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Doing business in New Zealand - a guide

CONTENTS:
  • Who is an overseas person?
  • When will consent be required?
  • Overseas investment in "Sensitive" or "Special" land
  • Overseas investment in significant business assets
  • Overseas investment in farm land
  • The consent process
  • Monitoring of conditions of consent
  • Structuring your business
  • Limited liability companies
  • Partnership
  • Limited partnerships
  • Overseas Companies under the Companies Act 1993
  • Overseas Companies under the Financial Reporting Act 1993
  • Title
  • Contracts for sale and purchase of land
  • Resource Management Act and District Plans
  • Building Works
  • Popularity of Trusts in New Zealand
  • Trust Law in New Zealand: Legislation and Case Law
  • The Advantages of a New Zealand Foreign Trust
  • Taxation
  • Do I require a permit to visit New Zealand?
  • Do I need a permit to run my business in New Zealand?
  • What are the requirements of applying for LTBV?
  • What is the duration of my LTBV if I am successful in my application?
  • Can my family be included in this application?
  • Can I apply for New Zealand residence through my LTBV?
  • Can I bring my employees from overseas to work in my New Zealand business?
  • What about other employees I want to bring to New Zealand?
IMPORTANT NOTE: INFORMATION IN THIS SUMMARY, INCLUDING LEGAL INFORMATION IS
CURRENT AS AT 1 JUNE 2012
1.
McVeagh Fleming in the World/Introduction As well as being a premier law firm with two offices in New Zealand's largest city, Auckland, McVeagh Fleming is the New Zealand member law firm of the Ally Law legal network. Ally Law has excellent international coverage and enables member firms to provide cross-border advice utilising the expertise and contacts of Ally Law members and colleagues around the world. "Trans-Tasman" commercial activities between Australia and New Zealand are extremely common and our Australian Ally Law colleagues ensure that we have excellent coverage where transactions span New Zealand and Australia.
As a law firm, McVeagh Fleming has prepared this guide to provide you with a general overview of legal requirements and issues in respect of doing business in New Zealand. This is an overview only, and is not an exhaustive guide nor is it intended to provide full legal advice. You will require specific legal advice in respect of the particular type of business or investment you wish to undertake and we can assist you more specifically as a client of this firm when we get to know you and your particular, specific business needs. In respect of the types of business and investment opportunities that are available in New Zealand, the New Zealand Trade and Enterprise website (a New Zealand Government hosted site) provides an excellent initial resource and can be found at www.nzte.govt.nz
2.
Overseas Investment in New Zealand Foreign investment by "overseas persons" in New Zealand businesses and land is encouraged by the New Zealand Government. In most cases there is little, if any restriction on such investment although you need to ensure that any acquisition is structured appropriately, which we can advise you on fully. In some cases when an "overseas person" invests in New Zealand, the consent of the Overseas Investment Office ("OIO") will be required pursuant to the Overseas Investment Act 2005. If you are an overseas person seeking to invest in New Zealand, you should seek advice from a professional before signing up the investment. This is because you don't want to find yourself committed to the purchase of an asset without having obtained the appropriate consents. The following is a brief explanation of New Zealand's overseas investment regime. Who is an overseas person? An overseas person is anyone who is not a New Zealand citizen, nor "ordinarily resident" in New Zealand. For the purposes of the Overseas Investment Act, virtually all types of body corporate (whether incorporated or unincorporated) including all manner of joint ventures, trusts or partnerships are also likely to be an "overseas person" where an overseas person or persons have 25% or more ownership or control of that entity. A person is "ordinarily resident" if they are entitled to reside in New Zealand indefinitely and are either domiciled or residing in New Zealand with the intention of residing here indefinitely and have done so for the last twelve months. When will consent be required? Whether consent is required depends on whether an "overseas person" has acquired 25% or more direct or indirect ownership and/or control of interest in:
  1. "Sensitive" or "special" New Zealand land.
  2. Limited liability companies
  3. Farm land.
  4. Fishing quota.
We have provided some examples of what type of investment may be subject to the Overseas Investment Act 2005 in this guide, but this is not an exhaustive guide and specific legal advice should be sought and due diligence conducted on any investment an overseas person intends to make in New Zealand – and you should also take advice on how you will most efficiently structure such an acquisition. Overseas investment in "Sensitive" or "Special" land In general an overseas person must obtain consent to acquire an interest in land if the land is "sensitive" (as defined in the Overseas Investment Act) and if the interest is for a term of three years or more. Examples of "sensitive" land includes, but is not limited to:
  1. Non-urban land over five hectares;
  2. The foreshore or seabed or land adjoining the foreshore or seabed and which is over 0.2 hectares;
  3. Land on particular islands;
  4. Certain land over 0.4 hectares such as the bed of a lake, a historic place or whai tapu (land that has special significance to Maori).
Land will also be considered sensitive if it adjoins "sensitive land". "Special" land is defined in the Overseas Investment Act 2005 as the foreshore, seabed, riverbed or lake bed. If it is proposed to acquire sensitive land under the Act and that sensitive land includes any special land, the special land must first be offered to the New Zealand Crown by the vendor or registered proprietor of the land. Generally, the Crown will only acquire such land where there is a public interest in the Crown obtaining ownership. The above are examples only and an overseas person should take legal advice before entering into any legally binding obligations to purchase land in New Zealand. Overseas investment in significant business assets Business asset acquisitions by "overseas persons" require consent where:
  1. The total expenditure involved in establishing a new business exceeds $100 million, or
  2. The price paid when buying an existing asset or business acquisition exceeds $100 million, or
  3. Either the amount paid for the shares, or the gross value of the assets of the company of which shares are being acquired, exceeds $100 million.
There are a number of exemptions to the requirement to obtain consent that are contained in the Overseas Investment Regulations 2005. For example, where your spouse or partner is a New Zealand citizen and the property being purchased will be relationship property. We are familiar with the exemptions and can assist you in determining whether you would be exempt. Overseas investment in farm land Where farm land is involved, the land must first have been offered by the vendor on the open market to non-overseas persons in accordance with certain procedures. Exemptions from this requirement can be obtained but are subject to the discretion of the relevant government department. The consent process Applications for consent are determined in accordance with specific criteria set out in the relevant legislation. Broadly, applicants must:
  1. Be of good character.
  2. Have relevant business experience or acumen.
  3. Be able to demonstrate a financial commitment to their investment.
Applications for overseas investment in sensitive land must show that the applicant does reside or intends to reside in New Zealand permanently or that the overseas investment is likely to benefit New Zealand substantially. Where the applicant intends to reside in New Zealand indefinitely, they must set out their plan to become a permanent resident and take appropriate action in respect of such residency within a reasonable timeframe. The OIO may impose a time limit within which the applicant must become permanently resident. As a general rule, the Government's approach is that the overseas person must be resident in New Zealand within five years of the date of application. Likewise, where the applicant is seeking to prove that the overseas investment is likely to benefit New Zealand substantially, a business plan must be submitted with the application to address the relevant required benefits. The OIO assesses consent applications in accordance with the Overseas Investment Act 1995 and aims to make a decision within fifty working days from the date of registration. This timeframe is not however guaranteed and is based on the OIO receiving a high quality and well prepared application. All agreements relating to overseas investment should be subject to OIO consent and the timeframe for obtaining consent should be factored into the agreement. We are happy to provide you with the relevant form of agreement required or review an agreement prior to signing should you require our assistance. Monitoring of conditions of consent Consent is usually subject to various conditions with which the applicant must comply. Compliance is monitored by the OIO but such monitoring generally does not exceed five years.
3.
Setting Up and Running a Business in New Zealand Structure If you intend to run a business in New Zealand, arriving at the most efficient structure of that business is a matter that needs to be determined appropriately at the outset. As well as obtaining appropriate legal advice, it is extremely important to engage a suitably qualified New Zealand accounting professional to assist advise on New Zealand business accounting requirements and taxation compliance. Overseas persons trading in New Zealand wish to ensure that appropriate taxation is paid and not inadvertently create issues of double taxation or inappropriate accounting or record keeping. Your legal and accounting professionals can then give you full advice on the best business structure for you in New Zealand as well as how to appropriately keep records and account for that businesses financial activities. Limited liability companies One of the most common forms of business ownership in New Zealand is the limited liability company. In New Zealand the most relevant piece of legislation applying to companies is the Companies Act 1993 which governs the incorporation, management and liquidation of companies. There is also the Financial Reporting Act 1993 which sets out the reporting requirements of certain forms of company. With a limited liability company, the ultimate ownership of the company is held by one or more shareholders. The liability of each shareholder is limited to the amount of share capital that the shareholder has contributed to the company. Companies are managed by their directors and directors have very important duties and obligations under the Companies Act 1993. It is exceedingly important that people who manage a company as its directors are familiar with their duties and obligations under the Companies Act 1993 and we can assist with advice in this area. In New Zealand, companies can be private or public. Private companies are the most common form of company in New Zealand and the shares are held between a small number of shareholders who are usually known to each other. Every company must have at least one shareholder and one director. If companies have a very extensive number of shareholders then further law (such as the Takeovers Code) may apply to them and advice should be taken. Public companies are known as "listed" and the shares of such companies are listed on the New Zealand Stock Exchange and are regulated by more extensive rules and regulations than private companies. The first step to incorporating a company in New Zealand is to make application for reservation of a company name. The Registrar of Companies will not reserve names it considers would contravene other New Zealand statutes, where the name is identical or almost identical to the name of another company, or where the name is offensive. Once the name reservation has been completed, the reservation remains current for 20 working days. The next step is to pay the prescribed fee and file the following documents with the Registrar of Companies:
  1. Notice of name approval;
  2. Application for registration; and
  3. Consents of shareholders and directors.
A company constitution can also be filed on incorporation or adopted at a later point. The constitution must not contravene, or be inconsistent with, certain provisions of the Companies Act. Once adopted, the constitution becomes publically searchable. If a company does not have a constitution, the rights, powers, duties and obligations of the company, the board, each director and each shareholder will be as set out in the Companies Act. Constitutions can be extremely useful in assisting directors and shareholders understand their rights and to enable a company to do certain things that the Companies Act will only allow if the company adopts a constitution providing for those matters. As examples, certain types of redeemable share are only able to be issued by a company that provides for that sort of share issue in its constitution and the company may only indemnify or provide certain forms of insurance for directors if authorised by its constitution. We can provide full advice as to whether you should adopt a constitution and what that constitution should provide for, depending on your business requirements. Shareholders may also consider entering into a contract known as a "shareholders agreement". Unlike a constitution, a shareholders agreement is a private contract in which the shareholders may agree certain legally binding matters as to how they, as shareholders, will deal with issues that arise between them as shareholders. A shareholders' agreement needs to be consistent with the Companies Act but can provide for matters that shareholders do not wish competitors or the general public to be aware and therefore do not wish to record in the company's constitution or relate to how they will deal with matters as shareholders that are additional to the provisions of the Companies Act 1993. Once registration takes place the company is issued with a certificate of incorporation. A company may then commence trading. You can also apply for a company IRD number and register for GST at the same time as incorporating your company, although your accountant can arrange this separately. Companies will need to comply with our relevant legislation, such as all relevant tax statutes, the Financial Reporting Act 1993 (in respect of preparation and/or auditing of accounts) and potentially the Securities Act 1978 (if issuing shares, debt instruments or other securities to the public). We can provide all relevant advice in respect of these requirements. Overseas Companies under the Companies Act 1993 An "overseas company" is defined by the Companies Act 1993 as a body corporate that is incorporated outside New Zealand. The Companies Act requires every overseas company that "carries on business" in New Zealand to register as an overseas company as set out in the Companies Act and the Companies Act provides that an overseas company and its directors commit an offence if they do not do so. The first thing an overseas company must do before "carrying on business" in New Zealand is reserve its name. It must apply for registration to the Registrar of Companies within 10 working days of commencing business in New Zealand. Where any of the details relating to the overseas company change, the change must be filed with the Registrar of Companies within 20 working days. Note that Australian overseas companies do need to register but do not need to file certain changes with the Registrar of Companies due to an information sharing arrangement between the registries in New Zealand and Australia. Apart from its general meaning of "carrying on business", an overseas company carries on business in New Zealand if it establishes or uses a share transfer office or a share registration office in New Zealand or administers, manages or deals with property in New Zealand as an agent, personal representative, or trustee – whether it does this through employees agents or any other manner. Section 332(a) of the Companies Act 1993 states an "overseas company" does not carry on business in New Zealand if it merely:
  1. Is or becomes a party to a legal proceeding or settles a legal proceeding or a claim or dispute; or
  2. Holds meetings of its directors or shareholders or carries on other activities concerning its internal affairs; or
  3. Maintains a bank account; or
  4. Effects a sale of property through an independent contractor; or
  5. Solicits or procures an order that becomes a binding contract only if the order is accepted outside New Zealand; or
  6. Creates evidence of a debt or creates a charge on property;
  7. Secures or collects any of its debts or enforces its rights in relation to securities relating to those debts; or
  8. Conducts an isolated transaction that is completed within a period of 31 days not being one of a number of similar transactions repeated from time to time; or
  9. Invest its funds or holds property.
As it is potentially an offence to "carry on business" in New Zealand without registering as an "overseas company" on the New Zealand Companies Office Register, if you are in any doubt, you should contact us and take legal advice. Overseas Companies under the Financial Reporting Act 1993 Generally speaking, the Financial Reporting Act 1993 ("FRA") prescribes requirements of financial reporting by issuers of securities to the public and certain other entities – and this includes "overseas companies". The FRA generally prescribes what financial statements need to be filed by reporting entitles and ensures that the financial statements comply with generally accepted accounting practice and give a true and fair view of the entities affairs. Together with the Companies Act 1993, the FRA sets out which entities are exempt from the financial reporting requirements and whether an auditor is required to be appointed in respect of financial accounts prepared. The FRA provides that "overseas companies" must register financial statements that comply with the FRA unless the overseas company meets certain requirements of the Financial Reporting Act 1993 or can take advantage of an exemption to the FRA. Among other things, there are a number of exemptions that apply to overseas companies trading in New Zealand which have similar reporting standards in their country of origin as New Zealand. However, you will need specific legal advice on these matters. The FRA not only applies to "overseas companies" as defined in the Companies Act 1993, but it will also apply to a "large" company (as defined in the FRA) that has shareholding held by overseas legal persons (including overseas companies/body corporates or persons not ordinarily resident in New Zealand) of 25% or more. It also applies to any subsidiary (another technical definition) of such a company. The Financial Reporting Act 1993 is a very technical statute and its application can create accounting, audit and reporting obligations for an "overseas company" that can be quite difficult or costly to comply with. As a consequence it is exceedingly important to get advice from New Zealand lawyers and accountants prior to commencing business as an overseas company in New Zealand. Partnership Partnership is defined in the Partnership Act 1908 as the relationship that subsists between persons who carry on a business in common with a view to profit. A partnership is usually established by partners (who can be individuals or other "legal persons" such as companies) entering into a partnership agreement in writing. The Partnership Act 1908 and general case law regulate partnerships. However, the general rules in the Partnership Act can be varied by agreement between the partners and a partnership agreement is normally recommended, since the Partnership Act 1908 only provides the barest essentials in respect of the setting up, management and termination of a partnership. The acts of every partner in carrying on the business of the partnership will bind the partnership. Each partner is liable jointly and severally for the liabilities of the partnership. To avoid disputes down the track, we usually recommend that a partnership agreement should deal with (among other things) the following essential matters:
  1. Objectives;
  2. Details regarding each partner's contributions and entitlements;
  3. The rights and obligations of the partners;
  4. Details regarding operation and management of the partnership;
  5. How defaults by partners and disputes will be handled;
  6. The term of the partnership; and
  7. How termination occurs and how termination is handled.
Limited partnerships Limited partnerships are a form of partnership involving general and limited partners and are a relatively common investment vehicle worldwide. In limited partnerships, the General Partners transact the business of the partnership while limited partners passively invest in that partnership and are liable only to extent of their capital contribution to the partnership. Many countries have international treaties in respect of limited partnerships which make this an effective investment vehicle. This form of partnership can have benefits for overseas investors who wish to retain some degree of anonymity in respect of their investment, as in almost all cases the identities of the limited partners do not need to be publically revealed (although details are required to be given to the Registrar of Limited Partnerships). When considering whether to trade as a limited partnership in New Zealand, both detailed legal and accounting advice is recommended.
4.
Buying and Developing Property in New Zealand Title New Zealand developed and uses the Torrens land registration system under which most parcels of land have their own titles showing dimensions and location, and recording ownership and other interests affecting the land. The government guarantees the accuracy of titles, which can be searched by lawyers and other approved licence holders. In New Zealand dealings with land can be conducted relying on a search copy of a title, rather than on a succession of title deeds. Almost all titles, plans and instruments are in electronic format and therefore can be searched and printed out immediately. Under New Zealand land law, buildings and other structures permanently attached to the land form part of the land itself ie "fixtures", pass with ownership of the land, unless it is agreed otherwise in an agreement for sale and purchase of the land. Contracts for sale and purchase of land To be enforceable under New Zealand law, a contract for the sale and purchase of land must be in writing and signed by the parties involved or their authorised agents. Once signed, an agreement for sale and purchase becomes legally binding on all parties. It can, however, be made subject to conditions which protect the seller or buyer. Common conditions are:
  1. the buyer raising finance;
  2. the buyer being satisfied with a valuation
  3. the buyer being satisfied with local authority information relating to the land usually expressed as being "subject to a LIM report" (Land Information Memorandum);
  4. the buyer being satisfied with engineering reports and building reports; and
  5. the buyer being satisfied with the title.
Where a real estate agent is engaged by a seller to effect a sale, commission is payable by the seller, usually at a rate of approximately four percent of the purchase price. Often the commission can be negotiated with the agent prior to signing any listing agreement. There is usually a reduction in the commission where the purchase price exceeds a certain amount so that the rate applying reduces after say for example the first $300,000.00. Dealings with land are registered electronically against the title and there is no "original" paper title as such but a computer generated print out known as a "search copy". Resource Management Act and District Plans In New Zealand, the Resource Management Act 1991 ("RMA") governs the use of land, water, minerals, the coast, air and physical resources. It aims to promote "sustainable management of physical and natural resources" and seeks to maintain and enhance New Zealand's "clean and green" image. A new development may require a number of consents under the RMA before it can go ahead. The provisions of the RMA must therefore be given consideration before commercial projects and property developments are undertaken. Controls on development are administered by locally elected government authorities and are expressed through a range of publicly notified plans. Where consent is sought to proceed with a development, the applicant must follow the procedures set out in the relevant plan. Building Works The Building Act 2004 is designed to regulate and control building work and the use of buildings. Every new building and most substantial alterations or additions to existing buildings will require a building consent. On completion of works, a code compliance certificate will be issued, provided compliance with the building consent has been satisfied. Any person looking to buy a property in New Zealand should check to ensure a code of compliance certificate has issued in respect of the property – see above section (Contracts for sale and purchase of land) regarding making an agreement conditional on a LIM report. The Building Code is also applicable and sets out criteria to ensure buildings are safe and sanitary. Buildings must also have adequate means of exit and entry and where appropriate must have access and facilities for disabled persons. Existing buildings being altered may require upgrading in order to comply.
5.
New Zealand Foreign Trusts Popularity of Trusts in New Zealand Trusts are a well-recognised and accepted part of the New Zealand legal and economic landscape. They are in wide use and application primarily as vehicles for asset protection. This popularity extends to both domestic and off-shore usage. There is an increasing acknowledgment of New Zealand as a safe and reliable location for an offshore trust. The reasons behind this include New Zealand being internationally acknowledged as having a good reputation and standing as an OECD member. The advantages which are presented by a New Zealand offshore trust have been a part of the New Zealand legal framework and are the result of the government's deliberate policy choice rather than a loophole. Trust Law in New Zealand: Legislation and Case Law New Zealand is a Commonwealth country and a member of many international treaties. A correctly structured New Zealand offshore trust may be able to take advantage of these treaties and numerous Double Tax Agreements. By establishing a New Zealand offshore trust the trust will also have trans-national effect and recognition in countries which have common law heritage. New Zealand's trust law is well established from a mix of both statute and case law which has its foundations in the common law. These principles are clearly understood and readily applied by the Court when required giving the law the required degree of stability and certainty. However with laws constantly developing and changes in personal circumstances to be considered, trust law in New Zealand is also regarded as being both modern and flexible which allows for these issues to be taken into account should the need arise. The Advantages of a New Zealand Foreign Trust There are many advantages to establishing a New Zealand based trust. Trust law in New Zealand allows for wide discretionary powers for trustees including the power to add and remove trustees and beneficiaries, vary the trust deed and, due to its discretionary nature, the ability to choose how and when to make distributions to the beneficiaries while still providing substantial protection for the beneficiaries' rights. This makes for a very controlled but flexible succession and estate planning option. New Zealand is not seen as a "tax haven" country so the use of a New Zealand trust is generally not perceived as a means to avoid tax or as being tax aggressive. Taxation New Zealand's foreign trust regime enables a person who is not a tax resident in New Zealand to establish a New Zealand trust with a New Zealand resident trustee and for that trust to hold offshore assets and to derive income from outside New Zealand but have no New Zealand income tax liability. The income tax liability of a trust in New Zealand is determined by whether or not a settlor is or has ever been a tax resident in New Zealand. New Zealand income tax legislation provides that foreign sourced income derived by a New Zealand resident trustee is exempt income if the settlor of the trust is not resident in New Zealand. Accordingly, a New Zealand established trust with a New Zealand trustee but no New Zealand resident settlor and no New Zealand sourced income will have no New Zealand income tax liability. A New Zealand foreign trust can hold offshore property and derive offshore income. Provided that no income has been sourced in New Zealand, a trust has no New Zealand tax obligations and is not required to file an annual income tax return in New Zealand. A trust would need to have a New Zealand resident trustee. Ideally, the New Zealand trustee would be a New Zealand incorporated company used for this purpose. With regard to compliance issues, such a corporate trustee would need to comply with the usual filing requirements of the Companies Office in New Zealand. There is a disclosure form required by the Inland Revenue department which is relatively straight forward to complete and is predominantly to satisfy Australian Taxation authorities that the Settler is not an Australian tax resident. This is a one-off filing requirement unless there is a change in the information disclosed. The New Zealand situation is rather different in that it taxes a trust by reference to the residence of the settlor rather than the trustee. Therefore, any income tax liability of the New Zealand foreign trust would arise in the country in which the income is sourced. If the source of income is in a country with which New Zealand has a Double Tax Agreement, it could possibly be subject to a concessionary agreement which recognises the trust by reference to the trustee rather than the settlor. In any event, it would be prudent for the settlor of a New Zealand foreign trust to check the impact of the domestic tax laws of the country in which the settlor is tax resident.
6.
Immigration As part of doing business in New Zealand, you may need to consider a number of immigration related issues such as obtaining the appropriate temporary visas/permits for yourself or your employees. The following is a brief outline of some of the more common issues and the solutions that can be provided. Do I require a permit to visit New Zealand? If you are looking to visit New Zealand to investigate business opportunities, you will need to make an application for a visitor visa unless you hold a passport from a visa-free country. A list of the exempt countries can be found on the Immigration New Zealand website at: http://tiny.cc/m3spvw Do I need a permit if I live in New Zealand to run my business? Yes. You will need to apply for a Long Term Business Visa (LTBV). What are the requirements of applying for LTBV? Broadly, you must:
  1. Have completed a business plan relating to your business proposal.
  2. Have business or managerial experience relevant to your business proposal.
  3. Not have been involved in bankruptcy or business failure within the last 5 years.
  4. Not have been involved in business fraud or financial impropriety.
  5. Be of acceptable health and character.
  6. Meet minimum standards of English.
  7. Have sufficient capital and living funds.
What is the duration of my LTBV if I am successful in my application? The total duration of a permit is 36 months. Initially you will obtain a nine month permit to give you the opportunity to transfer your stated capital and living funds to New Zealand and complete your purchase of the business. The balance of 27 months will be granted when you provide documents in support of the transfer of funds and establishment of the proposed business. The permit can be extended beyond the 36 month period, but only in exceptional circumstances. Can my family be included in this application? Yes. If you are successful in your application, your spouse will be granted an open work permit for the same duration of your permit. Any children included in the application will be granted student permits for the same duration of your permit. They will be regarded as domestic students rather than international students. Siblings, parents and any other extended family are not eligible to be included with your application. Can I apply for New Zealand residence through my LTBV? Yes. After successfully establishing and running a business under the LTBV scheme for two years, you are eligible to apply for New Zealand residence under the entrepreneur category. Any family members can also be included in the same application. Can I bring my employees from overseas to work in my New Zealand business? Yes they will need to apply for a work permit under the Specific Purpose category. However, the requirement is that they must be a senior executive, manager or specialist personnel who has been employed in your business for at least 12 months prior to their relocation to New Zealand. What about other employees I want to bring to New Zealand? They will need to apply for a work permit under the Essential Skills category. Depending on what their position is, they will need to demonstrate that their position is one which no New Zealanders are disadvantaged by the foreign worker entering the New Zealand labour market. Generally, this involves a number of labour market tests including the need for you to advertise the position extensively in New Zealand before making the offer to a foreign worker.
7.
Conclusion, Disclaimer and Important Information McVeagh Fleming is fully aware of all the technical and legal requirements for an overseas person investing in or settling up business in New Zealand and we can readily assist you and guide you through the process. There are a number of other statutes that may apply depending on what area of business you engage in and McVeagh Fleming has lawyers that can assist you and provide advice in all areas of business you may engage in. This guide is only designed to provide a very general overview of the New Zealand legal requirements and available structures in which investment in New Zealand or business is conducted. You should place no reliance on the information in this guide and McVeagh Fleming takes no responsibility and will accept no liability for any reliance any person may place in this guide which is not legal advice and is intended as a guide only. The content of this guide is not legal advice and no person should rely on it as advice of any sort, legal advice needs to be tailored to a client's own circumstances and requirements to be accurate or of relevance. It is exceedingly important that you do engage New Zealand lawyers and accountants to advise you on your specific business requirements (including in respect of taxation issues) before embarking on making investment or setting up business in New Zealand. Although some of the legal requirements and issues are technical, your legal advisers can readily guide you through them and obtaining good legal and accounting advice is fundamental to the success and compliance of any business.
We can assist you on all of the above matters and you can contact us on: Contact Us
1.
McVeagh Fleming in the World/Introduction As well as being a premier law firm with two offices in New Zealand's largest city, Auckland, McVeagh Fleming is the New Zealand member law firm of the Ally Law legal network. Ally Law has excellent international coverage and enables member firms to provide cross-border advice utilising the expertise and contacts of Ally Law members and colleagues around the world. "Trans-Tasman" commercial activities between Australia and New Zealand are extremely common and our Australian Ally Law colleagues ensure that we have excellent coverage where transactions span New Zealand and Australia.
As a law firm, McVeagh Fleming has prepared this guide to provide you with a general overview of legal requirements and issues in respect of doing business in New Zealand. This is an overview only, and is not an exhaustive guide nor is it intended to provide full legal advice. You will require specific legal advice in respect of the particular type of business or investment you wish to undertake and we can assist you more specifically as a client of this firm when we get to know you and your particular, specific business needs. In respect of the types of business and investment opportunities that are available in New Zealand, the New Zealand Trade and Enterprise website (a New Zealand Government hosted site) provides an excellent initial resource and can be found at www.nzte.govt.nz
2.
Overseas Investment in New Zealand Foreign investment by "overseas persons" in New Zealand businesses and land is encouraged by the New Zealand Government. In most cases there is little, if any restriction on such investment although you need to ensure that any acquisition is structured appropriately, which we can advise you on fully. In some cases when an "overseas person" invests in New Zealand, the consent of the Overseas Investment Office ("OIO") will be required pursuant to the Overseas Investment Act 2005. If you are an overseas person seeking to invest in New Zealand, you should seek advice from a professional before signing up the investment. This is because you don't want to find yourself committed to the purchase of an asset without having obtained the appropriate consents. The following is a brief explanation of New Zealand's overseas investment regime. Who is an overseas person? An overseas person is anyone who is not a New Zealand citizen, nor "ordinarily resident" in New Zealand. For the purposes of the Overseas Investment Act, virtually all types of body corporate (whether incorporated or unincorporated) including all manner of joint ventures, trusts or partnerships are also likely to be an "overseas person" where an overseas person or persons have 25% or more ownership or control of that entity. A person is "ordinarily resident" if they are entitled to reside in New Zealand indefinitely and are either domiciled or residing in New Zealand with the intention of residing here indefinitely and have done so for the last twelve months. When will consent be required? Whether consent is required depends on whether an "overseas person" has acquired 25% or more direct or indirect ownership and/or control of interest in:
  1. "Sensitive" or "special" New Zealand land.
  2. Limited liability companies
  3. Farm land.
  4. Fishing quota.
We have provided some examples of what type of investment may be subject to the Overseas Investment Act 2005 in this guide, but this is not an exhaustive guide and specific legal advice should be sought and due diligence conducted on any investment an overseas person intends to make in New Zealand – and you should also take advice on how you will most efficiently structure such an acquisition. Overseas investment in "Sensitive" or "Special" land In general an overseas person must obtain consent to acquire an interest in land if the land is "sensitive" (as defined in the Overseas Investment Act) and if the interest is for a term of three years or more. Examples of "sensitive" land includes, but is not limited to:
  1. Non-urban land over five hectares;
  2. The foreshore or seabed or land adjoining the foreshore or seabed and which is over 0.2 hectares;
  3. Land on particular islands;
  4. Certain land over 0.4 hectares such as the bed of a lake, a historic place or whai tapu (land that has special significance to Maori).
Land will also be considered sensitive if it adjoins "sensitive land". "Special" land is defined in the Overseas Investment Act 2005 as the foreshore, seabed, riverbed or lake bed. If it is proposed to acquire sensitive land under the Act and that sensitive land includes any special land, the special land must first be offered to the New Zealand Crown by the vendor or registered proprietor of the land. Generally, the Crown will only acquire such land where there is a public interest in the Crown obtaining ownership. The above are examples only and an overseas person should take legal advice before entering into any legally binding obligations to purchase land in New Zealand. Overseas investment in significant business assets Business asset acquisitions by "overseas persons" require consent where:
  1. The total expenditure involved in establishing a new business exceeds $100 million, or
  2. The price paid when buying an existing asset or business acquisition exceeds $100 million, or
  3. Either the amount paid for the shares, or the gross value of the assets of the company of which shares are being acquired, exceeds $100 million.
There are a number of exemptions to the requirement to obtain consent that are contained in the Overseas Investment Regulations 2005. For example, where your spouse or partner is a New Zealand citizen and the property being purchased will be relationship property. We are familiar with the exemptions and can assist you in determining whether you would be exempt. Overseas investment in farm land Where farm land is involved, the land must first have been offered by the vendor on the open market to non-overseas persons in accordance with certain procedures. Exemptions from this requirement can be obtained but are subject to the discretion of the relevant government department. The consent process Applications for consent are determined in accordance with specific criteria set out in the relevant legislation. Broadly, applicants must:
  1. Be of good character.
  2. Have relevant business experience or acumen.
  3. Be able to demonstrate a financial commitment to their investment.
Applications for overseas investment in sensitive land must show that the applicant does reside or intends to reside in New Zealand permanently or that the overseas investment is likely to benefit New Zealand substantially. Where the applicant intends to reside in New Zealand indefinitely, they must set out their plan to become a permanent resident and take appropriate action in respect of such residency within a reasonable timeframe. The OIO may impose a time limit within which the applicant must become permanently resident. As a general rule, the Government's approach is that the overseas person must be resident in New Zealand within five years of the date of application. Likewise, where the applicant is seeking to prove that the overseas investment is likely to benefit New Zealand substantially, a business plan must be submitted with the application to address the relevant required benefits. The OIO assesses consent applications in accordance with the Overseas Investment Act 1995 and aims to make a decision within fifty working days from the date of registration. This timeframe is not however guaranteed and is based on the OIO receiving a high quality and well prepared application. All agreements relating to overseas investment should be subject to OIO consent and the timeframe for obtaining consent should be factored into the agreement. We are happy to provide you with the relevant form of agreement required or review an agreement prior to signing should you require our assistance. Monitoring of conditions of consent Consent is usually subject to various conditions with which the applicant must comply. Compliance is monitored by the OIO but such monitoring generally does not exceed five years.
3.
Setting Up and Running a Business in New Zealand Structure If you intend to run a business in New Zealand, arriving at the most efficient structure of that business is a matter that needs to be determined appropriately at the outset. As well as obtaining appropriate legal advice, it is extremely important to engage a suitably qualified New Zealand accounting professional to assist advise on New Zealand business accounting requirements and taxation compliance. Overseas persons trading in New Zealand wish to ensure that appropriate taxation is paid and not inadvertently create issues of double taxation or inappropriate accounting or record keeping. Your legal and accounting professionals can then give you full advice on the best business structure for you in New Zealand as well as how to appropriately keep records and account for that businesses financial activities. Limited liability companies One of the most common forms of business ownership in New Zealand is the limited liability company. In New Zealand the most relevant piece of legislation applying to companies is the Companies Act 1993 which governs the incorporation, management and liquidation of companies. There is also the Financial Reporting Act 1993 which sets out the reporting requirements of certain forms of company. With a limited liability company, the ultimate ownership of the company is held by one or more shareholders. The liability of each shareholder is limited to the amount of share capital that the shareholder has contributed to the company. Companies are managed by their directors and directors have very important duties and obligations under the Companies Act 1993. It is exceedingly important that people who manage a company as its directors are familiar with their duties and obligations under the Companies Act 1993 and we can assist with advice in this area. In New Zealand, companies can be private or public. Private companies are the most common form of company in New Zealand and the shares are held between a small number of shareholders who are usually known to each other. Every company must have at least one shareholder and one director. If companies have a very extensive number of shareholders then further law (such as the Takeovers Code) may apply to them and advice should be taken. Public companies are known as "listed" and the shares of such companies are listed on the New Zealand Stock Exchange and are regulated by more extensive rules and regulations than private companies. The first step to incorporating a company in New Zealand is to make application for reservation of a company name. The Registrar of Companies will not reserve names it considers would contravene other New Zealand statutes, where the name is identical or almost identical to the name of another company, or where the name is offensive. Once the name reservation has been completed, the reservation remains current for 20 working days. The next step is to pay the prescribed fee and file the following documents with the Registrar of Companies:
  1. Notice of name approval;
  2. Application for registration; and
  3. Consents of shareholders and directors.
A company constitution can also be filed on incorporation or adopted at a later point. The constitution must not contravene, or be inconsistent with, certain provisions of the Companies Act. Once adopted, the constitution becomes publically searchable. If a company does not have a constitution, the rights, powers, duties and obligations of the company, the board, each director and each shareholder will be as set out in the Companies Act. Constitutions can be extremely useful in assisting directors and shareholders understand their rights and to enable a company to do certain things that the Companies Act will only allow if the company adopts a constitution providing for those matters. As examples, certain types of redeemable share are only able to be issued by a company that provides for that sort of share issue in its constitution and the company may only indemnify or provide certain forms of insurance for directors if authorised by its constitution. We can provide full advice as to whether you should adopt a constitution and what that constitution should provide for, depending on your business requirements. Shareholders may also consider entering into a contract known as a "shareholders agreement". Unlike a constitution, a shareholders agreement is a private contract in which the shareholders may agree certain legally binding matters as to how they, as shareholders, will deal with issues that arise between them as shareholders. A shareholders' agreement needs to be consistent with the Companies Act but can provide for matters that shareholders do not wish competitors or the general public to be aware and therefore do not wish to record in the company's constitution or relate to how they will deal with matters as shareholders that are additional to the provisions of the Companies Act 1993. Once registration takes place the company is issued with a certificate of incorporation. A company may then commence trading. You can also apply for a company IRD number and register for GST at the same time as incorporating your company, although your accountant can arrange this separately. Companies will need to comply with our relevant legislation, such as all relevant tax statutes, the Financial Reporting Act 1993 (in respect of preparation and/or auditing of accounts) and potentially the Securities Act 1978 (if issuing shares, debt instruments or other securities to the public). We can provide all relevant advice in respect of these requirements. Overseas Companies under the Companies Act 1993 An "overseas company" is defined by the Companies Act 1993 as a body corporate that is incorporated outside New Zealand. The Companies Act requires every overseas company that "carries on business" in New Zealand to register as an overseas company as set out in the Companies Act and the Companies Act provides that an overseas company and its directors commit an offence if they do not do so. The first thing an overseas company must do before "carrying on business" in New Zealand is reserve its name. It must apply for registration to the Registrar of Companies within 10 working days of commencing business in New Zealand. Where any of the details relating to the overseas company change, the change must be filed with the Registrar of Companies within 20 working days. Note that Australian overseas companies do need to register but do not need to file certain changes with the Registrar of Companies due to an information sharing arrangement between the registries in New Zealand and Australia. Apart from its general meaning of "carrying on business", an overseas company carries on business in New Zealand if it establishes or uses a share transfer office or a share registration office in New Zealand or administers, manages or deals with property in New Zealand as an agent, personal representative, or trustee – whether it does this through employees agents or any other manner. Section 332(a) of the Companies Act 1993 states an "overseas company" does not carry on business in New Zealand if it merely:
  1. Is or becomes a party to a legal proceeding or settles a legal proceeding or a claim or dispute; or
  2. Holds meetings of its directors or shareholders or carries on other activities concerning its internal affairs; or
  3. Maintains a bank account; or
  4. Effects a sale of property through an independent contractor; or
  5. Solicits or procures an order that becomes a binding contract only if the order is accepted outside New Zealand; or
  6. Creates evidence of a debt or creates a charge on property;
  7. Secures or collects any of its debts or enforces its rights in relation to securities relating to those debts; or
  8. Conducts an isolated transaction that is completed within a period of 31 days not being one of a number of similar transactions repeated from time to time; or
  9. Invest its funds or holds property.
As it is potentially an offence to "carry on business" in New Zealand without registering as an "overseas company" on the New Zealand Companies Office Register, if you are in any doubt, you should contact us and take legal advice. Overseas Companies under the Financial Reporting Act 1993 Generally speaking, the Financial Reporting Act 1993 ("FRA") prescribes requirements of financial reporting by issuers of securities to the public and certain other entities – and this includes "overseas companies". The FRA generally prescribes what financial statements need to be filed by reporting entitles and ensures that the financial statements comply with generally accepted accounting practice and give a true and fair view of the entities affairs. Together with the Companies Act 1993, the FRA sets out which entities are exempt from the financial reporting requirements and whether an auditor is required to be appointed in respect of financial accounts prepared. The FRA provides that "overseas companies" must register financial statements that comply with the FRA unless the overseas company meets certain requirements of the Financial Reporting Act 1993 or can take advantage of an exemption to the FRA. Among other things, there are a number of exemptions that apply to overseas companies trading in New Zealand which have similar reporting standards in their country of origin as New Zealand. However, you will need specific legal advice on these matters. The FRA not only applies to "overseas companies" as defined in the Companies Act 1993, but it will also apply to a "large" company (as defined in the FRA) that has shareholding held by overseas legal persons (including overseas companies/body corporates or persons not ordinarily resident in New Zealand) of 25% or more. It also applies to any subsidiary (another technical definition) of such a company. The Financial Reporting Act 1993 is a very technical statute and its application can create accounting, audit and reporting obligations for an "overseas company" that can be quite difficult or costly to comply with. As a consequence it is exceedingly important to get advice from New Zealand lawyers and accountants prior to commencing business as an overseas company in New Zealand. Partnership Partnership is defined in the Partnership Act 1908 as the relationship that subsists between persons who carry on a business in common with a view to profit. A partnership is usually established by partners (who can be individuals or other "legal persons" such as companies) entering into a partnership agreement in writing. The Partnership Act 1908 and general case law regulate partnerships. However, the general rules in the Partnership Act can be varied by agreement between the partners and a partnership agreement is normally recommended, since the Partnership Act 1908 only provides the barest essentials in respect of the setting up, management and termination of a partnership. The acts of every partner in carrying on the business of the partnership will bind the partnership. Each partner is liable jointly and severally for the liabilities of the partnership. To avoid disputes down the track, we usually recommend that a partnership agreement should deal with (among other things) the following essential matters:
  1. Objectives;
  2. Details regarding each partner's contributions and entitlements;
  3. The rights and obligations of the partners;
  4. Details regarding operation and management of the partnership;
  5. How defaults by partners and disputes will be handled;
  6. The term of the partnership; and
  7. How termination occurs and how termination is handled.
Limited partnerships Limited partnerships are a form of partnership involving general and limited partners and are a relatively common investment vehicle worldwide. In limited partnerships, the General Partners transact the business of the partnership while limited partners passively invest in that partnership and are liable only to extent of their capital contribution to the partnership. Many countries have international treaties in respect of limited partnerships which make this an effective investment vehicle. This form of partnership can have benefits for overseas investors who wish to retain some degree of anonymity in respect of their investment, as in almost all cases the identities of the limited partners do not need to be publically revealed (although details are required to be given to the Registrar of Limited Partnerships). When considering whether to trade as a limited partnership in New Zealand, both detailed legal and accounting advice is recommended.
4.
Buying and Developing Property in New Zealand Title New Zealand developed and uses the Torrens land registration system under which most parcels of land have their own titles showing dimensions and location, and recording ownership and other interests affecting the land. The government guarantees the accuracy of titles, which can be searched by lawyers and other approved licence holders. In New Zealand dealings with land can be conducted relying on a search copy of a title, rather than on a succession of title deeds. Almost all titles, plans and instruments are in electronic format and therefore can be searched and printed out immediately. Under New Zealand land law, buildings and other structures permanently attached to the land form part of the land itself ie "fixtures", pass with ownership of the land, unless it is agreed otherwise in an agreement for sale and purchase of the land. Contracts for sale and purchase of land To be enforceable under New Zealand law, a contract for the sale and purchase of land must be in writing and signed by the parties involved or their authorised agents. Once signed, an agreement for sale and purchase becomes legally binding on all parties. It can, however, be made subject to conditions which protect the seller or buyer. Common conditions are:
  1. the buyer raising finance;
  2. the buyer being satisfied with a valuation
  3. the buyer being satisfied with local authority information relating to the land usually expressed as being "subject to a LIM report" (Land Information Memorandum);
  4. the buyer being satisfied with engineering reports and building reports; and
  5. the buyer being satisfied with the title.
Where a real estate agent is engaged by a seller to effect a sale, commission is payable by the seller, usually at a rate of approximately four percent of the purchase price. Often the commission can be negotiated with the agent prior to signing any listing agreement. There is usually a reduction in the commission where the purchase price exceeds a certain amount so that the rate applying reduces after say for example the first $300,000.00. Dealings with land are registered electronically against the title and there is no "original" paper title as such but a computer generated print out known as a "search copy". Resource Management Act and District Plans In New Zealand, the Resource Management Act 1991 ("RMA") governs the use of land, water, minerals, the coast, air and physical resources. It aims to promote "sustainable management of physical and natural resources" and seeks to maintain and enhance New Zealand's "clean and green" image. A new development may require a number of consents under the RMA before it can go ahead. The provisions of the RMA must therefore be given consideration before commercial projects and property developments are undertaken. Controls on development are administered by locally elected government authorities and are expressed through a range of publicly notified plans. Where consent is sought to proceed with a development, the applicant must follow the procedures set out in the relevant plan. Building Works The Building Act 2004 is designed to regulate and control building work and the use of buildings. Every new building and most substantial alterations or additions to existing buildings will require a building consent. On completion of works, a code compliance certificate will be issued, provided compliance with the building consent has been satisfied. Any person looking to buy a property in New Zealand should check to ensure a code of compliance certificate has issued in respect of the property – see above section (Contracts for sale and purchase of land) regarding making an agreement conditional on a LIM report. The Building Code is also applicable and sets out criteria to ensure buildings are safe and sanitary. Buildings must also have adequate means of exit and entry and where appropriate must have access and facilities for disabled persons. Existing buildings being altered may require upgrading in order to comply.
5.
New Zealand Foreign Trusts Popularity of Trusts in New Zealand Trusts are a well-recognised and accepted part of the New Zealand legal and economic landscape. They are in wide use and application primarily as vehicles for asset protection. This popularity extends to both domestic and off-shore usage. There is an increasing acknowledgment of New Zealand as a safe and reliable location for an offshore trust. The reasons behind this include New Zealand being internationally acknowledged as having a good reputation and standing as an OECD member. The advantages which are presented by a New Zealand offshore trust have been a part of the New Zealand legal framework and are the result of the government's deliberate policy choice rather than a loophole. Trust Law in New Zealand: Legislation and Case Law New Zealand is a Commonwealth country and a member of many international treaties. A correctly structured New Zealand offshore trust may be able to take advantage of these treaties and numerous Double Tax Agreements. By establishing a New Zealand offshore trust the trust will also have trans-national effect and recognition in countries which have common law heritage. New Zealand's trust law is well established from a mix of both statute and case law which has its foundations in the common law. These principles are clearly understood and readily applied by the Court when required giving the law the required degree of stability and certainty. However with laws constantly developing and changes in personal circumstances to be considered, trust law in New Zealand is also regarded as being both modern and flexible which allows for these issues to be taken into account should the need arise. The Advantages of a New Zealand Foreign Trust There are many advantages to establishing a New Zealand based trust. Trust law in New Zealand allows for wide discretionary powers for trustees including the power to add and remove trustees and beneficiaries, vary the trust deed and, due to its discretionary nature, the ability to choose how and when to make distributions to the beneficiaries while still providing substantial protection for the beneficiaries' rights. This makes for a very controlled but flexible succession and estate planning option. New Zealand is not seen as a "tax haven" country so the use of a New Zealand trust is generally not perceived as a means to avoid tax or as being tax aggressive. Taxation New Zealand's foreign trust regime enables a person who is not a tax resident in New Zealand to establish a New Zealand trust with a New Zealand resident trustee and for that trust to hold offshore assets and to derive income from outside New Zealand but have no New Zealand income tax liability. The income tax liability of a trust in New Zealand is determined by whether or not a settlor is or has ever been a tax resident in New Zealand. New Zealand income tax legislation provides that foreign sourced income derived by a New Zealand resident trustee is exempt income if the settlor of the trust is not resident in New Zealand. Accordingly, a New Zealand established trust with a New Zealand trustee but no New Zealand resident settlor and no New Zealand sourced income will have no New Zealand income tax liability. A New Zealand foreign trust can hold offshore property and derive offshore income. Provided that no income has been sourced in New Zealand, a trust has no New Zealand tax obligations and is not required to file an annual income tax return in New Zealand. A trust would need to have a New Zealand resident trustee. Ideally, the New Zealand trustee would be a New Zealand incorporated company used for this purpose. With regard to compliance issues, such a corporate trustee would need to comply with the usual filing requirements of the Companies Office in New Zealand. There is a disclosure form required by the Inland Revenue department which is relatively straight forward to complete and is predominantly to satisfy Australian Taxation authorities that the Settler is not an Australian tax resident. This is a one-off filing requirement unless there is a change in the information disclosed. The New Zealand situation is rather different in that it taxes a trust by reference to the residence of the settlor rather than the trustee. Therefore, any income tax liability of the New Zealand foreign trust would arise in the country in which the income is sourced. If the source of income is in a country with which New Zealand has a Double Tax Agreement, it could possibly be subject to a concessionary agreement which recognises the trust by reference to the trustee rather than the settlor. In any event, it would be prudent for the settlor of a New Zealand foreign trust to check the impact of the domestic tax laws of the country in which the settlor is tax resident.
6.
Immigration As part of doing business in New Zealand, you may need to consider a number of immigration related issues such as obtaining the appropriate temporary visas/permits for yourself or your employees. The following is a brief outline of some of the more common issues and the solutions that can be provided. Do I require a permit to visit New Zealand? If you are looking to visit New Zealand to investigate business opportunities, you will need to make an application for a visitor visa unless you hold a passport from a visa-free country. A list of the exempt countries can be found on the Immigration New Zealand website at: http://tiny.cc/m3spvw Do I need a permit if I live in New Zealand to run my business? Yes. You will need to apply for a Long Term Business Visa (LTBV). What are the requirements of applying for LTBV? Broadly, you must:
  1. Have completed a business plan relating to your business proposal.
  2. Have business or managerial experience relevant to your business proposal.
  3. Not have been involved in bankruptcy or business failure within the last 5 years.
  4. Not have been involved in business fraud or financial impropriety.
  5. Be of acceptable health and character.
  6. Meet minimum standards of English.
  7. Have sufficient capital and living funds.
What is the duration of my LTBV if I am successful in my application? The total duration of a permit is 36 months. Initially you will obtain a nine month permit to give you the opportunity to transfer your stated capital and living funds to New Zealand and complete your purchase of the business. The balance of 27 months will be granted when you provide documents in support of the transfer of funds and establishment of the proposed business. The permit can be extended beyond the 36 month period, but only in exceptional circumstances. Can my family be included in this application? Yes. If you are successful in your application, your spouse will be granted an open work permit for the same duration of your permit. Any children included in the application will be granted student permits for the same duration of your permit. They will be regarded as domestic students rather than international students. Siblings, parents and any other extended family are not eligible to be included with your application. Can I apply for New Zealand residence through my LTBV? Yes. After successfully establishing and running a business under the LTBV scheme for two years, you are eligible to apply for New Zealand residence under the entrepreneur category. Any family members can also be included in the same application. Can I bring my employees from overseas to work in my New Zealand business? Yes they will need to apply for a work permit under the Specific Purpose category. However, the requirement is that they must be a senior executive, manager or specialist personnel who has been employed in your business for at least 12 months prior to their relocation to New Zealand. What about other employees I want to bring to New Zealand? They will need to apply for a work permit under the Essential Skills category. Depending on what their position is, they will need to demonstrate that their position is one which no New Zealanders are disadvantaged by the foreign worker entering the New Zealand labour market. Generally, this involves a number of labour market tests including the need for you to advertise the position extensively in New Zealand before making the offer to a foreign worker.
7.
Conclusion, Disclaimer and Important Information McVeagh Fleming is fully aware of all the technical and legal requirements for an overseas person investing in or settling up business in New Zealand and we can readily assist you and guide you through the process. There are a number of other statutes that may apply depending on what area of business you engage in and McVeagh Fleming has lawyers that can assist you and provide advice in all areas of business you may engage in. This guide is only designed to provide a very general overview of the New Zealand legal requirements and available structures in which investment in New Zealand or business is conducted. You should place no reliance on the information in this guide and McVeagh Fleming takes no responsibility and will accept no liability for any reliance any person may place in this guide which is not legal advice and is intended as a guide only. The content of this guide is not legal advice and no person should rely on it as advice of any sort, legal advice needs to be tailored to a client's own circumstances and requirements to be accurate or of relevance. It is exceedingly important that you do engage New Zealand lawyers and accountants to advise you on your specific business requirements (including in respect of taxation issues) before embarking on making investment or setting up business in New Zealand. Although some of the legal requirements and issues are technical, your legal advisers can readily guide you through them and obtaining good legal and accounting advice is fundamental to the success and compliance of any business.
We can assist you on all of the above matters and you can contact us on: Contact Us

© McVeagh Fleming 2013

This article is published for general information purposes only.  Legal content in this article is necessarily of a general nature and should not be relied upon as legal advice.  If you require specific legal advice in respect of any legal issue, you should always engage a lawyer to provide that advice.

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