As many of you will be aware, the New Zealand Companies Act was amended in 2014 and this caused somewhere of a ruction given that a new requirement was introduced requiring a resident director. Subsequently, I have been receiving lots of emails querying how one goes about finding a Nominee Director NZ.
What Were the Major Changes to the Companies Act?
The government of the day elected to make quite a few changes to the way that resident and on-resident companies act in New Zealand due to a long list of ongoing compliance issues. There was a view taken that the lack of strong compliance for NZ companies could damage the reputation of the country as a haven for offshore funds.
Subsequently, changes were made to the New Zealand companies’ law and the following new requirements came into effect on the 1st of May 2015:
- Resident Director Requirement
- Full Director Information to be provided.
- Limited Partnerships also required to have an NZ Resident Partner
- Changes to the FSPR enforcement regime
What this effectively meant is that all offshore companies registered in New Zealand would need to find a Nominee Director in NZ. Unfortunately, this has caused difficulties in sourcing trusted, and experienced individuals to fill this role because, at the same time, the courts introduced some key decisions that increased risk to directors.
How Do I Find a Nominee Director NZ
There is certainly a great difficulty in sourcing someone who has the appropriate skills and can be trusted as a nominee for your NZ offshore company. With the recent increase in Director liability and changes to Director’s duties, it has become difficult to find nominees. Sure, you can google for service providers, but you are likely to discover just how hard it is to find someone who is willing to undertake this role.
Typically, you may find yourself having to go through several rounds of interviews with a potential resident director as he assesses the risk around your business. You can be expected to be asked, in detail, what your business actually is and how and why you will be operating in New Zealand. At this point, the Nominee Director will decide if he is able to represent your interests and take on the underlying risk.
What Does it Cost?
Due to the previously mentioned risks, the answer is that it depends on the level and type of business that you expect to undertake from New Zealand. However, I can provide you a general range and that is from approximately NZD$1,000 to NZD$6,500 per year. Obviously, that isn’t all that cheap but please understand that nominee directors in New Zealand are now obligated to enquire into the business affairs continually throughout the year (known as continued disclosure). What this means in practice is greater costs given the time it takes to undertake the oversight of the company operations.
Is It Still Worth It to Domicile in New Zealand?
Yes…But You Must Find a Nominee Director NZ
New Zealand is not a low-tax environment and, with corporate taxes running at 28% on retained earnings, you can expect to be paying quite a bit to base yourself here. However, there are some unique benefits to the country’s hands-off approach to offshore/wholesale markets.
What this means in practice is that you may actually be able to set up non-regulated financial services or fund business here in New Zealand as long as you only deal with offshore clients. The Financial Markets Conduct Act is largely territorial in scope, and this means that they have little interest in regulating offshore transactions. For this reason, I have recently seen quite a few FX brokers opting to operate in the unregulated market in NZ and only deal with offshore clients.
Subsequently, especially for those in the broader financial services space, there can be some very good reasons to look to New Zealand for a base to operate from. It’ really is a 1st world country with an excellent reputation throughout most of Asia. It is seen as desirable and pure, due to its environment, and the Asian markets have an affinity for it.
Can You Help Me Find a Nominee Director NZ ?
In short….Yes, we can. Our consulting arm provides NZ Resident and nominee director services and can work with you to get you set up and operating. Our team has significant experience working in the NZ sector and our nominee directors are members of the director’s institute and regularly undertake training regarding governance and regulation.
However, if you would prefer to work with someone else, we can also certainly make some recommendations for you. Simply contact us to discuss your requirements and we will do our best to take care of your needs.