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DOING BUSINESS IN NZ: Starting up a business

01 June 2015

Download:2015 PUB Doing Business in New Zealand.pdf

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Corporate structure options

Four main avenues are open to overseas entities wishing to set up a business in New Zealand.  They are to:
  • trade directly, registering as an overseas company (i.e. as a branch)
  • form a subsidiary company
  • merge with or take over an existing New Zealand company, or
  • enter a limited partnership.

If entering into business with a third party, the usual structures of joint ventures (both incorporated and unincorporated), partnerships and limited partnerships are all available.

Registering a branch

An overseas company wishing to register a branch in New Zealand must reserve its name (the same name as it has registered in its home jurisdiction) with the Registrar of Companies, and apply for registration.

The registration application must be filed within 10 working days from the start of business in New Zealand and must include:

  • the date business commenced or will commence in New Zealand
  • the names and current residential addresses of the directors of the overseas company
  • the address of the overseas company’s principal place of business in New Zealand
  • the name and physical address of at least one person in New Zealand who is authorised to accept service of documents on the overseas company’s behalf, and
  • evidence of the overseas company’s incorporation and a copy of the instrument constituting or defining its constitution (either in English or a certified English translation).

Australian companies wishing to register a branch in New Zealand benefit from an information sharing arrangement between the Companies Office and ASIC, which reduces the amount of information that needs to be provided in the application.  Australian companies provide their Australian company number and all of the information listed above except directors’ details, evidence of incorporation and a copy of the constitution (which the Companies Office receives direct from ASIC.  Australian overseas companies also benefit from reduced compliance requirements.  For example, they need only file a simplified annual return, with ASIC supplying the Companies Office on request with the relevant information filed by the company in Australia. 

Forming and registering a subsidiary company

A subsidiary company incorporated in New Zealand must (for companies incorporated from 1 May 2015) have at least one director resident in New Zealand, or who is resident in Australia and is a director of an ASIC registered company.  Existing companies must have appointed a director who meets these requirements by 28 October 2015.  Non-resident shareholders and directors are otherwise permitted.  Generally, any legal entity may be a shareholder. Only individuals may be appointed directors.  There is no statutory requirement to appoint a company secretary. 

There is no restriction on the size of a company’s share capital.  Companies (other than cooperatives) are not permitted to have a par or nominal value attached to their shares. It is not necessary for the issue price to be fully paid, although shareholders are liable to creditors (and liquidators) to the extent of any amounts unpaid on their shares. 

As with a branch, the first step to register a subsidiary is to apply to reserve the proposed subsidiary’s name.  Once the name has been approved and reserved with the Registrar, the following incorporation documents must be filed:

  • a signed director consent form for each director, setting out full name and residential address (which will be publicly available) including a certificate that he or she is not disqualified from acting as a director.  Directors also need to supply their place and date of birth (which will not be publicly available). 
  • a signed consent form for each shareholder
  • a copy of the constitution, if the company is to have one, and
  • details of the ultimate holding company.

Applications to the Registrar must also include:

  • the name and residential address of each director
  • the names and addresses of each shareholder, and the number of shares to be issued respectively to them, and
  • details of the registered office and the address for service of documents, both of which must be physical addresses in New Zealand.

A branch or a subsidiary?

The decision whether to establish a branch office or a subsidiary company will be influenced by legal, tax and commercial considerations.  The following issues may be relevant.


A New Zealand branch (being legally the overseas company), bears directly any liabilities that it may incur under New Zealand law.  There is no sheltering of liability behind a different legal persona for the overseas parent.  Establishing a special purpose (overseas) subsidiary to be the branch in New Zealand may help ring-fence this liability.  In practice, however, unless the subsidiary is of substance in its own right, any significant commercial dealings may need to be guaranteed by the overseas parent.       


A New Zealand branch of an overseas company will generally be considered non-resident for taxation purposes.  The overseas company will be required to account for New Zealand tax on the portion of the non-resident entity’s taxable income attributable to the New Zealand branch.  Losses of a branch may be able to be claimed in the home jurisdiction of the head office.  If an overseas company incorporates a subsidiary in New Zealand, that subsidiary is a New Zealand tax resident.  The subsidiary will be subject to New Zealand tax on the subsidiary’s worldwide income.  The subsidiary’s losses cannot be offset against any income of the parent and usually cannot be taken into account in determining the parent’s tax liability in its home jurisdiction.  Please refer to the Taxation chapter for more information on the New Zealand tax environment. 

Merger or takeover proposal?

A company considering merging with or buying a New Zealand company must be aware of the restrictions on business acquisitions contained in the Commerce Act 1986.  Please refer to the Regulations affecting business chapter for an outline of the key restrictions. 

If the New Zealand company is listed on the New Zealand stock exchange or, if not listed, has more than 50 shareholders, and/or share parcels, the Takeovers Code is likely to apply.  Specific advice on the implications of the Takeovers Code should be sought. 

Forming a limited partnership

From an investor’s perspective, a limited partnership provides the limited liability protection of a company and some of the flow through tax and confidentiality advantages of a partnership.  The New Zealand limited partnership model is broadly comparable to limited partnerships in other jurisdictions, including Delaware, Australia and the Channel Islands.  The following issues may be relevant in deciding whether to establish a limited partnership.


Although the identity of the limited partners must be registered with the Registrar, that information is not publicly disclosed.  Every limited partnership must have a limited partnership agreement.  Unlike a company’s constitution, however, this agreement is not registered with the Registrar and is not a matter of public record. 


Like a company, a limited partnership is a separate legal entity from its investors; this separation helps to protect those investors from losses and claims arising from the business activities of the limited partnership.  Limited partners are passive investors and their liability is typically limited to the capital they agree to contribute, provided they do not take part in the management of the limited partnership.  The general partner manages the business and is responsible for the debts and obligations of the limited partnership if the limited partnership itself cannot meet them.  A general partner may be a company. 


Limited partnerships are treated as fiscally transparent for New Zealand tax purposes, notwithstanding their separate legal identity.  The limited partners are treated as holding the assets of the limited partnership, and personally derive the income and deductions.  This presents a number of tax advantages, such as the ability to distribute capital gains tax free to the limited partners and the pass through of tax losses (although the losses claimable by a limited partner are effectively capped at the amount of that limited partner’s economic exposure to those losses). 


There is no restriction on the business activities of a limited partnership.  Although a limited partnership is a creation of statute, in comparison with a company, the limited partnership is much less regulated.

We make every effort to ensure the accuracy of the information provided but it should not be relied upon as a basis for making business decisions as circumstances, business conditions, government policy and interpretation of the law may change.