New Zealand government tightens rules around companies

20 December 2013

John Thorman of TMF Group’s New Zealand office analyses the impact of the country’s crackdown on criminal activity from abroad.

The pending Companies and Limited Partnerships Amendment Bill is government’s attempt to tighten requirements around company directors and company registration. The main change will require all New Zealand companies to have a New Zealand-resident director.  The measures are designed to shore up New Zealand's company registration process against criminal activity from overseas.
 
New Zealand’s company registration processes are highly-respected. But there have been increasing threats to our international reputation posed by overseas interests which use New Zealand-registered companies to undertake criminal activity. These changes will help ensure New Zealand retains its position as one of the best places in the world to do business.

New Zealand-resident directors will be responsible for ensuring companies provide accurate information to the Registrar of Companies; they will be liable if companies breach their filing requirements under the Companies Act. The Registrar will also be able to prohibit any such person from acting as a director for up to five years. Similar provisions will be put in place for limited partnerships.
 
How does it affect current foreign owned New Zealand-registered entities?

A number of foreign-owned entities currently have their overseas directors also acting as directors of the New Zealand entity - either because they have no New Zealand employees or do not wish their New Zealand employees to have directorship powers over their businesses.

Those that do not comply with the requirement to have a director who lives in New Zealand within six months of the bill being introduced risk having the Registrar remove that company from the register.

How we can help
 
As part of the standard TMF Group service offering we can provide companies with local resident directors; these are employees of the local TMF Group New Zealand office. To find out more about the benefits of using our service and to contact the local office click here.

 
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