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Company Formation in New Zealand

There is just one process to company registration in New Zealand. This is to apply for registration with the Companies Office - this is done online. The process takes one day and costs approximately $200.

You have the choice of a few business structures in New Zealand. They are, essentially, similar to those you find here in the UK. The most favoured are:

Limited Liability Company

Probably the easiest to use when opening a branch office or subsidiary. A company is recognised as a separate legal entity from its owners, and thus warrants them limited liability to the extent of their financial involvement.

Limited Attribution Companies

LACs can be listed or unlisted public businesses. A listed entity will obviously trade through the national stock exchange of the New Zealand. It must have:

• At least three directors
• At least two directors that reside in the country
• At least one shareholder

It is optional to offer shares to the public, but must comply to the Companies Act before allocating them. There is no restriction placed on the transfer of shares, either.

Registration is relatively simple, and must be done with the Registrar of Companies. The company must also adhere to the suffix 'Ltd' to prove its legal status.

Sole Traders

Sole Trading is the easiest and most economically viable form of setting up as a foreigner. The owner is, as implied, the sole proprietor, and holds complete control over the company. The company also enjoys less regulation, and profits are at the discretion of the owner.

When it comes to tax, Sole Traders are treated as individuals, and can also choose between trading under their own name or that of a business.

Registration is relatively simple, and must be done with the Registrar of Companies.

Offshore Companies

By choosing to incorporate an offshore company, business owners and investors can set-up a business outside the jurisdiction of its operations. Offshore companies are traditionally, but not exclusively, incorporated for lower fees and taxes. Business owners must abide the regulations of the offshore jurisdiction, and must not trade within the jurisdiction.

The benefits are vast. As aforesaid, reduced tax and fees are often big factors when considering offshore incorporation. A company may also choose and offshore location to:

• Simplify set-up and maintenance - entrepreneurs may find bureaucracy and red tape less of an obstacle in offshore jurisdictions
  
• Assume anonymity - the names of owners and directors are not for public record, and references to the company may only be made in its registered agent
  
• Ensure legal protection - for instance, some jurisdictions favour corporate governance, meaning a company is only liable to offshore laws as opposed to those in its areas of operation
  
• Protect assets - business owners may opt to arrange their assets and transactions in such a way that protects them from liability
  

Characteristics of an offshore company:

• Memorandum and Articles of Association
  
• Certificate of Incorporation
  
• Registered Office/Agent
  
• Shareholders / Members
  
• Directors / Managers
  
• Company secretary
  
• Statutory Register
  
• Bookkeeping
  

Traditional locations for offshore incorporation are tax havens, such as the British Virgin Islands, Panama and Monaco. Other favoured areas include India, the Bahamas, Dubai, the Cayman Islands, Cyprus, Seychelles, Marshall islands, Delaware, Turks & Caicos Islands, Hong Kong, Jersey, Guernsey and the Isle of Man.

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