New Zealand is aiming for the top

Through a government programme spanning several years, by 2013, New Zealand has managed to now be considered the third best business environment in the world. The purpose of the changes is to go beyond the usual tourists and also attract businessmen to the country, which is located so far from everything.

One of the final, but important steps in the business development programme was the introduction of the so-called Look-Through Company (LTC) form of taxation. This form of company is actually a limited liability company, however, it is entitled to a special taxation status. There is a company tax of 28% in New Zealand, but companies which choose LTC taxation are not considered to be taxable entities and therefore company tax does not have to be paid on the profits. The essence of the method is that the company is considered to be “transparent” from a taxation point of view and only the shareholders have an obligation to pay taxes on the profit of the company, i.e. taxes on profit only have to be paid at the level of the owners. If shareholders are not New Zealand residents, taxes do not have to be paid on the profit of the company at the level of the owners either (supposing that the profit does not come from New Zealand).

A maximum of five private persons can be shareholders in a LTC. A further requirement for shareholders is that all of them should have equal rights, for example, no dividend preference shares or voting preferred stocks can be issued which provide certain shareholders with privileges. There is no minimum registered capital for the company, furthermore shareholders do not have to pay in funds to the company bank account.

The so-called “Limited Partnership” (LP), which provides the same tax benefits as the LTC, is another popular corporate form. The LP is similar to the so-called “betéti társaság” in Hungary as there needs to be at least one member who has unlimited liability for the debts of the company, and usually this member is also the representative of the company. The number of members is not specified, and another firm can also become a member in the company.

Due to the tax-free status, both company forms are chosen more frequently in international commerce, but many examples can also be found among companies with investment and holding activities.

In the case of both company forms, it is necessary for the company to make a report after the end of the financial year, which is 31 March, but, basically, this report does not have to be submitted to any official organisation as it is sufficient to keep it at the seat of the company.

The New Zealand dollar is among the most well-known currencies nowadays, and also the country also has a developed banking system (although certain Internet services are only available with the local currency). ANZ, Westpac, and HSBC are the three most prominent players in the banking sector.

As a result of the above measures, it seems that, beside the wine and wool industries, New Zealand also enjoys increasing popularity among foreign investors due to its business and financial services. The international recognition of the country is enhanced by the fact that it is an active member of most world organisations and economic associations.