Legislation to Tighten Company Regulations
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Articles by Matthew Gilligan
There is currently legislation before Parliament seeking to tighten up rules around incorporation of companies on the New Zealand Companies Office Register.
In particular, there is concern about companies being incorporated with offshore shareholders and directors, and then being used in criminal activities. A large part of the reason for this concern is that there are no restrictions on who can be a shareholder and director of a New Zealand company, and historically little has been requested in terms of identification for such people.
However, this is changing. Recently the IRD have started asking for identity documents for offshore shareholders and directors, and proof of residential address for the same. This new legislation proposes to go one step further by requiring every company incorporated on the New Zealand Companies Office Register to have a New Zealand-based director. This is very significant.
If you are an offshore director of a New Zealand company and you do not have a New Zealand-based director, then you need to be aware of this new rule. Note that it is not law yet, and when it does become law there will be a six-month grace period for companies that do not comply to get their affairs in order. We will keep you posted.
As always, these comments are of a general nature only and not a substitute for advice on your specific circumstances. Please contact us at GRA if you wish to discuss any aspects of the above.
Matthew Gilligan
Director
© Gilligan Rowe & Associates LP
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Disclaimer: This article is intended to provide only a summary of the issues associated with the topics covered. It does not purport to be comprehensive nor to provide specific advice. No person should act in reliance on any statement contained within this article without first obtaining specific professional advice. If you require any further information or advice on any matter covered within this article, please contact the author.
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