Overseas Director for an NZ Company: What the Law Requires

The Overseas Director Rule

Under the New Zealand Companies Act 1993, every NZ limited company must have at least one director who is ordinarily resident in New Zealand or Australia. If you are based overseas, you need a local resident director - either yourself (if you live in NZ or AU) or a third party.

What "Ordinarily Resident" Means

The test is where you have your permanent or long-term home, not where you hold citizenship. A New Zealand citizen living in London is not ordinarily resident in New Zealand. An Australian permanent resident living in Sydney satisfies the requirement.

Options for Overseas Directors

1. Appoint a local co-director - A trusted partner, family member, or colleague based in New Zealand or Australia
2. Use a nominee director service - Law firms and company secretarial services offer nominee directors who satisfy the residency requirement for a fee
3. Relocate - If you intend to run the business from New Zealand, establishing residency solves the problem permanently

Risks of Getting It Wrong

If your company does not have an ordinarily resident director, the Registrar of Companies can remove the company from the register. A commercial lawyer can help you structure the directorship correctly before you incorporate.

Other Requirements for Foreign-Owned NZ Companies

• No restriction on overseas shareholders owning 100% of an NZ company
• Overseas Investment Act approval may be needed for certain land or business acquisitions
• Tax residency is determined separately by IRD - incorporation in NZ does not automatically make the company NZ tax-resident
• Anti-money laundering (AML/CFT) requirements apply to some professional advisors you work with

A commercial lawyer who works with international businesses can guide you through the setup. Find a New Zealand commercial lawyer who specialises in company formation for overseas investors.