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New Zealand Agency Company
Concept of New Zealand Agency Company
An independent New Zealand Agency Company is formed to act for one or more principal businesses based in an offshore tax free jurisdiction. This jurisdiction could be for example BVI, Cayman Islands etc. However as a result of the "black-listing" of many if not all of these jurisdictions in many EU and other countries, their attractiveness as jurisdictions standing alone has waned considerably. The New Zealand Agency Company provides an ideal structure and "clean" face to represent principals. The written agreement between the agency and principal could for example provide for commissions of say 5%-10% of the total invoices raised/profits generated and the remaining 90-95% is then transferred to the account of the principal company free of any further taxation.
It should be noted that New Zealand is not "black listed" by any country or authority in the World and does not have any tax haven connotations. It is a member of the O.E.C.D. and W.T.O. It is not perceived by O.E.C.D. as a harmful tax jurisdiction. It is not a member of the EU, and is not influenced by the EU Savings Tax Directive and any future developments (should they be extended to apply to companies or trusts). It has not and is unlikely to come under pressure of disclosure from EU, US or OECD. It has double tax agreements with a total of 34 countries.
It is a signatory to the 1922 Hague Convention and can provide Apostilled documentation as well as Notarised documentation.
New Zealand is a member of the British Commonwealth, has a common law system, and is English speaking with a robust infrastructure including banking, commerce and communications.
Taxation
The New Zealand Agency Company must be non-associated with the principal, and the Agency Company's remuneration would need to be based on "Fair Market Value" otherwise the transfer pricing regime could be triggered which would disadvantage the taxation outcomes.
Directorship and Management
New Zealand residency is determined on any one or more of the following tests being met namely:
- The company is incorporated in New Zealand; or
- The company's centre of management is situated in New Zealand; or
- The company's head office is in New Zealand; or
- Control of the company by its directors is exercised in New Zealand.
Because the New Zealand Agency company will meet one or more of these tests, it will be resident of New Zealand and taxable on its net agency income. From the New Zealand perspective the company will need a minimum of one director, which could be a New Zealand resident person, or alternatively an offshore resident person/s, or both. The advantage of a New Zealand resident is that this person may project a more legitimate New Zealand 'look' and add to the 'independence' from the principal company. If offshore directors were chosen, then there would need to be a majority of offshore directors resident in tax free jurisdictions, in order that the company could not also be taxable offshore as well as in New Zealand. While from a New Zealand tax point of view it is not essential to have the day to day operational management function located in New Zealand, however it could assist the 'look' of independence from the principal to consider New Zealand as the location. A minimum requirement would be to have the Agency Company's day to day operational management physically separated from the Principal.
New Zealand Accountancy and Tax requirements
The Agency company will be required to be registered as a New Zealand taxpayer, with the New Zealand tax authority and pay provisional tax in 1/3 rd instalments, on three dates during the year. In addition if its turnover exceeds or is expected to exceed NZD40,000 in any 12 month period, then this company also needs to be registered for Goods and Services Tax (similar to VAT in U.K.)
NZ Securities can through its associated Accountancy practice undertake the necessary registrations, prepare any financial accounts and attend to the tax and any Goods and Services tax issues.
Services provided by NZ Securities Limited
We can provide the following services for the New Zealand Agency Company:
Formation of the Agency Company Provision of registered office, Provision of New Zealand resident director, Provision of New Zealand resident shareholder (note: If foreign shareholders own 25% or greater shares, then the company will be subject to preparing annual audited accounts, which are required to be submitted to Registrar of Companies for exposure via the internet), Completing and filing Company Annual Return, and assisting with opening a New Zealand bank account.
For more information please LINKS.
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