealand.
- Depending on the stage of your business, two types of Entrepreneur Work visa apply to you. If you are planning to start a business in New Zealand, you can apply for a six-month visa. Whereas for individuals whose business is steadily growing, you can apply to stay in New Zealand for another 2 years.
- To be granted an Entrepreneur Visa, you will have to fulfil these requirements:
- Minimum working capital of NZ$100,000
- A minimum of 120 points from the grading system
- A clean track record (no history of fraud or winding up)
- For foreigners who wish to settle in New Zealand to run a business, you may wish to apply for a residential visa. You can apply for two types of Residential Visa, six-month or two years. However, the barriers to applying for a Residential Visa are much higher as compared to the Entrepreneur Visa.
- For the two-year Residential Visa, apart from meeting health, language, and character requirements, you will have to be employed in New Zealand for 2 years, provide evidence that your business is operating well and is capable of providing substantial economic benefits to the country. Only then will you be successfully granted a two-year Residential Visa.
- However, if you fail to qualify for the two-year Residential Visa, you can apply for the six-month Residential Visa. Your business is required to invest at least NZ$50,000 and provide at least three permanent jobs to the country’s citizens or residents.
After obtaining a New Zealand visa, the next step is to decide on a suitable form of business structure. 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 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.
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 who lives in either New Zealand or Australia is considered to be a “resident”. 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.
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). The company name must be distinctive.
You can reserve a company name 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 and you must use your name reservation within 20 working days.
When you incorporate a new company in New Zealand, you will have to register with the Companies Office, the 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 Register website. You are required to pay a fee of NZ$150 when registering your company on the Companies Office website.
Once 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. When a company is registered in New Zealand, it automatically gets a New Zealand Business Number (NZBN), which is a globally unique identifier. If you are unsure of your NZBN, you can find it on the Companies Register or search it on the New Zealand Business Number website.
After the incorporation of a New Zealand company, your company is required to open a corporate bank account. A corporate bank account is essential for your business transactions, asset protection, and accounting and tax filing. Your company can open a New Zealand corporate bank account with reputable New Zealand banks, such as ANZ, BNZ, and Westpac.
Throughout the process of corporate bank account opening, you are not required to travel to New Zealand. In most cases, New Zealand banks will require the local director to visit one of the local branches for KYC verification.
Upon successfully incorporating your business in New Zealand, there are several industry-specific regulations you should take note of. For example, fair trading, privacy, consumer guarantees, health, and safety. You may use the Companies Matter website to see which central and local government regulations apply to your business.
Obtain licenses and permits
- Before commencing your business, it is crucial to ensure that you have obtained the necessary permits for your business activity. As regulatory systems of cities may differ, it is advisable to check the rules with your local council to avoid any complications in the future.
- Moreover, New Zealand is a reputable jurisdiction for people to conduct businesses in the finance industries. If required, your business will have to apply for New Zealand Financial Service Provider (FSP) license from NZ Financial Market Authority (FMA).
- 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. IRD number is a unique New Zealand tax reference number that identifies your business for all its tax-related events.
Find out how we can help you to start a business in New Zealand as a foreigner
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 for more information about the comprehensive range of services we offer to our clients to support them in the incorporation process of your New Zealand company and our team of experts will revert within the next 24 hours.