New Zealand is one of those jurisdictions one can use to minimize the tax burden on a transaction or business. One of the major advantages of using a New Zealand company is that it is a member of the Organization for Economic Co-operation and Development (O.E.C.D) and therefore is not considered as a harmful tax jurisdiction. Additionally, New Zealand has a wide network of tax treaties which makes this jurisdiction a suitable one for tax planning purposes.
The most common features of a New Zealand company are:
– Possible to register unlimited liability companies, however, companies are usually either limited liability companies or companies limited by guarantee.
– If properly structured, a New Zealand resident company can operate as a tax-free offshore company.
– Simple and fast incorporation procedure.
– Every company must have a registered office in New Zealand, as well as an address for service. Usually, it is the business address of a registered agent.
– The minimum number of shareholders is one and corporate shareholders are allowed.
– The minimum number of Directors is one; corporate directors are not allowed. If a company has only one director, he cannot also be the secretary. Both directors and shareholders may be of any nationality. If more than 25% of the shares or a majority of Directors reside outside New Zealand the company has to file annual financial accounts.
– A private company cannot have unissued shares. Bearer shares are not allowed.
– Every company should hold an annual meeting of shareholders once every calendar year. Annual meetings may be held anywhere. A Company can obviate holding an annual general meeting if all matters specified in the Companies Act 1993 are done by way of a resolution in writing.
– A company pays tax at 33% on any profit. If the company tax paid profit is later distributed to shareholders as dividends, the individual shareholders receive a credit in their tax returns for the tax the company has already paid. Thus there is no double taxation.
– A New Zealand company is taxable on its worldwide income.
– New Zealand has double tax treaties with 30 countries, therefore New Zealand companies may take advantage of the low rates of nonresident withholding taxes deducted by the source country on interest, royalties, and dividends ranging generally from 10-15%.