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Changes to New Zealand Company requirements affect non-residents

Sunday 26 July 2015

All companies incorporated after 1 May 2015 must provide the following:

  1. The date and place of birth of all directors. (This information will not be publically available);
  2. Details of at least one director that either lives in New Zealand, or Australia and is a director of a company incorporated in Australia;
  3. Details of any ultimate holding company (if applicable).

The above ensures that any newly incorporated companies will have at least one director who lives in New Zealand or Australia. These changes are to reduce the likelihood of New Zealand companies being used by overseas persons for illegal activities.

A director of a company in New Zealand law has important duties and responsibilities and is personally liable for those. It is not advisable for anyone not involved with the company to be appointed just to meet the above requirements.

From 1 July 2015, all New Zealand companies filing annual returns are required to provide the date and place of birth of all directors and details of any ultimate holding company.

All New Zealand companies incorporated before 1 May 2015 have until 28 October 2015 to appoint at least one director living in New Zealand.

Some companies may be tempted to just provide a New Zealand address for their overseas directors to meet the above requirements. However, they should be aware of certain consequences. First, being a director of a company is likely to constitute working in New Zealand. If the person is stated to be here for more than 3 months in a year, Immigration NZ may consider that they should have some form of work visa. Second, stating that the director is living in New Zealand could have income tax consequences for the director.  For New Zealand income tax purposes, a person is deemed to be a New Zealand tax resident if the person has a permanent place of abode in New Zealand. It may be difficult for someone who is on public record stated as living in New Zealand to argue that they do not have a permanent place of abode in New Zealand. A New Zealand tax resident has to pay income tax to the New Zealand government on their worldwide income.

 

In summary, any company with overseas shareholders must consider the above carefully.

If you require legal advice, contact Teresa Chan at Teresa Chan Law Limited, Level 3, Westpac Building, 106 George Street, Dunedin 9016, ph. 477 1069, or email teresa@tchanlaw.co.nz  If you are a Mandarin speaker, please ring Xiaoyan Mu at (022) 694 9917.

                                                                                                   

Note: The information in this article is general only. You should seek advice for specific situations.

KEYWORDS: tax resident, address, company, director, illegal,
Dunedin Shanghai Association property law section ADLS