Are you currently based overseas and looking to start a business in New Zealand?
In New Zealand business start-up is very simple. We will guide you through business planning process.
You have probably heard that New Zealand is one of the easiest places in the world to open a business in terms of cost, ease and time. This is true – it is incredible simple, can be done online, payment by credit card and with links to set up and register your website domain name and for tax at the same time. It has actually got simpler in the last few years.
Registering a New Company
Most new companies set up in business as a Limited Liability Company. The legislation that covers companies is the Companies Act 1993. Obviously there are other options, such as being a branch office of an overseas business or other forms of ownership, (including sole trader, partnerships, trusts etc) but at Start-Up Lab we have created our programme based on limited liability companies as these are the most common. If you have different or unique circumstances then we strongly suggest that you contact a lawyer and we can refer you to one.
Who can be a Director?
You do not need to be a NZ citizen or resident to be a company director, but ONE of the directors needs to live in New Zealand – although in some circumstances an Australian based director may comply. If you are the sole director you need to be living in NZ (generally considered to be here for 183 days of the year)
You will need the full details of your directors/shareholders, share allocation and their residential address. The address of the NZ/Australian based director will be validated by a posted code.
The Government website run by the Ministry of Business Innovation and Employment (MBIE) is actually really useful and clear so trawl around there and use the search function if you have a specific question. Directors must be over 18 years old and not undischarged bankrupts or prevented by other criminal convictions. (Details on the website https://www.business.govt.nz/companies/learn-about/companies/company-directors/who-cannot-be-a-director ) Directors have specific duties, responsibilities and penalties under NZ law including the new Health and Safety at Work Act of 2015 and so it is now not common to ask an accountant or lawyer to become a ‘silent’ director for your company
The best place to start registering a company name is Onecheck: www.business.govt.nz/onecheck which allows you to check availability of the proposed company name and trademark of your business, and which website domain names are available. In NZ the most frequent website domain name if NZ based businesses is the suffix .co.nz and you should try and obtain this if you can. You can reserve domain names for 20 days for $10 NZ whilst you confirm your details. You will be asked to pick a website host provider, you can pick an international one, but I like to have a local option and use www.freeparking.co.nz myself and find them very good. It costs $39 per annum for a domain name and approx $200 NZ per annum for a standard hosting plan.
There are some questions that you will be asked on the way:
Do you have a Constitution? If you don’t then the default provisions of the Companies Act 1993 apply. Our legal advisors strongly recommend getting a constitution done if you have more than one shareholder/director as it allows you to have Directors indemnity insurance –which you cannot have without one. There are other situations where a constitution might be useful especially if you are a minority shareholder or have different classes of shares. You can however set the company up without one and then add it later.
You will also be asked if you want to apply for a tax (IRD) number for the new entity as you register. We suggest that you do, this may take a few weeks to be issued and posted out.
You may also be asked if you want to register for GST, – this is optional for businesses earning under $60,000 and so could be deferred, however if you are purchasing equipment for your new business then we do recommend that you go ahead and register for GST so you may be able to claim back GST on your outgoings.
It costs $NZ 160 to register your limited liability company for the year and then $NZ 45 to renew and confirm you directors/ shareholders details annually.
So much for the legal and regulatory stuff. As you can see it only costs a few hundred dollars to do. You may elect to wait until you have done your planning work and are closer to trading before you register your company, but you may want to go ahead and register the domain name to make sure that you obtain it if you have chosen and company name.
Market Validation and Business Plan
You might now be ready for our structured information programme to guide you through the start-up process with links to great resources for accessing the information, and introductions to our trust network or specialists or mentors to assist you with your particular issues or industry.
We have created Start-Up Lab, a 4 module programme of downloadable information using best practice lean start-up methods, to allow you to get yourself up to speed on the process and each module includes a worksheet and some templates to record your findings and decisions. We have also included an hour of time* per module with an experienced NZ business owner to review your progress in the module. In Module 4 you also get access to an experienced lawyer, accountant and website specialist for a FREE initial meeting using our provided checklists which means that you can go prepared to get the best out of your time with them.
You can start the process from overseas, but we strongly encourage you to get to NZ before you complete the business plan so that you can meet and talk to potential customers, competitors and affiliates and really get a feel for how business operates in New Zealand -before you commit serious money to the venture.
With Start-Up Lab working alongside you, you get a team of experienced supporters who are used to working with early stage businesses and can help you succeed.
Disclaimer: At Start-Up Lab we are not lawyers or immigration specialists, but we can refer you to them if you would like. The information contained in this post is for information only and is believed to be correct at the time of writing in August 2016 but all information should be checked on the appropriate government websites before relying on it.
*Details on how much support time is offered is described in the modules in the product description in the shop pages of the website Additional time can be purchased for fixed monthly rates from all providers and all is available in person in Auckland or on video conferencing.
If you have any questions just ring or email Christine at Start-up Lab NZ Limited. Christine@startuplab.co.nz and +64 21 857280