At NZ International Tax & Property Advisors, we have experienced increasing offshore inquiries from foreign businesses looking to set up their operation in New Zealand. One of the common questions asked is what is the appropriate structure to set up their New Zealand operations? We have considered an Australian parent company looking to set up its New Zealand operation.
The most common ownerships are a branch of the Australian business or a separate New Zealand subsidiary company. Each has its own pros and cons. Specific advice for your situation shall be considered to ensure the structure fits requirements and future plans. There are also tricky questions about tax residency and dual resident companies. Alternative options include Limited Partnership, a General Partnership, a Trading Trust or a Sole Trader, which could suit your businesses better.
Here are a few structures that you can select for your New Zealand based business and their advantages and disadvantages:
Option One: Branch of Australian company
A branch of an Australian Company is a relatively simple structure that can be registered quickly and easily. Here are a few things to be mindful of:
Option Two: Incorporate a subsidiary company in New Zealand
The New Zealand subsidiary structure is common for Trans-Tasman investment and, therefore, well understood. This is a relatively simple structure, and the compliance is not overly complex. The structure can work well for large operations and provide confidence to New Zealand customers that they are dealing with a New Zealand company. Here are a few things to be mindful of:
Of course, tax is only one consideration when you are looking to set up a business in New Zealand. There is a myriad of other things to consider and people to talk to. Feel free to reach out to our team to see how we can assist and add value! Visit our website to explore our other tax services!