Considered one of the most politically stable democracies in the world, New Zealand has recently focused its economic policies and legislation towards the development of its financial system with the government enacting legislation to attract investment from overseas.
Owing to its strong international reputation and economic stability, New Zealand is a highly favourable country to establish a business structure for international trading and asset protection. In fact, New Zealand has evolved to be one of the most comprehensive asset protection and offshore tax minimization jurisdictions in the world.
New Zealand currently has a large number of Free Trade Agreements and Double Tax Agreements with a number of nations, including Chile, Mexico, Spain and the United States. New Zealand’s financial system has a particularly strong reputation internationally and is a full member of the OECD, FATF and the World Trade Organization.
The jurisdiction offers two types of trusts: the foreign trust and the private trust company (PTC).
New Zealand Foreign Trust
A New Zealand foreign trust is meant to be operated by a non New Zealand resident settlor with a New Zealand resident trustee and exhibits the following characteristics and benefits:
- No New Zealand beneficiaries appointed and no New Zealand source income
- Trust lifetime is up to a maximum of 80 years
- Delegation of responsibilities to other advisors or co-trustees, which can be foreign entities, is allowed
- The trust may apply any Double Tax Agreements (“DTAs”), entered into by New Zealand and other territories
- No tax reporting or disclosure as to the existence of the trust is required
- No registration or filing of the trust is required with any public body
- No audit of the trust is required
- Financial statements must be maintained by the trust company in New Zealand, but it is not mandatory for those statements to be prepared by the New Zealand trustee
- No filing with any New Zealand authority is required
New Zealand Private Trust Company (PTC)
Clients may also incorporate as a PTC in order to operate as trustee of a New Zealand Foreign Trust, with non New Zealand resident settlors. The PTC is considered to be a resident after its incorporation. A PTC offers the following features and advantages:
- The client can provide the officers of the PTC and direct all activity of the PTC without any outside involvement
- The business of the Foreign Trust is carried out by the directors of the PTC
- A PTC can act as trustee of several Foreign Trusts
- No resident director is required
- Compliance requirements include the filing of company tax accounts with the New Zealand Inland Revenue, and the audit of the PTC's accounts and deposit of the audited accounts with the New Zealand Companies Office
Harneys has an agent in New Zealand and we are able to provide our clients with services including the incorporation of New Zealand companies, the setting up of trusts (including Foreign Trusts) and the establishment of Private Trusts Companies. We work with our clients to understand their needs and advise them on the most appropriate and beneficial solutions available in this market.