Having forged close relations with countries in the Asia-Pacific region, New Zealand is an ideal place for business owners who wish to expand their business to the New Zealand, Australia, and Asian markets in the region. Due to its strong support infrastructure, skilled labour force, and numerous Free Trade Agreements (FTAs), setting up a company in New Zealand as a foreigner is an attractive option for many business owners. By following the steps below, you can easily register company in New Zealand.
Steps to setting up a company in New Zealand as a foreigner
[ps2id id=’step1′ target=”/]#1 Choose an optimum business entity
- Before you start any business, it is important to consider the business entity you wish to incorporate. Based on your company structure, business activity, and long-term goals, the optimal business entity will be different for every company. In New Zealand, business owners tend to incorporate the following business entity:
- A sole trader is a business entity that can be started by a single individual. An individual may want to start a business as a sole trader to gain better control of his or her business. To become a sole trader, an individual must have a personal Inland Revenue Department (IRD) number to pay income tax and goods and service tax (GST), obtain the required government licenses and permits needed by the business, and possess the necessary qualifications for his or her profession. It is also mandatory to register for GST if the business earns over NZD 60,000 annually. A sole trader can choose whether or not to hire employees if he or she meets the requirements stipulated by the IRD. In the case that a sole trader wishes to hire employees, he or she must be registered as an employer with IRD.
Limited Liability Company
- A limited liability company is a private company limited by shares and is regarded as a separate legal entity from its shareholders. This means that shareholders and directors will not be held liable for any debt and liability incurred by the company. Instead, they will only be held liable for the paid-up capital they have invested in the company. This is the most popular type of business entity in New Zealand. While there is no minimum paid-up share capital requirement for a limited liability company, all limited liability companies incorporated in New Zealand must have at least one resident director, one shareholder, and a registered address.
- A limited partnership is formed when two or more partners decide to work together to run a business together. In a limited partnership, there will be a general partner and a limited partner. A general partner will be in charge of overseeing the business’s daily operations and will be held liable for all the debts and obligations incurred by the business. Meanwhile, a limited partner will not have control over the operations of the business and will only be held liable for the liability incurred by the business by the amount of investment they hold in the partnership. In essence, a general partner has unlimited liability, but a limited partner has limited liability.
- A branch office is an extension of the parent company, which implies that it is not considered to be a separate entity from the parent company. Foreign companies incorporated outside of New Zealand can choose to set up a branch office to conduct business activities in New Zealand. The parent company and the branch office will not be regarded as separate legal entities. In essence, the parent company will be held responsible for all the debt and obligations incurred by the branch office. However, a branch office is still required to file audited financial statements and pay corporate income tax on profits sourced from New Zealand. Foreign business owners may choose to set up a branch office instead of a limited liability company because of the reduced level of paperwork and cost in terms of accounting, management, and setup.
- Alternatively, foreign companies incorporated outside of New Zealand can choose to incorporate a New Zealand representative office. A representative office is also an extension of the parent company but unlike a branch office, it cannot sign contracts or conduct any commercial activities that generate revenue. Generally, foreign investors may choose to set up a representative office to conduct market research, promote advertising campaigns and collect information.
[ps2id id=’step2′ target=”/]#2 Reserve company name
- After you have chosen the optimal business entity for your business, you can proceed to check for the availability of your company name through the Ministry of Business, Innovation, and Employment (MBIE)’s ONECheck tool. If your company name is unique, you can register business name in New Zealand through the online services account. To create an online services account with the Companies Register, you will have to create a RealMe® login account through the New Zealand Companies Office website. Through the online services account, you can reserve your company name for 20 working days. If you need more time to register your company, you can pay NZD 10 to reserve your company name for an additional 20 working days.
[ps2id id=’step3′ target=”/]#3 Draft the company’s constitution
- Once you have reserved your company’s name, you can proceed to draft your company’s constitution. A constitution is required to govern your company as it states the rights, duties, and authority of the company, the Board of Directors, and the shareholders. Although your company does not need to prepare its own constitution, it is highly recommendable that you do so because a drafted constitution will provide you with more flexibility to control the rules and regulations that govern your company. In the case that you choose not to draft your own constitution, your company will be governed by the Companies Act 1993.
[ps2id id=’step4′ target=”/]#4 Register business with the Companies Office
- Next, you can start to prepare the documents required for New Zealand company registration. Besides submitting the constitution, you will be required to fill in the contact details of your company such as the company’s registered address and contact number, in the application form. You will also need to file consent forms for the directors and shareholders in your company. The registration of your company can be done through the online services account. In the same application, you can complete your company’s tax registration by registering for an Inland Revenue number and a GST number. Upon successful incorporation of your company, you will receive your company registration number, Inland Revenue number, and GST number.
[ps2id id=’step5′ target=”/]#5 Open corporate bank account
- After you have received your Certificate of Incorporation, you can proceed to open a corporate bank account. New Zealand has many reputable banks that provide satisfactory customer service and high-quality internet banking facilities. Most banks will require you to submit a business plan, audited financial statements (if applicable), and detailed information about the qualifications and experience of your directors and management team.
[ps2id id=’step6′ target=”/]#6 Apply for relevant business licenses
- Lastly, you may need to apply for a business license if you are conducting business activities in certain industries. For example, if you wish to provide financial services in New Zealand, you will have to register your company as a Financial Service Provider and apply for a Financial Service Provider License through the Financial Markets Authority.
Need help setting up a company in New Zealand as a foreigner?
Although setting up a company in New Zealand as a foreigner may seem like a simple process that can be completed online, it is not easy to draft the constitution, due to the legal expertise and knowledge required. Furthermore, applying for the appropriate business license may be complex because of the strict requirements required for specific business activities.
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 to know more about setting up a company in New Zealand as a foreigner and the comprehensive service package we offer to our clients to do so. Our experienced team will revert within the next 24 hours.