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New Zealand

 
   
Executive Summary
The country consists of two main islands – the North and the South Islands, and it is situated in South-Western part of the Pacific Ocean. To the country also numerous small islands of the region belong, all together covering the territory of almost 270,000 sq km. New Zealand is known for its geographic isolation from other countries.

The most part of the population has arrived from Europe, while the largest minority group is represented by Maori, and Asians are other minorities. The UK Queen is the head of New Zealand, even though she has only a symbolic position with no real influence on political affairs of the country. The parliament is elected in democratic elections, and the Prime Minister is the head of the government. Wellington is the capital of New Zealand, but its biggest city is Auckland.

The market free economy is one of the world’s most free market economies. It is one of the countries with the highest income per household and with a very high level of life satisfaction. The largest income is generated by the services industry (around 70%), manufacturing, construction, farming and raw material extraction are developed activities therein as well. Fishing, forestry and agricultural products are exported making a significant part of Nez Zealand incomes. Tourism contributes around 9% to the GDP of the country.

The population reaches over 4 million people. The currency is New Zealand Dollar (NZD).

Geography
The North Island and the South Island together with many other small islands are united in one single country. The biggest islands are separated from each other by Cook Strait, just 20 km wide at its narrowest point. Extensive marine resources belong to the country, 15 times exceeding the land area.

The South Island is mountainous, 19 peaks are over 3,000 m, the highest of which is Mount Cook – 3,745 m high. There are not so high mountains on the North Island, but they are of a volcanic origin, the highest peak is Mount Ruapehu – 2,797 m high. The landscape of the country is spectacular and diversified, making New Zealand attractive for TV programs and film production.

The climate is temperate and mainly maritime. The temperature usually does not fall under 0 C and almost never over +40 C. Depending on the area, whether mountains or near the sea, the climate can vary significantly on the territory of New Zealand in the same day. In average there are more rains on the South Island.

Map, Flag and Coat of Arm


Types of Company

Limited Companies

A company is registered by one or more persons with the Companies Office, and it must have at least one shareholder, at least one share and at least one director. It often takes a form of tax free special purpose company, in which no minimum capital requirements are present, and only if 25% or more of shareholding is located outside the country, the annual accounts should be filed. There is a great level of flexibility in creating such a structure, but bearer shares are allowed.

Overseas companies
It is possible to establish a branch of the existent company or to relocate the existent foreign company to New Zealand, but each application is carefully studied by the Overseas Investment Commission, in order to make sure that the foreign presence and foreign investments will bring a profit to the country.

Partnerships and joint ventures
Ordinary and special partnerships are possible to incorporate in New Zealand, locating the international expertise in a favorable business environment.

Sole traders
A sole trader owns all the assets of the company and is fully liable for all the activities, risks and debts of the structure.

Trusts
Traditional style of family trust–non trading
It is used for asset protection purposes.
Traditional style of family trust–producing income
It is created with the aim to protect assets and to distribute profits to beneficiaries.

Mirror trusts
Two trusts are usually created, one by the wife and another by the husband with the aim to include the spouse and children as beneficiaries. The main objective of these trusts is avoiding estate duties.

Trading trust with a corporate trustee
This structure is effective for distributing the income gained as a result of its activity. The trust can trade through the limited liability company (the only trustee) by using its name, that in many cases might be an effective solution.

Trust as a shareholder of a trading company
The income to beneficiaries is distributed as company’s dividends.

Taxation

Private
A tax year for a private person starts on the 1st April and ends on the 31st March. Residents are liable to income tax on worldwide incomes, and the tax rate varies depending on the amount of money earned during the ear.

A person is considered to be a resident of New Zealand if he/she spends more than 183 days a year or has a “long-lasting” relationship with New Zealand. A transitional resident is a person that returns to New Zealand after 10 years absence or moves to the country for the first time. In a lifetime a person can be a transitional resident only once and he/she follows the rules of non-residents for the first 48 months. Non residents are liable to pay income taxes only on the income generated on the territory of New Zealand.

New Zealand has signed Double Taxation Treaties with many countries that let resident entities avoid paying double tax in case they are tax residents in more than one jurisdiction.

Corporate
A company is a New Zealand resident company if it is incorporated there, if its management is conducted from the country or its head office is situated there. Resident companies are liable to income tax at a 30% rate. Withholding tax rate is usually 15% on most payments to non-resident entities. Once incorporated, a company can operate worldwide and some structures and types of business allow it to operate as a tax free offshore company, however, without being considered an entity of a “traditional tax heaven” environment.

Most goods sold in New Zealand include Goods and Services Tax (GST) at a rate of 12,5%, the exceptions are represented by financial services and export of products. A company should be registered as a GST payer if its turnover exceeds US$ 40,000 per year.

 
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