What is Company Registration in New Zealand?
If you are deciding to start your business in New Zealand this is going to be a very intelligent decision. New Zealand welcomes business and investor migrants and has taken numerous steps to make immigration easier for investors and experienced business people. New Zealand has a very strong economy and regulatory environment is very light handed. The World Bank has described New Zealand as “the easiest place on Earth to do business”.
New Zealand is a great place to start your business. The diverse geography of New Zealand and its varied culture make for a vibrant and dynamic place to do business here.
The modern and competitive economy of New Zealand benefits from a strong commitment to open-market policies. This facilitates vibrant flows of trade and investment. Transparent and efficient regulations are applied evenly in almost all cases, encouraging dynamic entrepreneurial activities in the private sector. Financial markets of New Zealand, although relatively small, provide adequate access to financial resources.
Out of 175 countries surveyed in Transparency International’s 2014 Corruption, Perceptions Index, New Zealand was ranked second. The country has been renowned for its efforts to penalize bribery and ensure a transparency, competitiveness, and corruption-free government procurement system.
New Zealand provides great flexibility under licensing and other regulatory frameworks Start-up companies. There is no minimum capital required to start a business in New Zealand. It takes only one day to start a business here. Labor laws and regulations of New Zealand are very flexible, which facilitates a dynamic labor market, increasing overall productivity. New Zealand has the lowest subsidies among Organization for Economic Co-operation and Development (OECD) countries. All subsidies on the farm have been removed almost three decades ago, spurring development of a vibrant and diversified agriculture sector.
Business Structures of company registration in New Zeeland?
Foreign Investors generally chooses one of these three structures - Sole trader, Partnership, or Limited Liability to start their business in New Zealand.
1. Sole Trader registration in New Zeeland
The business of a sole trader is operated by himself on his own. The business is completely controlled, managed and owned by the trader and he is only entitled to all profits. However, he can employ as many people as he wants. The trader is personally liable for all business debts, liabilities, and taxes. To establish a sole trader business requires, no paperwork. Numerous entrepreneurs in New Zealand start their businesses as sole traders and then move to a limited liability company structure as the business grows. However, to take advantage of the protection and other benefits many entrepreneurs choose to start as companies.
2. Partnership registration in New Zeeland
To start a business as a professional or as a forming industry to set up a Partnership is the most common. Partnerships can be effective by the way that you and at least one another person share ownership of a business, its resources, and each other's skills.The partnership itself is not required to pay income tax in its own name. Instead, the income of the partnership is distributed to the partners and partnership is not liable to pay taxes. The partners are personally liable to pay tax on their own share.
Partnerships in New Zealand are established with a formal partnership agreement. The partnership agreement must be drafted carefully to cover all contingencies and possible conflicts that might arise in the course of business. There is no requirement of registration to start a partnership.
3. Limited Liability Company registration in New Zeeland
A limited liability company is a formal and a separate legal entity in its own right and separate from its shareholders or owners. Shareholders' liability for any liability to the company is limited only to the extent of their share of ownership in the company. However, this clause is not applicable when directors of the company have given personal guarantees for company’s debts, where a company has been trading while insolvent or is considered to be ‘trading recklessly’.
The limited liability company is the most successful business structure in New Zealand. It gives a clearer picture to the customers, investors and other stakeholders of who and what they are dealing with and fosters confidence in the business by governing the relationships between investors/shareholders, directors and creditors. The company in New Zeland can be registered (incorporated) online through the Companies Office.
Company registration procedure in New Zeeland?
The first thing you need to do is file an application for reservation of the proposed name of the proposed company. To reserve the name of the company online, you can visit the New Zealand Companies Office Web site (www.companies.govt.nz).The name proposed must be unique and can be reserved only for a period of 20 working days with the Companies Office.
The minimum requirement to incorporate a company in New Zealand:
- One shareholder,
- One director,
- One share
- A name reserved with registrar of Companies
- Registered office, and
- An address for service.
You are required applying for company registration by filing a form with complete detail of the company and paying the registration fee online. After verification, the Companies Office will process the application. Once the application is processed, the founder(s) of the company will receive a notification by email along with an appropriate director and shareholder consent forms, which are generated by the Companies Office. After receiving the application the applicant is required to fax the signed director and shareholder consent forms within 20 working days to the Companies Office, after which the application will expire. The certificate of incorporation is issued via email in just a few minutes when the last consent form is accepted by the Companies Office.
While incorporating the company online with the New Zealand Companies Office the promoters can apply online for a company Inland Revenue Department (IRD) number and also register for the GST (Good and Service Tax) at the same time. Following information are needed when applying for a company IRD number and registering for GST:
- Contact details
- The date from which the company will begin employing
- The number of employees and contractors (including the number of employees that will have a student loan)
- The IRD number of each Director and all individual shareholders who are residents of New Zealand. Their main business activity, the trading name of the company, place of business and postal address, a Business Industry Description and Code, Company Contact details, and whether or not the Fringe Benefits Tax for employees is applicable.
- GST number – GST accounting method, business activity code, frequency of filing returns, details of how you would like refunds to be paid, whether or not the company will be making tax-exempt supplies, ACC uses the business activity code to calculate levies for personal injury cover and residual claims and whether or not the company will be making imports/exports.
It is mandatory to file the documents for company registration with the Companies Office online since July 1st, 2008. Since November 2014, the applicants have the ability to pay the prescribed incorporation fees using internet banking.