WILLIAMS & ASSOCIATES specializes in assets protection, tax structuring and investments planning for foreigners in New Zealand.
The law firm offers and extended corporate structure portfolio. Our clients, characterized by their constant search for new corporate structures, are constantly looking for efficient solutions, for their financial growth and assets protection.
WILLIAMS & ASSOCIATES offers the constitution of corporate figures and trust, based on the benefits offered by New Zealand.
There are many reasons why our clients come to the firm requesting advice for corporate structure and juridical structures in New Zealand, among a few:
New Zealand has become to be known as the best country in the world, with the best corporate structure, due to its assets protection system and tax reduction system, for foreign investment. It is not a tax haven country and it is considered the venue with the best legislation for foreign investment. Its legislation cannot be found as part of any black list agency or international organization and it is member of the Organization for Development and Economic Cooperation (OECD), Financial Action Task Force Group (FATF) and the World Trade organization (WTO).
New Zealand it is considered the fifth country in economic well been, according to the INDEX OF ECONOMIC FREEDOM FOUNDATION 2014, which is annually publish by the Heritage Foundation and the Wall Street Journal.
New Zealand is the third best country of the world for business, after Denmark and Hong Kong, according to the list published by the Best Countries for Business. It is the country with the lowest index in corruption and more solid and stable democratic institutions in the world, and recently has enacted laws to open foreign investments and of the creation of corporations.
WILLIAMS &ASSOCIATES has summarized the benefits of corporate figures constitution in New Zealand according to the following classification:
Corporate structures created by foreigners are totally exempted of taxes if its incomes are from overseas activities, specifically foreign trust are exempt to pay taxes as long as the owners are not a resident and are not used for financial activities in the country. This structure allows exchanging, investing, and owned assets, sale and purchase of properties, hold shares without paying taxes in New Zealand.
New Zealand is one of the few jurisdictions that offer an additional protection to the trust fund, which means that creditors, spouses and others interested in the sequestration of your assets are not allowed to present any claim against the trust assets because those assets are property of the trust.
Also in New Zealand the increase of the amount does not mean an increase in the taxes. This applies for the increase of the trust assets or company’s assets.
Foreign trust in New Zealand is the best way to acquire shares, assets, intellectual property rights.
WILLIAMS & ASSOCIATES offers the following corporate figures in New Zealand:
LIMITED LIABILITY COMPANIES
Limited liability companies in New Zealand, are the most popular and efficient business structure, because it builds trust in the investment by controlling the relationships between shareholders and directors, giving to the shareholders a clear idea to whom and to what they are giving their investments.
Limited liability companies are similar in the structure of other countries; however, its members are not personally responsible for the Company debts or its juridical obligation.
It is very important to highlight that the first year is not tax exempted; limited liability company’s worldwide incomes could be taxable in New Zealand, depending of the income source as well for the double taxation agreements between New Zealand and the country which those incomes are coming from.
LIMITED LIABILITY COMPANIES BENEFITS IN NEW ZEALAND:
- It is not a requirement to have an initial equity for the incorporation of the company.
- The investor can immediately become a shareholder
- The investor can sell freely the shares to a third party
- Shareholders have limited responsibility
They are very practical for interested investors, giving that feeling of trust to the shareholders.
LOOK THROUGH COMPANY (LCT)
In December 2010, under legislative initiative of New Zealand the new corporate figure called Look Through Company, was created and in forced in 2011.This kind of corporate structure are considered as an intermediary of incomes, expenses and losses to its shareholders. All the incomes directly flows to its shareholders, meaning that look Through Company non-resident shareholders are exempted to pay taxes in New Zealand, as long as the company’s earnings are from overseas activities.
There are no business restrictions for a Look Through Company, as a limited liability Company with other benefits, it is allowed to open bank accounts in any part of the world as well in New Zealand, including trade actions, own assets, become a shareholder of other companies, etc.
Since the Look Through Company is a taxed entity of New Zealand, it enters in the jurisdiction of the laws of double taxation agreements signed by New Zealand.
- Should be composed by no more than five shareholders.
- Shareholders are physical non-resident persons.
- Should be registered in the Finance Department of New Zealand under the structure Look Through Company.
- Shareholders will receive their earnings/losses from non-NewZealander sources.
Look Through Companies as a corporate figure is exempted tax payments. Shareholders should make their earnings/losses tax declaration; any earning will be taxed according to their tax structure, however for international taxation, non-resident shareholders are not responsible for tax payment in New Zealand, which is an excellent incentive for tax planning.
This kind of corporate figure is for those who needs to maintain a corporate image, to have registered a Company in one of the best countries in the world (member of the OCDE), to increase international business credibility.
In order to maintain privacy, businessman can use a director and a nominative member.
FINANCIAL SERVICES ENTITIES
Most jurisdictions discourage the establishment of new Banks, due to some excessive requirements, regulations and procedures.The registration in New Zealand of a Financial Services Provider Entity becomes an alternative, offering a modern juridical frame.
Williams & Associates as established alliances, with several New Zealand entities, to provide trust services to our clientele according to their needs.
If the financial services are not offered to the public in New Zealand, all the investment requirements, supervision and declarations are not applicable, according to the Part II of the Financial Market Authority Law of 1978.
A Financial Market Entity is able to: accept bank deposits, maintain and invest money, to accept values and portfolios on behalf of a third parties, to provide credit under the figure credit contract, to provide money and values wire transfer, to issue and handle form of payments, to grant an issue financial guarantees in foreign currency, to enter in commerce trade, stocks and over the counter markets, on behalf of a third party, in order to develop the following activities:
Money market instruments (including checks, letters, and deposit certificates)
Foreign currency (including long medium or short term contracts), money market instruments, with yielding interest, swaps and securities, as well other bank instruments and negotiable financial assets.
The Authority of Financial Markets and the Registry, has considered that the Financial Service Provider Entity, should have a physical presence and address in New Zealand, in order to be able to offer financial services, as well allow the New Zealander authorities to visit the facilities in case of an investigation, claims, to the Company and/oran employee.
Most recent decisions for this kind of corporate figure, indicates that should be a business and administrative head office in New Zealand, it is not allowed only to create the corporate figure with a virtual office as well through a third party address as a law firm or accountable firm.
It is also a requirement that a financial service entity should perform all its operations from New Zealand, although their clients re allow to be out of New Zealand’s jurisdiction.
Trusts are allowed to make trade exchanges, to invest in any kind of assets, to buy and sale properties, to invest in foreign countries, to participate in value stocks.
In 2007, according to the Income Tax Act, New Zealander Government has approved that any non/resident in New Zealand, who establishes a Trustee, can use the trust to retain assets, invest in commercial transactions, trade exchanges, and be exempt to pay taxes, as long the trust do not carry out any commercial activity that are not tax exempted.
Any foreign trust in New Zealand requires at least one resident trustee and/or a New Zealander Company, which is specialized in Private Trust, which is a Limited Liability Company created exclusively to manage foreign trusts.
- A resident and physical trustee and/or New Zealander Company
- At least one beneficiary
- The creation of a Trust is when the New Zealander Company and/or the trustee are able to act as a corporate trustees, and the trust is established by contract/document in which are established the trustee’s and beneficiary’s duties.
ADVANTAGES OF TAXATION LEGISLATION
Under the New Zealander legislation for Tax Income, when a non/resident establishes a Trust with a New Zealand resident in which all incomes are derivate by the Trust, are exempted to pay taxes.
- If the beneficiary receives the tax distribution from a foreign Trust and is a non/resident in New Zealand, the beneficiary should only pay income tax for his incomes originated in New Zealand.If the funds are invested in no/resident trusts outside New Zealand non tax will be pay over the incomes in New Zealand.
- There are no taxation over capital earning in New Zealand, any trust capital increase is tax exempted.
- New Zealand’s Trusts is recognized worldwide
- All foreign trust is exempted for financial audits
- It is not required to governmental registration
ADVANTAGES OF A CORPORATE TRUST:
- Limited responsibility for shareholders.
- Shareholders confidentiality to be nominated.
- Authorize to trade commercially at zero interest rate, since the commercial contracts can be done in the name of the trust.
- Funds transfer possibility by changing the participation structure.
- Open a bank account and be able to do all company’s activities in the name of the trust, in other words, the Trust it is considered as a Limited Liability Company in New Zealand, because does not require to reveal the names of the trustee and/or beneficiary for be a foreign trust.
For further information contact us in our contact page or calling the number +507-397-1700.
Marco Williams de Souza – WILLIAMS & ASSOCIATES