How practical is starting a business in New Zealand? Is it going to be lucrative, giving you endless opportunities for growth and expansion? Will it give you a high return on your Investment? The answer is Yes.
New Zealand is a country that enjoys stable economic conditions for a long time! Since 2010, the country's economy has an average growth of 2.1%. In 2019, the GDP rate was 2.4%. Hence, New Zealand is indeed a place where you should invest. Apart from the stable economy, New Zealand has a highly regarded legal system. It offers stable, safe & reliable wealth protection. Above all that, New Zealand is the easiest country to start a business, according to the World Bank survey of 2015.
Before you start a company, you must consider what type of company you must start. Mainly, there are three types of New Zealand Companies:
All Companies must register in the Companies Office of New Zealand.
Limited Liability Company, LLC in New Zealand are the most common and successful business structure. New Zealand LLCs are similar to traditional LLC around the world and franchise in New Zealand. Limited Liability Companies are separate entities from their owners. This means owners are not held personally liable for company debts or liabilities. A shareholder's liability limits to:
These are the characteristics of a New Zealand Limited Liability company.
Company Director
The director of a company has many responsibilities. They manage the company's day-to-day businesses & can also be shareholders. Directors have to submit annual reports to the Companies office on behalf of the Company. It is a requirement to have at least one director who is a resident/citizen of New Zealand OR an Australian who is a director of an Australian company.
The disqualifications of being appointed as a director include & not limited to:
Shareholders
Every company must have at least one shareholder and one share. Shareholders are investors of the company and do not get involved in the company's day to day management and business affairs.
But they have voting rights in the company. Which means, they can make decisions about how to run the company, Including:
A company may issue shares to raise capital to enhance its functions.
A company is different from business structures such as sole proprietorship & partnerships. Here are some rules that a company must follow.
You must consider drafting a shareholder agreement for your private company. This provides guidance about the role of shareholders & directors of the company. This is most important if you have external shareholders.
New Zealand Companies Taxing
The Corporate Tax rate of 28% & GST of 15% applies to companies. LLC's are taxed on global income. But you don't have to register for the tax if your company does not trade in commercial or trading activities.
Accounting & Auditing
It is a must for New Zealand LLC to file & report annual financial documents or reports with the registrar of companies. Failure to do so will result in a fine of NZ$. 10,000. In these instances, you must file financial reports & documents. Those are:
The main reasons to open a co-operative can be:
Examples: taxi businesses, dairy companies or Maori community services & development.
All co-operative companies in New Zealand must have transacting shareholders. This means,
Co-operative companies too must register at the Companies house similar to other limited liability companies.
As the name suggests, shareholders of an unlimited company have unlimited liability. Which means, they have to pay off all debts that the company is unable to pay. Often, unlimited companies are formed to carry out foreign, legal requirements.
An important tip to our readers is, to seek legal advice before venturing into this business structure.
Frequently Asked Questions:
What are the government bodies involved in the registration of companies in New Zealand?
What is the cost to register New Zealand companies at the Companies office?
(Your request will be processed in 2 hours on weekdays) You must use the name to incorporate a company within 20 days.
Starting a Business in New Zealand is a smart move considering the benefits you can reap. The process of starting up New Zealand companies is relatively simple & hassle-free. If you want further details, you may visit the official website of New Zealand. Or if you want personalized attention you may contact one of our agents as well. We are consultants who are knowledgeable and hope to guide you the right way!
Related Article:
How to start a business in New Zealand
New Zealand Foreign Company Registration Process