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New Zealand Private Limited Company
Company formation in New Zealand
Why Choose New Zealand?
New Zealand is well known to most readers and requires little introduction. It is a safe, stable and secure country which offers considerable benefits to those involved in international tax planning.
New Zealand lies in the South Pacific Ocean and consists of two large islands and a number of smaller islands. Granted autonomy in 1947, New Zealand has a progressive economy that is based largely upon banking and finance. It has undergone substantial structural reform since 1984 and as a result has experienced economic liberalisation. There have been several reforms, such as the removal of interest and exchange controls allowing the free flow of capital in and out of the country. The government has implemented various changes to encourage greater investment in New Zealand. With the overall tax incentives highlighting the positive attitude of the government to place New Zealand amongst the best international financial centres.
With the increased use of New Zealand as a trust domicile there has been a corresponding rise in interest in New Zealand companies. These Key Facts provide an overview of the New Zealand corporate regime, the tax treatment of New Zealand companies with non-resident Shareholders earning non-New Zealand source income, and our fees for providing a range of corporate services.
Company Formation & General Features
Formation of a company in New Zealand is straightforward and reflects the modern corporate code which New Zealand adopted in 1993. The salient features of the company law which will be of interest to clients include:
A company must have at least one Director and one share.
Directors have to be natural persons.
At least one of the Directors has to be resident in New Zealand.
There is no capital requirement although the shares are denominated according to a monetary value. The minimum value for a share is 1NZ$.
No need for a Constitution (Memorandum and Articles of Association) as the company is deemed to have all the powers of a natural person.
Shareholders may be corporate bodies or natural persons and may be either resident or non-resident.
The company needs to have a business or management service office in NZ.
If over 25% of the shares of the company are owned by a non-resident, audited annual accounts must be filed in the New Zealand Companies Office. This requirement does not apply where the shares are held by a New Zealand nominee which holds the shares on behalf of an overseas Shareholder.
A New Zealand company can be formed in 24 hours. The minimum information required to form a company is:
Proposed company name
Full name and residential address for the Directors
Full name and residential address for the Shareholders
Both members and directors need to file a Consent, and deliver certified copy of passport and original or certified copy of recent Utility Bill as proof of address; if these documents are not issued in the English language, certified translations are required.
Taxation Of New Zealand Companies
A company resident in New Zealand is assessable on worldwide income whether derived from New Zealand or elsewhere, subject to the provisions of the Income Tax Act, 1994. A company not resident in New Zealand is liable only in respect of income derived from New Zealand.
A company is resident in New Zealand if any one of the following four tests are satisfied:
It is incorporated in New Zealand.
Its Directors exercise control in New Zealand.
It has its centre of management in New Zealand – the place from where the company as a whole is managed on a regular basis.
It has its head office in New Zealand – the office from which the business of the company is directed and carried out.
All companies operating in New Zealand whether they are resident, non-resident or a branch of a non-resident company are taxed at the flat rate of 30% on their annual taxable profit.
An overseas company may commence business in New Zealand as a “branch operation” and will be taxed at the flat rate of 28%.
New Zealand’s network of tax treaties can be used in international tax planning.
New Zealand is unrivalled in its security, possessing both internal political and regional stability. In a troubled world it does not present itself as a terrorist target.
Advantages For Using New Zealand
Able to provide an offshore type trust structure onshore
It is an English speaking country
It enjoys political and economic stability
It is an independent British Commonwealth country
The legal system is based on English common law
Its Trust Law is similar to that of other common law jurisdictions
The legal and banking profession is of a high standard
It has well developed communication, commercial and business infrastructure
New Zealand is a full member of the Organisation for Economic Co-operation and Development (O.E.C.D)
New Zealand is not perceived as a harmful tax jurisdiction by the O.E.C.D whilst providing many of the advantages of an offshore tax jurisdiction
New Zealand represents a fresh approach to offshore asset protection
New Zealand is a signatory to the 1922 Hague Convention and can thus provide documents under apostil seal
New Zealand Private Limited Company
Companies Act 1993
Limited by Shares
Company ending in:
Memorandum & Articles:
Time to Incorporate:
Common or Civil Law
New Zealand dollar - not specified
Bearer shares notallowed
Minimum number of shareholders:
Corporate Shareholders Allowed
Bearer Shares Allowed
Minimum number of Directors:
Corporate Directors Allowed
Personal, local or overseas
Personal, local or overseas
Nationality of Directors/Shareholders
At least one Resident Director
Annual Meetings Required
Company name, registrations, Directors & Members
Documents at Registered Office:
Annual Return filed. Company must maintain proper records.
Payment of Annual Government fee, Directors, Shareholders & changes
Where are meetings held:
Any exchange controls:
Double taxation treaties:
Comprehensive list of countries
Exchange of information:
Tax on profits, not normally capital gains, comprehensive legislation
Can be open worldwide
Companies Office provides internet access & registration
Company Statutory Information
The "Application for Name Approval" is filed with the Companies Office. Please note that if your initial choices are not acceptable by the Registrar of Companies there are further application and filing fees payable. When the name approval has been granted the applicant is given a name approval form that is valid for 20 working days. In the letter of name approval you are advised that you should be aware that the company's name application may infringe rights arising under the Trade Marks Act 1953 and the Fair Trading Act 1986. Please have a look and search the New Zealand Trademark Register at the Intellectual Property Office of New Zealand.
Every company must have a registered office in New Zealand, as well as an address for service, where legal documents can be delivered to the company. Both addresses must be notified to the Registrar on application for incorporation.
It has to be a physical New Zealand address, not a postal box or document exchange; normally it is the business address of our company. If a company wishes to change its registered office or the address for service, the change and the date upon which it is to take effect must be notified to the Registrar. This date must be at least five working days after the notice is registered. At the registered office, a company must keep the following documents:
Constitution of the company; Minutes of all meetings and resolutions of shareholders within the last 7 years; Share register and the register of Director's interests; Minutes of all meetings and resolutions of directors and directors committees within the last 7 years; Certificates given by directors under this act within the last 7 years; Full names and addresses of the current directors; Copies of all written communications to all shareholders during the last 7 years, including annual reports; From when the Company commences business copies of all financial statements and financial statements for the last 7 completed accounting periods of the company; Accounting records for the current accounting period and for the last 7 completed accounting periods of the company; The share register.
The share register, if undivided, is the company's principal register and must be kept at its registered office. If divided, the registers may be kept elsewhere.
We act as your registered office and address for service. That is particularly important for overseas owners, who could otherwise have trouble in registering in NZ. We can only act for you; if you keep in mind the requirements mentioned above and please keep in mind that we are not liable in any circumstances for any failure complying with those requirements.
Annual Returns Required
If more than 25% of the shares, or a majority of Directors are resident outside New Zealand then the company has to produce annual audited accounts that are filed with the company annual return – client's option and decision.
A Company that is formed and registered in New Zealand under the New Zealand Companies Act 1993 (NZ Company) as well as a body corporate that is incorporated and registered outside New Zealand but is carrying on business in New Zealand (Overseas Company) are required to file an "Annual Return" in a designated month and pay the required annual filing fee.
A Company is not required to file an Annual Return in the calendar year of its incorporation. Companies can apply to the Registrar to vary the month in which they file their Annual Return. A "Shuttle Annual Return" is sent by the Registrar to the company's address for communication, or its registered office one month before the return is due to be filed, or there is also the option to file the Annual Return on-line with the Companies Office.
The information within the shuttle Annual Return is obtained from the New Zealand Companies Office database. The process of requiring an Annual Return is an important way of verifying the information contained in this database. Where the information on a shuttle Annual Return needs to be updated, follow the instructions on the form. Date of Annual Return. The Annual Return is completed upon this date. It must be a day in the month the return is due. All information must be correct as at this date.
Details Of Person Filing The Annual Return
The details of the person who is filing the Annual Return with the Companies Office. This may be an individual or a firm.
If a director of the company has changed or if his/her name or address has changed and the Companies Office has not been advised, amend the details printed on the Annual Return and file a "Notice of Change of Director and Particulars of Directors" with the Annual Return. There is no filing fee payable, however a late filing fee will be payable if the notice is filed more than 20 working days after the change occurred. In the case of a resignation by death, the time for filing your notice of the change runs from the date of notification to the company of the death. If the change involves the appointment of a new director, the company must file that director's consent and a document certifying that he/she is not disqualified from being a director. If no change has occurred, but the pre-printed information does not reflect the last document filed with the Companies Office, amend the Annual Return.
Failure To File An Annual Return
Companies that fail to file their Annual Returns by the due date are required to pay a late filing penalty. The Registrar of Companies sends a letter to remind companies and directors of companies that their Annual Return is overdue. If no response to that reminder is received, it is presumed that the company has ceased to carry on business and action is commenced to remove the company from the register. It is important to maintain the addresses notified to the Registrar and file your Annual Return on time.
Address Of Registered Office
A "Notice of Change of Registered Office" must be filed with the Companies Office at least five working days before the date the change can take effect. Complete and file this form with the Annual Return. If the company does not intend to change its registered office, but the printed information does not reflect the last "Notice of Change of Registered Office" filed with the Companies Office, legibly amend the Annual Return.
Address For Service
A "Notice of Change of Address for Service" must be filed with the Companies Office at least five working days before the date the change can take effect. Complete it and file it with the Annual Return. If the company does not intend to change its address for service, but the printed information does not reflect the latest address for service document filed with the Companies Office, legibly amend the Annual Return.
Address Of Divided Share Register Or Records
If the company has divided its share register and/or moved any of its statutory records to a place other than its registered office, it must notify the Registrar of the place where the records are kept. As there is no prescribed form for this notice, you can amend the Annual Return to show the new details.
All companies must complete this table by providing the requested information as at the date of the Annual Return.
If the company has created a charge of a type that requires registration under the Companies (Registration of Charges) Act 1993, but the charge has not been registered at the Companies Office, the company should seek legal advice. If a registered charge has been satisfied, the company should obtain a memorandum of satisfaction from the lender and file that with the Companies Office. There is no prescribed form for the memorandum. Do not amend the Annual Return and do not delay filing it with the Companies Office. If no change has occurred, but the printed information does not reflect the company's documentation filed with the Companies Office, amend the Annual Return.
Financial Report Act 1993
Circle the appropriate boxes for Companies Office records.
A director or an authorised person must sign the Annual Return. The signatories must provide their names under their signatures. The people signing certify that the particulars contained in the Annual Return are true and correct.
Although it is possible to register an unlimited liability company, companies are usually either limited liability companies or companies limited by guarantee. A public company must have a minimum of seven members but has no maximum. In comparison, the minimum in the case of a private company is two and the maximum is 25.
A private company may have one or more directors. If such a company has only one director, that director cannot also be the secretary. As indicated, a private company cannot have un-issued shares and, in the case of a foreign controlled company, must complete and file audited accounts annually. Both a public and a private company can be incorporated either with all the rights, powers and privileges of a natural person or with limited objectives.
A private company may, by way of a resolution passed by means of an entry in its minute book signed in accordance with the Companies Act requirements, do everything that is required to be done by a public company by way of shareholders resolution at a meeting. This convenient facility avoids the necessity for annual and extraordinary general meetings of private companies.
Generally, foreign equity ownership is not restricted and joint venturing with local New Zealand companies is not required. Participation in the news media is one of the few notable prohibitions on foreign ownership.