New Zealand to Investigate Company Registration Overhaul

January 22, 2010 Taxation in New Zealand

Beehive reflected in Government Building @ WellingtonThe New Zealand Government has announced that it will launch an investigation into the possibility of reforming the national company registration process in the wake of controversy surrounding a New Zealand company’s involvement with North Korean weapons smuggling.

Simon Power, Commerce Minister of New Zealand, issued a press release on January 21st stating that he is requesting feedback from officials and industry figures regarding whether any aspects of the New Zealand company registration process can or need to be strengthened. Prime points of investigation will be whether New Zealand-registered companies should be required to have a New Zealand resident director, if directors should be required to provide full identification information, whether Inland Revenue Department (IRD) numbers are to be mandatory upon registration, and if the Company Registrar should be able to suspend registrations in cases where the integrity of provided information is brought into question.

The Commerce Minister stated that he is primarily interested in treatment of New Zealand companies (especially dormant companies) that with only overseas directors and shareholders. There were 56 such companies registered in New Zealand since January 1st, from a total of 1 125 companies already registered this year. The Minister continued on with assurance that he does not intend to instate radical sweeping changes before a thorough investigation is completed. Commenting on this further, he said “We don’t want to move to a situation where legitimate businesses are faced with increased compliance and where it’s harder to start and operate a company.”

The country’s company registration process has come under international scrutiny lately when it was found that a New Zealand registered company had chartered a plane which was caught smuggling 20 tones of weaponry from North Korea. There are several other cases where a foreign-held New Zealand-registered company was alleged in participating in suspicious or illegal activities.

Photo by Remon Rijper