New Zealand

Description

In the framework of a multi-year-long government programme, New Zealand has been able to ensure that it is now considered to be the country providing one of the best business environments in the world. The changes were primarily due to the desire to ensure that, in addition to tourists, businessmen and enterprises interested in registering an offshore company can also turn their attention to this far off island.

The last but most important step in the business development programme was the introduction of the so-called Look Through Company (LTC) taxation form. This legal form involves a limited liability company, but is subject to special tax status. The corporate tax rate is 28% in New Zealand. However, a company which chooses LTC taxing does not qualify as a taxable entity, so it does not have to pay corporate tax on its profit. The essence of the method is that the company is considered to be “transparent” for taxation purposes, so any tax liability arises only for the income of the shareholders, that is, only the owners must pay income tax on the profit. If the shareholders are not residents of New Zealand, no tax should be paid locally by the owners on the profit of the business (provided that the profit does not come from New Zealand). An LTC may have no more than 5 private persons as shareholders. An additional requirement for the shareholders is that they should have the same rights; for instance, it is not possible to issue shares with either preference dividend or priority voting rights which provide advantages for particular shareholders. There is no minimum requirement for equity at the time of registering an offshore company; moreover, shareholders do not need to actually pay up any money to the company bank account.

Limited Partnership (LP) is another popular form of company, providing the same tax benefits as LTC. An LP is required to have at least one member who has unlimited liability for the debts of the company, and typically this member also acts as the representative of the company. There is no limit on the number of members and it is also possible for another company to join as a member.

Thanks to their offshore status, both forms are used increasingly often in international trading but there are also numerous examples of companies pursuing investment or holding activities. For both forms of company, the business is required to prepare its report after closing the business year but in the standard case, it does not need to submit it to any official body as it is sufficient if the company stores the report at its seat.

Regional features

  • Audit obligation: No
  • Continent: Oceania
  • Disclosure of beneficial owners: No
  • EU VAT ID available: No
  • Local manager required: Yes
  • Minimum paid-up capital: LTD – one share is mandatory, LP – two shares must be issued
  • Obligation to submit an annual report: No
  • Tax system: Territorial taxation