DOING BUSINESS IN NEW ZEALAND IN 2023
Since 2003, Healy Consultants Group has assisted our Clients with registering their new business in New Zealand. Our services include i) New Zealand company registration ii) government license registration iii) business bank account opening iv) employee recruitment v) visa strategies and vi) office rental solutions.
| Compare different New Zealand entities | LLC | Public limited company | LLP | FSP Registered Company | Representative office | Branch office | Trust |
|---|---|---|---|---|---|---|---|
| Also known as | Ltd | PLC | LLP | FSP | RO | Branch | Trust |
| Best use of company? | All products and services | Secure public funding | Professional services | Global financial services | Marketing & research | Specific projects | Tax planning |
| How soon can you invoice Clients/sign sales contracts? | 1 week | 1 week | 1 week | 8 months | Cannot | 2 weeks | Cannot |
| How soon can you hire staff? | 1 week | 1 week | 1 week | 1 week | 1 week | 2 weeks | Cannot |
| How soon can you sign a lease agreement? | Immediately | Immediately | Immediately | Immediately | Immediately | Immediately | Immediately |
| How long to supply corporate bank account numbers? | 4 weeks | 4 weeks | 4 weeks | 8 months | 4 weeks | 4 weeks | 4 weeks |
| How long to supply company registration/tax numbers? | 2 weeks | 2 weeks | 2 weeks | 2 weeks | 2 weeks | 2 weeks | 2 weeks |
| Corporate tax rate on annual net profits? | 28% | 28% | 0% | 28% | 0% | 28% | 0% |
| Limited liability entity? | Yes | Yes | Yes | Yes | No | No | Yes |
| Resident director/partner/manager/legal representative required? | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| Minimum /recommended paid up share capital? | US$1 | US$1 | US$2 | US$200,000 | None | None | US$10,000 |
| Can bid for Government contracts? | Yes | Yes | Yes | Yes | No | Yes | No |
| Corporate bank account location? | ANZ New Zealand | HSBC New Zealand | Bank of New Zealand | Westpac New Zealand | Kiwibank | Bank of China NZ | ICBC |
| VAT payable on sales to local customers? | 15% | 15% | 15% | 15% | Cannot trade | 15% | Cannot trade |
| Average total business set up engagement costs? | US$17,235 | US$8,830 | US$9,200 | US$52,760 | US$18,530 | US$10,330 | US$35,750 |
| Average total engagement period? | 7 weeks | 8 weeks | 7 weeks | 8 months | 10 weeks | 10 weeks | 9 weeks |
| Accounting and tax considerations | LLC | Public limited company | LLP | FSP Registered Company | Representative office | Branch office | Trust |
|---|---|---|---|---|---|---|---|
| Statutory corporate tax payable? | 28% | 28% | 0% | 28% | 0% | 28% | 0% |
| Legally tax exempt if properly structured? | No | No | Yes | No | Yes | No | Yes |
| Must file an annual tax return? | Yes | Yes | Yes | Yes | Yes | Yes | No |
| Must file annual financial statements? | Yes | Yes | Yes | Yes | Yes | Yes | No |
| Monthly VAT reporting to the Government? | Yes | Yes | Yes | No | Yes | Yes | No |
| Must appoint an auditor? | No | Yes | No | No | No | No | No |
| Access to double taxation treaties? | Yes | Yes | Yes | Yes | No | Yes | No |
| Withholding tax on payments to foreign shareholders? | 30% | 30% | 30% | 30% | None | 30% | None |
| Company Registration | LLC | Public limited company | LLP | FSP Registered Company | Representative office | Branch office | Trust |
| Resident director/partner/manager/legal representative required? | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| Minimum number of shareholders/partners? | 1 | 1 | 2 | 1 | Parent company | Parent company | None |
| Maximum shareholding for foreigners? | 100% | 100% | 100% | 100% | 100% | 100% | 100% |
| Minimum / recommended statutory paid up share capital? | US$1 | US$1 | US$2 | US$100,000 | None | None | None |
| Shelf companies available? | Yes | Yes | Yes | No | No | No | No |
| Time to incorporate a new entity? | 1 week | 1 week | 1 week | 8 months | 1 week | 2 weeks | 1 week |
| Legal registered office required? | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| Board meetings held anywhere in NZ? | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| Must sign an office lease agreement during incorporation? | No | No | No | Yes | No | No | No |
| Can easily convert to a PLC? | Yes | Yes | No | Yes | No | No | No |
| Public register of shareholders and directors? | Yes | Yes | Yes | Yes | Yes | Yes | No |
| Can have preference shareholders/partners? | Yes | Yes | Yes | Yes | No | No | Yes |
| Business Considerations | LLC | Public limited company | LLP | FSP Registered Company | Representative office | Branch office | Trust |
| Can secure residence visa for business owner? | Yes | Yes | Yes | Yes | Yes | Yes | No |
| Good entity for trademark registration? | Yes | Yes | Yes | No | No | Yes | No |
| Can secure an import and export license? | Yes | Yes | Yes | Yes | No | Yes | No |
| Sponsorship by a local citizen required? | No |
| Our Client needs to travel to New Zealand for business set up? | No |
| Temporary physical office solutions available? | Yes |
| You need a local resident as bank signatory? | No |
| Can be wholly foreign owned? | Yes |
| The entity will likely be regulated by? | Companies Office |
| Minimum number of directors/managers? | 1 |
| Shareholders & directors documents to be attested\translated? | Yes |
| Each foreign director needs a personal income tax number? | No |
| Intl Clients need local corp. bank A/C before receiving tax nos.? | Yes |
| Can I invoice customers before tax registration? | No |
| Foreign non resident director needs a residence visa? | No |
| Maximum number of staff allowed? | No maximum number for any entity |
| Expatriate to local staff ratio? | None |
| Other useful information | |
| What will be included in my customer sales invoice? | Click link |
| This country has signed free trade agreements? | Yes |
| This country is a member of WIPO/TRIPS? | Yes |
| This country is a member of the ICSID? | Yes |
| Average custom duties suffered? | 1.4% |
| Government foreign investment approval required? | No |
| Average monthly office rental? (US$ per sq m) | US$478 |
| Minimum statutory monthly salary? | US$1,883 |
| Average monthly US$ salary for local skilled employees? | US$2,700 |
| US$ deposit interest rate? (1 year average) | 1.12% |
| Overseas remittance currency controls? | None |
| Banking considerations | |
| Multi-currency bank accounts available? | Yes |
| Corporate visa debit cards available? | Yes |
| Quality of e-banking platform? | Excellent |
| Crowd funding available in this country? | Yes |
| Group HQ tax incentives? | No |
| Security deposit to be kept with Government? | No |
| Can secure trade finance? | Yes |
| Government grants available? | Yes |
| Government approval required for foreign owners? | No |
New Zealand business setup summary
Press the link headings below to read detailed, relevant, up to date information.
Benefits and problems
Benefits of New Zealand company registration
- Setting up a New Zealand company is straightforward because:
- A New Zealand LLC can be setup within a week with only one director and one shareholder;
- The minimum paid up share capital for a new company is NZ$1;
- Our Client does not need to travel to New Zealand to complete the engagement.
- New Zealand is business-friendly because:
- It is ranked as the world’s easiest jurisdiction for doing business;
- It is considered one of the world’s least corrupt countries;
- While all tax-resident New Zealand companies must pay tax on their worldwide and New Zealand sourced income at a standard rate of 28%, there are no capital gains, inheritance or wealth tax.
- The New Zealand Government offers generous business set up incentives to multinationals:
- The New Zealand Trade and Enterprise Agency offers i) tax credits for Research and Development (R&D) expenses for start-ups of up to NZ$255,000 per year and ii) provides credit insurance which can cover up to 80% of the value of goods and services exported abroad;
- The Energy Efficiency & Conservation Authority offers loans and funding for energy- efficient projects including i) fuel efficiency programmes for transportation companies ii) company energy management tools and iii) energy audits for manufacturing companies, among many others;
- The New Zealand Film Commission offers film production grants for i) large budget screen production and ii) post digital & visual effects. These grants are worth an average of US$20,000 per subsidised production, but can reach US$3,000,000;
- Securing loans in New Zealand is easy, thanks to an efficient banking sector. New Zealand is ranked as the world’s best country in which to secure a loan by the World Bank. Local banks are, in particular, supportive of SMEs;
- The New Zealand Venture Investment Fund was established by the government in 2002 to assist the country’s venture capital market. Consequently, there are a large network of venture capital firms and angel investors ready to finance entrepreneurial ideas. The country is ranked by the World Economic Forum as the world’s 18th best place to access venture capital.
- New Zealand has a lower cost base than Australia:
- Average wages, at US$3,425 per month, are 40% lower than Australia’s US$5,680. New Zealand employers also pay social security contributions representing only 3% of their employees’ gross salaries, against 19% in Australia;
- New Zealand businesses pay total effective taxes averaging 34.6% of their earnings, against 47.4% in Australia. These effective rates include corporation tax, payroll contributions and GST;
- Average rental of warehouse space in New Zealand was US$124 per square meter in 2019. Office space in Auckland’s CBD was US$450 per square metre in 2019, while suburban areas can be as low as US$290 per square metre;
- Living costs are over 10% lower in New Zealand than Australia, including i) housing ii) restaurants and iii) transportation. Melbourne and Sydney are ranked as the world’s 50th and 79th most expensive cities respectively, while Auckland is 81st.
- New Zealand is a favourable trading base:
- New Zealand companies enjoy zero tariffs when selling their products and services to Australian consumers;
- New Zealand companies also enjoy free trade agreements with i) ASEAN countries ii) China and iii) Gulf Co-operation Council (GCC) countries;
- Because of the above, New Zealand is a lucrative destination for manufacturing and export-oriented businesses, especially high value manufactured products and services.
Problems with New Zealand company registration
- All New Zealand companies must appoint a director resident in either New Zealand or Australia. Healy Consultants offers professional New Zealand passive resident director services to comply with this requirement;
- A New Zealand company is subject to a relatively high corporate income tax rate of 28% and value added tax (VAT) of 15%;
- Foreign-owned companies must file audited financial statements every year, if their annual sales are expected to exceed US$24,000. Healy Consultants will negotiate with the New Zealand government for exemption from this annual administrative requirement;
- Every New Zealand company must file an annual return and tax return;
- New Zealand is a small domestic market with a population of only 4.8 million. As such, it is not a desirable destination to expand small businesses or launch and test new products in an unknown market;
- New Zealand Financial Services Providers (FSPs) are finding it increasingly difficult to open local corporate bank accounts, due to stricter requirements on having i) local employees ii) a local office iii) a local active resident director and iv) local customers;
- There is a lack of financial support from banks for small businesses and start-ups. Consequently, these ventures often have a high failure rate;
- Despite being able to register a New Zealand company in just two weeks, our multi-national Clients can only issue invoices to customers once the company is tax registered. Unfortunately, it takes on average eight weeks to open a corporate bank account. Two weeks after that, the New Zealand government will issue tax numbers for the company.
- Setting up a New Zealand company is straightforward because:
Best uses for a New Zealand company
- New Zealand companies are amazingly attractive vehicles for our international Clients’ to conduct their global business, including:
- The “Look Through” company is a New Zealand resident company. Look Through Companies can be formed by individuals, such company can enjoy under some conditions the network of New Zealand’s double taxation avoidance treaties;
- New Zealand companies can be used as a holding companies or as trading companies if all its operations are done outside of New Zealand. The corporate bank account can be opened outside of New Zealand in a country like Singapore, Germany or the United States;
- New Zealand companies can also apply for a Financial Service Provider license, granted by the New Zealand Financial Services Authority. Licensed companies can then provide financial services from a trusted jurisdiction with excellent regulatory oversight;
- Fortunately, New Zealand is not blacklisted by any jurisdiction or authority in the world and has no connotations as a tax neutral jurisdiction. New Zealand is a fully committed member of the OECD, FATF and World Trade Organization.
- New Zealand is the best jurisdiction in the world to set up a financial services company because:
- Within 8 months, Healy Consultants can register a financial services company in New Zealand for our Client with limited regulatory oversight. Financial entities include banks, hedge funds, asset management;
- New Zealand is a reputable financial center, neither considered an offshore tax neutral financial center nor blacklisted by any Government in the world.
- Obtaining a financial service provider license in New Zealand is i) much easier and ii) much cheaper than London, New York, Japan, Australia, Singapore and Hong Kong;
- New Zealand is an attractive place for the formation of a foreign trust because:
- The country has an impecable reputation for its AML/CFT regulations and is stable politically;
- Foreign trusts are legally exempt from all taxes in New Zealand as long as their income is retained by the trust. Once distributed, income sourced from outside New Zealand can also be exempt from income tax and withholding tax if i) the beneficiaries are residing abroad and ii) the income is categorized as passive income (click link for further details);
- There is no public registrar of trusts in New Zealand, hence guaranteeing the confidentiality of our Clients.
- New Zealand companies are amazingly attractive vehicles for our international Clients’ to conduct their global business, including:
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