New Zealand as an Offshore Jurisdiction

To view our PowerPoint Presentation on the New Zealand Trustee Structure, Please click here.

Foreign Trust & Trustee Company Information

The New Zealand Foreign Trust is modeled on the English style of trust, which requires an offshore resident Settlor (we can provide this as standard) and a New Zealand company to act as Corporate Trustee. All income sourced offshore through this company (acting as sole trustee on behalf of the trust) is totally tax free, and there are no capital gains, inheritance taxes or forced heirship. Any income earned within New Zealand (example interest from a bank account) is subject to domestic tax. The income, at your client's discretion can either be retained in the trust, or alternatively distributed to your client's named beneficiaries.

We are aware that most end-users struggle to understand the full details of this very unique structure. For this reason, it is considered acceptable to inform the client only that the company is not liable to pay any form of taxation in New Zealand, provided that it does not do business in, or with New Zealand and that the client has no connection to or with New Zealand.

lMost of our professional clients do not mention the Trust side of the structure to their clients as it is of little importance to them, however, as we will need to create a Trust Deed and name the beneficiaries, the client should be given the chance to name the beneficiaries.

lWe do have a solution to ensure that the client is not named in the Trust Deed, but is placed in a position where the Appointor of the Trust can elevate them to the position of Trustee at any time. We must still know who the end user is.

HOLDING COMPANY

lThere may be many names for this type of company such as Dormant, Non-trading, Zero-rated etc, which can best be described as a company that does not trade, or receive income. This is a simple company type as it can always file a zero return and there are no issues in any way with taxation. Usually this type of company will not open a bank account as the risks become too high where interest may be received and deemed as income.

lA New Zealand Holding Company is a great vehicle for holding non-profit assets at arms length for any number of reasons. Clients often have a genuine and legal desire to hold assets in a company name, especially in a different country.

lWhen a New Zealand Company holds shares as an investment, it will not be taxed on gains from the subsequent sale of shares unless it is in the business of dealing in such investments or acquired the shares for the purpose of sale or where the sale is a part of a profit making undertaking or scheme.

NOMINEE COMPANY

A NZ company is incorporated and enters into an agreement with the offshore company. Under that agreement, which is committed to writing and executed by both parties, the NZ company agrees that it will trade on behalf of the offshore company as its nominee. All contracts of purchase and sale, all the invoicing and all the general correspondence will be made in the name of the NZ company and the NZ company receives all the revenues from such business as nominee for the offshore principal. The agreement should state that all monies received are received as nominee for the principal save insofar as there will be an agreed fee which will be retained by the NZ company. That fee may either be expressed as a flat fee for all the trading done on an annual basis (sufficient to cover the minimal costs) or, expressed as a percentage of the gross revenues received. The standard form is that 1 to 5% of the invoice total in respect of each transaction is retained by way of fee by the NZ company.