Setting up a Business in New Zealand
Articles > Setting up a Business in New Zealand
Articles > Setting up a Business in New Zealand
According to the 2020 World Bank’s Ease of Doing Business Ranking, New Zealand is the easiest country in the world to start a new business. New Zealand has a modern, stable and sophisticated free market economy, which is the perfect breeding ground for a successful business. There are many growth areas in the economy, including wine, IT, tourism, biotechnology, film making, electronics and telecommunications, to name but a few. It’s interesting to note that 96% of businesses in New Zealand employ less than 20 people, showing that it’s a country that lets small business flourish.
Business Structures
Sole Trader
A sole trader is exactly what it says. One person operates the business and is entitled to the profits. He/she can employ staff but only the sole trader is liable for taxes and debts. In many cases, a sole trader business can be established without paperwork.
Partnership
Partnerships are mostly found in the farming industry and with professionals, such as doctors and lawyers etc. The business doesn’t pay tax, the partners in the business distribute the income and pay tax on that income. Partnerships are not as popular they used to be, as a company structure gives better protection.
Limited Liability
A limited company is a legal entity which is totally separate from its owners or shareholders. It limits any personal liability to the shareholding of each person. It also allows shareholders to invest in the business, thereby encouraging growth.
A company must have: –
You can register your company online with the Companies Office. It a quick and low-cost process which will require you to have a RealMe login.
RealMe
RealMe is a New Zealand government initiative which allows you to securely access multiple online services with just one username and password. In order to create a RealMe account, you need to register online. You’ll need your passport, birth or citizenship certificate or immigration document. You then visit a participating PostShop where you photograph is taken.
Tax
Depending on the type of business structure you’ve decided upon, you’ll need to register with IRD for income tax, GST or PAYE. If you have a company, you can register for tax at the same time you register your company.
Don’t forget to list tax deductible items such as office rent, internet, business lunches, travel and many more. Your accountant will give you advice on these matters.
New Zealand Business Number
Every company, whether self-employed, a sole trader, a partnership or a limited company can register online for a New Zealand Business Number (NZBN). Companies automatically receive their NZBN on registration. This number is your business’ unique identifier and is linked to all your contact details and trading name, making it easy for your contacts to get your information.
Regulations
Investigate which regulations apply to your business through central and local government avenues.