How to Choose a New Zealand Company Agent

This guide is aimed at anyone seeking to incorporate a New Zealand company, and provides vital initial advice for choosing an agent to assist you with New Zealand business.

The modern business world is made up of a network of companies, tax agents, consultants, and entrepreneurs, who are all operating on an international market. The modern business person has at their disposal a wide range of specialists to help them establish and run a business in almost any jurisdiction cross the globe. However, the contemporary necessity for interdependence brings up the old adage “a chain is only as strong as its weakest link”, meaning that great care should be taken when selecting partnering specialists when forming a business in another country.

Arguably, when establishing a New Zealand business, one of the most important initial steps is to partner with a reliable local agent who will take care of forming the company and ensuring its smooth passage into operation. The New Zealand expert should also have relevant business expertise to guide your company through national legislation and advise you on compliance, reporting, and the local economy. However, finding a suitable agent in the country is a catch-22 within itself, as local knowledge is needed to find a good agent, but a good agent is needed to provide local knowledge.

Recent events that were highlighted in the news have demonstrated the importance of finding a reliable and compliant partner to assist in establishing a New Zealand company. In the last few months, a small number of “company registrators” have been investigated by the New Zealand Companies Office, the New Zealand IRD, and other government bodies, and subsequently closed down due to issues of serious misconduct.  These service providers were found to be operating without full compliance to New Zealand regulations, and offering “offshore mechanisms”. The behavior of the incorporators has been dealt with by New Zealand tax authorities, and, in many instances, the companies registered by the agents have been struck off the company register.

New Zealand has been repeatedly praised by the World Bank as the country with the easiest rules in the world for establishing company.  It is important to note that New Zealand legislation does not define or regulate the role of the company agent or company secretary, and anyone can incorporate a New Zealand business entity by applying to the Companies Office. However, in order to optimize the process, avoid common pitfalls, and avoid the potentially negative effects of misconduct by self-proclaimed “company registrators”, it is important to ensure that you seek advice and from a local specialist who acts in your New Zealand company’s best professional interests, such as a lawyer or accountant.

A key requirement for all New Zealand companies is to have a local Registered Office, and most “company registrators” are happy to provide such services for a substantial fee. However, the owner of a New Zealand company must understand that there are strict requirements regarding documents that are to be kept at this address, and quite often “company registrators” do not keep any of the statutory documents of their clients’ companies. The Company Act 1993 requires that a company must keep the following documents at its Registered Office:

  • the constitution of the company
  • minutes of all meetings and resolutions of shareholders within the last 7 years
  • an interests register
  • minutes of all meetings and resolutions of directors and directors’ committees within the last 7 years
  • certificates given by directors under this Act within the last 7 years
  • the full names and addresses of the current directors
  • copies of all written communications to all shareholders or all holders of the same class of shares during the last 7 years, including annual reports made
  • copies of all financial statements and group financial statements required  for the last 7 completed accounting periods of the company
  • the accounting records for the current accounting period and for the last 7 completed accounting periods of the company
  • the share register

It is vital to note that all such documents must be made ready for inspection by New Zealand authorities, for any legitimate request, which, in fact, means that a physical person must be able to represent the client’s company from the registered address. In normal New Zealand business practice, such services are typically provided by accountants, tax agents, or lawyers. It is exactly for this reason that the Registered Address of your company must be at the office of a qualified professional who has the ability and authority to represent your company and its interest in front of the New Zealand tax authorities.

The person representing your company in New Zealand must also keep accounting records in the Registered Office, and the documentation must be in compliance with the Financial Reporting Act 1993. The accounting records must be in writing, and in English, and contain:

  • entries of money received and spent each day and the matters to which it relates
  • record of the assets and liabilities of the company
  • if the company’s business involves dealing in goods a record of goods bought and  sold,  a record of stock held at the end of the financial year
  • if the company’s business involves providing services, a record of services provided and relevant invoices

As we have already said, it is rather easy to incorporate a company in New Zealand, and the record keeping rules are simple and straight forward. At the same time, a New Zealand company is a reputable business entity, with several unique economic, financial and taxation advantages, which make them exceptional international business structures. However, care must be exercised to ensure that your New Zealand corporate agent is able to ensure full compliance for your company with New Zealand laws and regulations.

We offer a full range of accounting and taxation services for international clients doing business in New Zealand, or operating a New Zealand business entity on the international market. Please feel free to contact us for any further information you require.

June 7th, 2011