Cutting through the red tape: How to register a business in New Zealand

Registering a business is a common legal requirement and your first step towards commercial success. While the process may seem daunting, you don’t have to conquer a mountain of paperwork to start trading.

In this post, we’re cutting through the red tape to teach you how to register a business in New Zealand. We’ll also provide a list of other handy, related tidbits so you can kick-start your new venture ASAP.

How to register a small business in NZ

The process depends on your business structure. In New Zealand, there are three main structures that have unique legal and financial obligations.

• Sole trader: Primarily for lone operators, this self-employed structure lets you be your own boss and take responsibility for income and losses.
• Partnership: You and one or more partners share ownership of the business, including liability for income and losses.
• Company: A separate legal entity that may have more than one owner, who typically isn’t liable for income and losses.¹

So, which structure should you choose? It depends on your situation and objectives. The Choose a Business Structure Tool¹ can point you in the right direction. Consider hiring an accountant or lawyer for professional advice.

How to register a sole trader business in New Zealand

Good news, tradies, contractors, and solopreneurs. The sole trader structure doesn’t have any formal registration requirements. You need only inform Inland Revenue (IR) that you’re now self-employed.

If you don’t have one, get an IRD number. Next, log in to your IR account:

1. Click “I want to”
2. Select “Send a message” under the “Communicating with IR” section
3. Find “Select an option,” then select “This message is not relevant to a specific account.”
4. Go to the “Select message category” and select “Other.”
5. Enter “Notification to become a sole trader” in the subject line and ask any questions if required.²

Congratulations. You’re now a sole trader. But don’t close this tab just yet, as there’s loads of relevant info to follow, including registering for GST.

Registering a partnership in New Zealand

Popular in sectors like accounting, agriculture, and law, the partnership structure sees two or more people share ownership of a business. Starting a partnership is fairly straightforward.

Inform IR of your partnership through your IR account, and apply for a partnership IR number to pay business income and GST. Partners still pay taxes on their own income using their individual IRD numbers.

Consider creating a partnership agreement detailing things like:

• The amount each partner is investing and owns
• Business property, such as resources, contacts, and real estate
• What roles partners perform
• A dispute resolution process
• How partners will earn income
• What happens when a partner leaves
• How you will sell the partnership

If you plan to hire staff other than partners, you’ll need to register as an employer with IR.³

Registering a company in New Zealand

Starting a company is kind of a big deal. You’ll legally separate yourself from the business, affecting how you pay taxes and deal with the government.

You can register a company through the aptly-named Companies Register.

1. Set up a Companies Register online services account and obtain a RealMe® login.
2. Pay a $10 + GST fee to reserve your company name through your online services account.
3. Gather company documentation, such as contact details, tax, director, shares and shareholder registrations, ultimate holding company declarations, your annual return filing month, and company constitution.
4. Use this information to register the company through your online services account and pay the $118.74 (plus GST) application fee.
5. File the directors' and shareholders' consent forms within 20 business days.
6. Wait for approval to receive your Certificate of Incorporation.⁴

It’s a relatively long and complex process. For detailed information, see our post on how to register a company in New Zealand.

Things to know before registering a business in NZ

Registration is only one piece of the puzzle. There are a bunch of other things you should know before starting.

New Zealand Business Number (NZBN)

The NZBN is an official identifier that verifies your legitimacy to foster trust in your brand. This nifty, 13-digit number also streamlines government interactions, pre-populates online forms, provides real-time contact detail updates, and enables standardised electronic invoicing.⁵

Companies incorporated through the Companies Office automatically receive one.⁴ Sole traders, partnerships, and trusts can apply for a NZBN online.

Registering for GST

Regardless of the structure, every Kiwi entity must register for GST if it undertakes a taxable activity with a turnover of $60,000 or more in the last 12 months. You must also register as soon as you expect your business to achieve a $60,000 turnover in the next 12 months.

Upon registering for GST, you must:

• Charge your customers GST on the sale of all goods and services
• Keep accurate, up-to-date GST records for sales and purchases
• File a GST return by calculating the difference between the GST you charged customers and the GST you paid suppliers for taxable activities
• Pay IR the difference if you charged more GST than you paid
• Receive a GST return from IR if you paid more GST than you charged

To register for GST, gather the IRD number of the relevant person or entity, bank details for a GST refund, and your Business Industry Classification (BIC) code.⁶

Next, log in to your IR online services account:

1. Select the “I want to” tab
2. Select “Register for new tax accounts.”
3. Enter the relevant IRD number.
4. Select “Goods and Services Tax (GST).”
5. Enter your contact and business details.⁷

How to register a business name and trademark

Brainstorm a suitable business name, preferably something catchy and relevant that resonates with customers. Use the ONECheck Tool¹ to see whether the name is available, as well as related domain names, social media accounts, and trademarks.

To start a company, you must register a business name through your online services account. Other business structures, like sole traders and partnerships, can choose to register a trading name when signing up for a NZBN.⁸

Applying for a trademark through the New Zealand Intellectual Property Office can help protect your IP and reputation.⁹

Setting up a business bank account

Whether you’re a sole-trading hairdresser or running a busy inner-Auckland cafe, a business bank account takes the hassle out of day-to-day fiscal chores. From separating personal expenses to automating reconciliations and cash flow management tools, you’ll get a plethora of tangible benefits.

The best business bank accounts in New Zealand offer perks like low monthly fees, booking software integration, affordable international transactions, and multiple bank branches or ATMs. Weigh up the top competitors and work out what works best for you.

Manage your global finances with Wise Business

Designed for Kiwis sending money across borders, Wise Business offers low international transfer fees using the mid-market exchange rate. Integration with top booking applications streamlines day-to-day reconciliations and takes the headache out of tax time.

A Wise Business account allows users to can send, receive, and hold in multiple currencies. Experience hassle-free global transactions by transacting like a local business. Here's what you get with a Wise Business account:

• Free to register — Hold and convert between 40+ currencies. Send to 140+ countries
• Debit cards for you and your team, which you can use in 150+ countries
• Multi-user access for team members, with ways to control and manage permissions
• Pay up to 1,000 recipients at once with the Wise batch payments feature
• Integrate with your favourite cloud accounting solutions like Xero, QuickBooks, and more
• Get account details to receive in 8+ currencies for a one-time fee of 40 NZD

Sign up for the Wise Business account! 🚀

This general advice does not take into account your objectives, financial circumstances or needs and you should consider if it is appropriate for you.

FAQs

How much does it cost to register a business in NZ?
Reserving a company name costs $10 + GST, and incorporating a company costs $118.74 (plus GST).⁴

Sources

1. Choosing a business structure
2. Becoming a sole trader
3. Registering a partnership in New Zealand
4. Incorporating a company in New Zealand
5. Applying for an NZBN
6. Registering for GST
7. How to register for GST
8. New Zealand Business Number
9. Applying for a trademark