In Box: NZ registered companies take note

“New Zealand has been one of the easiest places in the world to incorporate company online,” says DLA Phillips Fox in recent newsletter summarising some key changes to company incorporation.
“However, New Zealand incorporated companies have been involved in number of less than savoury activities. Transporting North Korean arms is one high profile example.”
Such incidents have been part of the driver for key changes to the requirements for incorporating company with an overseas shareholder. All New Zealand registered companies should take note.
• The Companies Office has recently had its powers to reject company registrations with an overseas shareholder confirmed.
• The Companies and Limited Partnerships Amendment Bill has recently been reported back from Select Committee. It has also tightened the regime.
Amongst the changes now in place or likely to be put in place:
• The Companies Office seeks ‘additional verification documentation’ for all online incorporations which have overseas shareholders and directors (except where those people/entities are domiciled in Australia – and even then it sometimes requires this).
• Under the Bill (if enacted) all New Zealand registered companies would have to have director resident in New Zealand or in prescribed country which has agreed to enforce relevant New Zealand laws/fines and is director of company incorporated in that jurisdiction. Australia is currently the only country which enforces this.
There will be requirement for directors to disclose their date and place of birth – which would be kept confidential.
There will be requirement to disclose the company’s ultimate holding company (if it has one) and keep this information up to date. Companies will need to put in place compliance processes to ensure that this requirement is complied with.
The law firm advises it is likely that the Bill will be passed into law in the near future. Provisions dealing with the above matters are likely to come into force six months after the date on which the Act receives royal assent. There is further six month transition period for existing companies to comply with the new requirements relating to directors.
Contact DLA Phillips Fox partner [email protected] for further information. M