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New Zealand Financial Service Provider Company

panama-tiny   Read about the Panama Financial Services Company as an alternative.

What is a New Zealand Finance Service Provider?

Following the protocols formalized by the Financial Service Providers (Registration and Dispute Resolution) Act of 2008, New Zealand legislation enables the registration of NZ companies as Financial Service Providers (FSP).

A New Zealand FSP, also known as a New Zealand Offshore Finance Company, however, this usually refers to an unregistered NZ Company, one that has not registered as an FSP.

UPDATE: We have stopped recommending NZ Financial Services Company due to the onerous process and recent changes to NZ law that have created significant obstacles in establishing an NZ FSP. In an effort to clean up its offshore finance industry the government has created a registration process that is costly, time-consuming with high local requirements that deter most all of our clients away. 

NZ has made a requirement that all FSPs must have a local NZ Director. Unfortunately, the person must be more than a nominee director but a full trusted business partner. While this fine for Australian or New Zealander residents, for everyone else a NZ Financial Company is not recommended.

Table of Contents:

financial company

Why be a Service Provider?


  • A NZ financial service company can offer banking and other financial services to both private individuals and corporations worldwide, with no limitations on the number of customers, amounts on deposit or number of currencies.
  • The company is not subject to capital reserve requirements and there are no minimum capitalization requirements.
  • There are no restrictions on public solicitations and web sites being open to the general public.
  • Directors and shareholders can be of any nationality and reside anywhere except all NZ companies are now required to have at least one local Director


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List of Financial Activities Permitted

Activities of an FSP can include, but are not limited to the following services:

  • Deposit taking & lending
  • Debit and credit card services
  • Issuing of financial guarantees and instruments
  • Cash management services
  • Current accounts
  • Cheque (Checking) accounts
  • Term deposits
  • Wire transfer services
  • Payment processing services
  • Custodial services
  • Forex Trading

Other activities that require additional licencing and paid-in capital requirements include any financial services that has to do with securities, derivatives, commodities and futures contracts.

Banking and Investment Options

  • New Zealand-based banking options can be provided. New Zealand has historically offered far higher deposit interest rates than most other Western countries. High rates of interest are available in New Zealand for deposits in the range of 7.75% - 10.5% for 12 months. As of 2014 these rates are in the range of 4-5%. The latter creates some safe scenarios for accepting deposits from clients and paying a lower rate of interest to them, with the FSP capturing the difference.
  • Alternatively the FSP could invest directly into New Zealand Government Treasuries. As an indication (as at May 2007) Government Official Cash Rate (OCR) was 7.75%.


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Things to Consider About an FSP

  • New Zealand Financial Service Companies can operate in a similar way to fully licensed banks, but the word 'bank' or any of its derivatives or translations cannot be included in the name.
  • To be formally registered as an FSP in New Zealand, a local office, a local director and an office manager is required to run it and represent the company in NZ. This does add some overhead to an operation that is only just beginning, but it is perfectly legal to start operations and then register the FSP once the business can justify it. The best way to do this now would be to obtain an inexpensive offshore licence such as the Vanuatu SDL licence and then "passport" it to New Zealand by forming a NZ Limited Partnership and then having the two partners as the Vanuatu (or other offshore licenced company) and a NZ company.
  • The offering of what the NZ Reserve Bank refers to as "debt securities"  (i.e. fixed or variable interest rate term deposits) will require a special license from them, but there are a number of exemptions and other ways to bypass these requirements. However, anything to do with securities clearing, investment management, hedge funds, derivatives etc. will require further licencing.
  • If 25% or more of the shares are owned by an offshore company then annual audited accounts will be required.
  • If an annual audit is not desired shareholders who are foreign persons rather than companies can be appointed or a NZ Trust with a nominee resident trustee can be set up for greater privacy.
  • If New Zealand-based banking options are desired, they will require a local visit, and would only consider opening an account for a fully registered FSP with a local office operation.

Financial Service Provider Regulations

financial company

Although the FSP is not subject to Central Bank supervision and regulation, its activities are regulated by several acts including:

  • Financial Service Providers (Registration and Dispute Resolution) Act 2008
  • Credit Contracts and Consumer Finance Act 2003
  • Electronic Transactions Act 2002
  • Personal Properties Securities Act 1999
  • Financial Transactions Reporting Act 1996
  • Investment Advisers (Disclosure) Act 1996
  • Companies Act 1993
  • Consumer Guarantees Act 1993
  • Proceeds of Crime Act 1991
  • Reserve Bank of New Zealand Act 1989
  • Fair Trading Act 1986
  • Securities Act 1978
  • Unclaimed Money Act 1969
  • Cheques Act 1960
  • Property Law Act 1952
  • Bills of Exchange Act 1908

The requirements of these regulations are not onerous and, in most cases, have little or no impact. In fact, these requirements should provide potential clients of a properly run FSP with a high degree of comfort. At the same time, the FSP can provide a high level of confidentiality, because the Reserve Bank does not act in any overseeing capacity.

Please however note the New Zealand FMA has full jurisdictional control over the FSP both in the initial review of the application as well after approval.

Taxes on the FSP

As part of our package, we can provide the necessary registration so there will be no non-resident withholding tax deducted at the source, but instead a minimal 2% levy. This is the 'Approved Issuer Levy' structure where the FSP is registered as an Approved Issuer.

A NZ FSP is subject to taxation on its worldwide income at standard NZ corporate rates which are quite high, unless it obtains a LTC election from the NZ IRD which requires foreign persons as shareholders rather than a corporation or a NZ Trust with a resident trustee.

However, the tax can be largely eliminated by using an offshore investment company and/or a licensed Panama corporate structure to handle payment processing on behalf of the FSP. Taxable income can be shifted to these offshore vehicles through this outsourcing method.

For more>> NZ as a Tax Haven

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***Please Note: If you are a resident of a country that is a signatory of the Common Reporting Standard (CRS) (or a US citizen) your tax reduction possibilities are limited. Due FATCA, CRS, and CFC laws you may not be able to completely eliminate your taxes without moving your residence. While opening an offshore company can increase privacy and asset protection, your tax obligations remans tied to your ownership of overseas entities. Offshore company's are often not taxed in the country where they are incorporated, rather you as the owner are obligated to pay taxes in the country where you reside. Please make sure you know your tax obligations, as we are not tax advisors. Please seek a local tax professional for help regarding your situation. 

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