New Zealand

New Zealand is a country with a extremely business friendly economic system. Banking, legal and accounting services are of very high quality and with modern communications through high speed Internet, and telecom systems access is almost instantaneous. New Zealand is located half way between Singapore and the USA (i.e. with overlapping business hours) and 12 hours ahead of Western Europe (10 hours in the New Zealand winter/European summer).

The main structure being used within the international business and investment world is the New Zealand foreign trust. Provided settlor and assets are outside New Zealand, such a trust does not need to file a tax return in New Zealand as its earnings are not subject to New Zealand tax. However, the trustee has to inform the New Zealand authorities of the name of the trust and the trustee but does not have to disclose the name of the settlor and/or beneficiaries. We generally use a dedicated company as trustee for each trust. The New Zealand resident trustee has to keep a minimum of information on file and make it available to the New Zealand authorities when requested by a foreign government.

The one exception to this very limited exposure is for Australians. We have to disclose the fact that there is an Australian settlor of a trust and the New Zealand authorities will inform the Australian Tax Office of the existence of such a trust. Other governments will only be informed if they, under the information clause of a treaty for the avoidance of double taxation or under a tax information exchange agreement, ask for information about a specific trust (i.e. not as a result of a general fishing expedition). As the names of settlors and beneficiaries are not disclosed, there is no risk of disclosure to other governments under current legislation.

Recently, New Zealand has introduced two new potential structures, the Limited Partnership (LP) and the so-called Look-Through-Company (LTC). Both are of interest for international parties using the New Zealand jurisdiction.

Advantages of using this jurisdiction are that New Zealand does not look like a "tax haven" such as BVI, Samoa, Cyprus, Jersey, etc., and that it is generally regarded as a high tax paying country. We generally prefer to use these off-shore jurisdictions, if need be, behind the on-shore structures.

Please contact us to obtain more information on New Zealand Foreign Trust NZFT.

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