If you’re an expat living in New Zealand or planning a move to New Zealand you’ll be delighted to know that this is one of the easiest countries in the world to open a business in according to the World Bank Doing Business survey. There are very few restrictions on establishing, owning and operating a business in New Zealand and if you use the Government’s online portals, the process of reserving a name and incorporating your company can be completed in a couple of hours!
New Zealand’s business structures
Businesses in New Zealand generally fall into one of three structures – sole trader, partnership or limited liability:
- A Sole Trader operates a business on their own – they can employ people but the sole trader manages and owns the business, is entitled to all profits and is personally liable for all business taxes and debts. This is the easiest business to open in New Zealand as it can be established without any paperwork. Many businesses start as sole traders and then move onto a limited liability company structure once the business starts growing.
- Partnerships are often found in the farming industry in New Zealand and are a good way to share business operation costs. The partnership itself is not responsible for paying income tax. Instead the income from the partnership is distributed to the partners and then the partners pay tax on their own share. No registration is required to start a partnership and they are the automatic option for many professionals including lawyers, doctors, accountants and other professionals.
- In the limited liability structure a company is a formal, legal entity in its own right and separate from its shareholders and owners. As a share holder, your liability for losses is limited to your share of ownership of the company. This is not applicable to company directors who have given personal guarantees for company debts, where a company has been trading while insolvent or is considered to be trading recklessly.
The limited liability company is New Zealand’s most successful business structure and you can register (incorporate) a company online through the Companies Office. There is a small fee involved – currently NZ$150.
Check local authority rules
Before you open up your business and set up premises, check with your local council. Each territory authority has their own rules and regulations about what business activity is allowed. For example, it is unlikely that you can open a car repair business in a residential area.
Get your tax number
Depending on what business structure you have chosen, you will need either an individual tax number or a company tax number. For more information about this visit New Zealand’s Inland Revenue, which has lots of helpful information.
Check your business name
Before deciding on your business’s name and creating a logo and stationery, check the Companies Office and the Intellectual Property Office to ensure the name is not already registered.
Opening up a company bank account
Any bank in New Zealand will be happy to help you set up a bank account for business purposes and many will help you transfer funds from overseas to assist with setting up your company.
Maximise your business’s finances
If you are a South African living in New Zealand and would like to know more about how you can maximise your new business’s finances through financial emigration, accessing your South African retirement annuity and our tailor-made tax solutions for South Africans around the world, contact FinGlobal today.