Starting a business in New Zealand is actually a fairly straightforward process, and you'll find that following the steps will help you get set up in no time! Here's how to go about setting up your business…
Set Up the Business Structure
When starting a business, you have a number of business structures to choose from:
- Sole traders take all of the responsibility and liability for their company, as well as all the profits. There is no legal paperwork involved.
- Partnerships involve pooling assets with other sole traders, using a business agreement to determine the division of profits and losses.
- Companies are legal entities, which own all the profits and losses. You, as a shareholder, will only have a fraction of the PNL. The company must be registered or incorporated with the New Zealand Companies Office.
Choose a Business Name
You need to come up with a good name for your company, one that is not already in use and which does not contain banned phrases or words.
To find out about company names, you can use:
- OneCheck, an online tool to search domain names, trademarks, and company names all at once.
- Intellectual Properties Office of New Zealand, where you can find out if there is a patent or trademark on a name or logo.
- Companies Office, the governments database of company names.
Only companies and corporations have protection for their business name, but sole traders and partnerships can apply for a New Zealand trademark in order to have exclusive rights to their logo or name.
Register the Business
In order to start doing business, you have to register with the Inland Revenue services. You will also need to incorporate with the New Zealand Companies Office.
First off, you'll need an IRD number, which will allow you to pay taxes. Sole traders file taxes under their own IRD, while partnerships have to apply for a unique IRD for the partnership.
Companies will need a business IRD number, though this will be done via the Companies Office rather than the IRD.
You'll need to inform the Inland Revenue if:
- You expect an annual turnover of more than $60,000 in a year. You'll need to pay a Goods and Service Tax if so.
- You plan to employ people. You'll need to register with the IR as an employer, as well as pay for other business taxes and levies.
As a sole trader or a partnership, you'll only be taxed on the profits you earn. As a company, however, profits will be taxed at the company rate, and you'll be taxed for your personal income.
No matter what type of operation you are going to run, it's highly likely that you will need some form of permits or licenses in order to operate.
You may need:
- Building permits
- Health and safety permits
- A permit to work from home
Depending on your industry, you may be required to work with specialists to ensure you meet regulations. You can find out more here…
The good thing about setting up a business in New Zealand is that the government provides you with all the resources you need to do it quickly and easily. It's not too expensive to set up a company--just $10.22 for the company name reservation and $150 to register the company. Good luck…