New Zealand Offshore LLP Incorporation Structure
Overview of a New Zealand Limited Liaiblity Partnership
New Zealand offers a number of attractive company formation products that give clients a wide range of international investment opportunities.
The New Zealand Limited Liability Partnership (LLP) is a relatively new, yet comprehensive, company formation vehicle that has been one of New Zealand’s more popular formation products.
It emerged with the passing of the Limited Partnerships Act 2008 as a means to diversify and increase international investment opportunities.
What is a NZ Limited Liability Partnership?
One of the main advantages of a New Zealand Limited Partnership is that investors benefit from being taxed as a partnership (a limited partner’s income generated outside of NZ though the company is tax-free) while still providing the protection of limited liability and maintaining a separate legal entity from the owner of the company.
New Zealand’s primary objective in establishing the limited partnership company was to make it look more attractive to potential foreign investors and venture capitalists.
The government hand picked some of the best features of other offshore and LP regimes and integrated them into their own system, such as the ability of establishing a company with a minimum of regulatory provisions, no limits concerning the duration of the company partnership and no capital requirements.
The New Zealand LP has been well-received by the wider international financial community, as New Zealand is not traditionally seen as an offshore financial centre, nor is it labelled as a ‘tax haven’.
So while the jurisdiction retains many of the advantages that come in a well-established offshore jurisdiction, it does so without any of the negative associations.
Many private banks, trust companies and other offshore corporations are increasingly facing obstacles from critical foreign governments, revue authorities and financial regulatory organizations (such as G20, OECD and FATF) that “blacklist” certain offshore financial centres.
The promise of retaining the competitive offshore advantage, in a jurisdiction that has a traditional tax-based structure, remains high.
New Zealand also offers a very attractive Non-Bank NZ Financial Company as well as a Asset Protection Trust, that has gained moment the last years and has been quiet successful in attracting attention.
For more information on the Advantages of New Zealand as an Offshore Financial Center, click here.
Advantages of a New Zealand Offshore LLP
New Zealand provides all the advantages of traditional offshore financial centre, but is primarily recognized as a mainstream onshore financial centre. Additional benefits are:
- The OECD does not perceive NZ as being an unlawful tax jurisdiction, is not normally associated with a tax haven, and has never been blacklisted by any authority
- A NZ LP has hand picked and integrated some of the best features taken from other similar jurisdictions
- No duration of the partnership limits
- There are no limits to the number of partners required for a NZ LP
- There are no investment requirement limits
- The country is an active member of a large number of international organizations including the Organization for Economic Cooperation and Development (OECD), the World Trade Organization, and the World Bank
- New Zealand is a member of the British Commonwealth, and has a common law system with the majority of legislation including trust law having been founded on British law
- It is not a member of the EU, and is not influenced by the EU Savings Tax Directive and any future developments
- There are no foreign exchange controls in New Zealand
- It is possible to obtain residency status in New Zealand through investments; the government generally welcomes foreign investment, and enables easy relocation processes
- Nominee Services are available
- The LP can be used for almost any legal business activity
- Separate legal personality
- Special Tax treatment of limited partners
- Details of the limited partners and partnership agreement are confidential
- Limited liability is available for limited partners
- Offers a tax-free structure in a traditionally high-tax jurisdiction
- Limited partners who do not reside in NZ are not be subject to tax on their share of income generated by the LP
Top Uses of a Offshore LLP
A New Zealand LP can be used for almost any purpose and is well-suited for:
- Investment purposes
- High-risk projects
- Large capital investment holding opportunities
- Flexible arrangement for international investors
- Venture capital investing
- Private Equity
- Underlying asset holding vehicle for a NZ Trust
- International wealth structuring and collective investment purposes
Key Corporate Features of a New Zealand Limited Partnership
|New Zealand LP||Corporate Details|
|Type of Entity||Limited Partnership (LP)|
|Type of Law||Based on English Common Law, with unique differences and local statutes|
|Governed by||Limited Partnerships Act 2008
Companies Act 1993
Financial Reporting Act 1993
Companies and Limited Partnerships Amendment 2014
|Registered Office in New Zealand||Yes|
|Shelf company availability||Yes|
|Time to establish a new company||2 weeks|
|Minimum government fees (excluding taxation)||NZD 270.00|
|Access to Double Taxation Treaties||No|
|Share capital or equivalent|
|Standard currency||New Zealand Dollar NZD|
|Minimum paid up||No minimum|
|Usual authorized||NZD 1,000|
|Directors | Officers | Partners|
|Minimum number||2 (1 limited partner, 1 general partner)|
|Local required||Yes (1 general partner/director)|
|Publicly accessible records||Yes (although limited partner details are confidential)|
|Location of meetings||No|
|Corporate directorship allowed||Yes|
|Local or qualified||N/A|
|Requirements to prepare||Yes|
|Requirements to file accounts||Yes|
|Publicly accessible accounts||Yes|
|Recurring Government Costs|
|Minimum Annual Tax||NZD 270|
|Annual Return Filing Fee||NZD 20
|Requirement to file annual return||Yes|
|Migration of domicile permitted||Yes
New Zealand LLP Company Registration Product Package
- Government Registration Fee (First year)
- Registered Office Address (First year)
- Registered Agent Services (First year)
- Company Secretarial Maintenance
- Certificate of Organisation
- Articles of Organisation
- Minutes of First Organisers Meeting
- Ownership Certificates
- Register of Members
- FREE Phone and/or email consultations
Requirements for a New Zealand LP Company Formation
There are few requirements for registering an NZ Limited Partnership, which are straightforward. The application form requires:
- Proposed name of LP
- The certification from a general partner/agent that the partnership agreement complies with the Limited Partnerships Act
- Details of its registered office, address for service, postal address and email address
- Details of the General Partners
- Details of the Limited Partners
- Full name, postal address, email address, telephone number and facsimile of the presenter.
Each application must be accompanied by a:
- A prescribed form of consent signed by every General Partner or that person’s agent authorised to do so in writing, consenting to be a General Partner
- Registration fee of $270
Taxation of a Limited Partnership in New Zealand
A NZ LP is a separate legal entity for business purposes, but is not treated as such for income tax purposes. Meaning the LP cannot be assessed separately for income tax, rather the partners are liable to being taxed based on their income received from the LP. Therefore, Limited Partners who are not resident in NZ will not be subject to tax in NZ on their share of the income generated by the NZ LP, provided that the income does not originate in NZ.
Limited partnerships provide clients and investors with the protection afforded by limited liability status, which is combined with the benefits that come with a transparent tax status. Transparency is achieved by attributing income of a partnership to one of the partners in accordance with the partners’ share. If a partner is non-resident of NZ and the income does not originate in NZ, then the partner will not be subject to being taxed. This makes NZ LPs particularly attractive for international clients as it provides a tax-neutral space for investments.
Corporate Details of a New Zealand LP
Anonymity, Confidentiality and Disclosure
No details of the Limited Partner are made public and are not on the register of Limited Partnerships. No details will be made available regarding the investors of the Limited Partnership. Only the general partners details are disclosed to the public.
The standard authorised capital for a NZ LP is NZD 1,000. There are no statutory requirements for the capital to be fully or partly paid on incorporation. Capital contributions can take any form including services.
Directors | Officers | Partners
New Zealand LP’s require a minimum of two (2) partners, who may be natural persons or corporate bodies from any legal jurisdiction. A NZ LP is an incorporated entity that is separate from its partners, having at least one (1) general partner and at least one (1) limited partner. There are no maximum limitations as the number of directors or partners for the NZ LP.
The passing of a new Companies and Limited Partnerships Amendment 2014 requires that one of the general partners/directors (either a individual or corporate body) be a New Zealand resident or a director who is also a director of a company incorporated in, and who also lives in, a country with which New Zealand has reciprocal enforcement arrangements an “enforcement country”. (The list of appropriate enforcement countries are yet to be disclosed, but it has been rumoured that that list will include the US, UK and Australia)
Each New Zealand L.P. must file a Register of its partners with the New Zealand Companies Registration Office. Though all partners’ details must be registered, only the general partners details are made public.
- General Partner – A General Partner is involved in the management and day-to-day activities of the LP and is liable for the debts and liabilities incurred by the company. This is held together with any other General Partners and also the LP itself.
- Limited Partner – A limited partner is one whose relations with the company are based around limited liability, who does not have management of the day-to-day affairs, and whose capacity is outlined in the general partner-limited partner agreement. The limited partner may place capital into the LP, similar to shareholders in a company, however its liability for debts capped to the amount of the investment. To limit a limited partner’s liability that individual must not participate in the management of the limited partnership. The 2008 Act sets out various activities that a limited partner can take part in without endangering its limited liability including (1) participating in decisions to admit new partners (2) approving new investments and; (3) acting as director of a general partner that is a corporate body.
New Zealand LPs must have a written partnership agreement between the General Partner and each Limited Partner that contain provisions that include:
- Restrictions of activities that may be undertaken by the partners
- Entitlements to distributions of earnings
- Procedures that lay out the entry and exit of general and limited partners
- Procedure as regards partnership meetings
- A mechanism that outlines the procedure to terminate the Limited Partnership company
- Provisions dealing with possible conflicts of interests
- Description entailing the proposed nature of business undertaken
- Provisions that deal with the financial and audit requirements
Financial Statements required
Yes. A NZ LP is required to keep detailed accounting records and financial statements for the last seven years also need to be kept at the registered office in NZ.
Yes. A NZ LP is required to file annual returns every year.
There are no requirements for a company secretary for a NZ LP
Principal Corporate Legislation
A New Zealand LP is governed through:
- Limited Partnerships Act 2008 (aka, Limited Liability Partnership 2008)
- Financial Reporting Act 1993
- Companies Act 1993
- Companies and Limited Partnerships Amendment 2014
The Limited Partnerships Act 2008 replaces the former Special Partnership regime the major distinction is that a LP is a separate entity and has separate legal status from its owners or partners.
The passing of the Companies and Limited Partnerships Amendment 2014 requires new formalities, which go into affect as of 1 May 2015, that include:
- Requirements that there be a local resident general partner/director of the LP or a director of a company in a prescribed enforcement country
- Directors are to provide their place and date of birth
- Limited Partnerships are to supply holding company details (if applicable)
The changes are meant to increase the confidence in New Zealand’s financial markets and the regulation of corporate forms as the legislation introduces more stringent registration requirements which the New Zealand passed in order to follow the guidelines of the Financial Action Task Force on Money Laundering (FATF) recommendations.
Type of Law
English Common Law and local statutes
There are no exchange controls on foreign exchange transactions
Powers of the Company
The powers of a NZ LP have the same powers as a natural person. A Limited Partnership is an incorporated entity that remains separate from its partners.
Language of legislation and Corporate Documents
Registered Office Required
A NZ LP must have a registered office in NZ. The office must hold documents relating to the partnership agreements and Accounting and financial records of the LP.
Yes. Since the passing of the Companies and Limited Partnerships Amendment 2014, NZ has made it mandatory that a Local NZ Director or an individual resident in an “enforcement country” be required.
Shelf Companies available
Time required to form offshore company
The NZ LP must not have a name that that is identical or almost identical to name of a company that is already registered or that the NZ Register deems offensive.
Language of Name
Names of Company requiring a special licence or permission
A NZ LP names containing words such as “Bank”, “Insurance”, “Trust”, “Fund Management”, “Financial Institution” will not be permitted unless an appropriate operating licence has been obtained.
Permitted limited liability suffixes
The name of a New Zealand L.P. company must end with the words “Limited Partnership” or the suffix “L.P.”
Access to Double Tax Treaties
New Zealand LP companies are not regarded as residents for tax purposes and are therefore not entitled to take advantage of treaties between NZ with other countries.
Limited partners are limited in their liability to the sum that is invested within the company, whereas a general partner is liable together with the company for all debts and liabilities. Although there seems to be a high level of liability, such risk can be eliminated through the use of a limited liability company (LLC), which can be used as a general partner of the LP Company, which is acceptable under NZ legislation and reduces the liability of any single individual.
Government Annual Tax
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