In recent years, we have seen an increasing number of enquiries from Japanese companies regarding expansion into New Zealand (NZ). While overseas expansion was previously more common among large corporations, enquiries are now increasingly coming from owner-operated businesses, small and medium-sized enterprises (SMEs), and start-ups.
There are various ways Japanese companies enter the NZ market. Some establish a small local subsidiary as an overseas base for their Japanese parent company and begin by dispatching one representative from Japan to conduct market research and business development activities. Others acquire existing local businesses, such as restaurants or retail stores, and leave day-to-day operations to local staff.
This article outlines some of the key practical considerations Japanese companies commonly face when expanding into NZ, particularly in relation to company establishment, business acquisitions and Mergers and Acquisitions (M&A), and visa options.
Methods of Entering the New Zealand Market
There are several ways Japanese companies can establish a presence in NZ. Broadly speaking, however, they generally fall into two categories: establishing a new company, or acquiring an existing NZ business.
In the case of a new establishment, a company is incorporated in NZ and used as the base for business operations. Alternatively, an existing NZ business may be acquired, allowing the purchaser to take over an already operating business.
Which option is more suitable depends on various factors, including the industry, budget, speed of market entry, and visa strategy.
Difference Between a Subsidiary and a Branch
When establishing a presence in NZ, one of the first considerations is whether to establish a local subsidiary or operate through a branch.
A subsidiary involves incorporating a separate legal entity in NZ. In most cases, this takes the form of a limited liability company. The NZ subsidiary is treated as a separate legal entity from the Japanese parent company.
This is the most common structure used in NZ, and in practice it is often easier for local subsidiaries to open bank accounts and enter into agreements with local counterparties. A subsidiary structure may also be more suitable where the company intends to hire local staff or expand its business operations in NZ over time.
By contrast, a branch operates as an extension of the Japanese parent company. Rather than establishing a separate NZ company, the Japanese company registers itself in NZ as an “Overseas Company”.
A branch structure can be advantageous where the Japanese head office wishes to maintain closer control over operations. However, contractual and legal liabilities may extend directly to the Japanese parent company. In addition, some banks and counterparties may prefer dealing with a locally incorporated NZ entity, rather than a branch.
Ultimately, the decision between a subsidiary and a branch is not simply a legal or corporate structuring issue. It is often closely connected to the Japanese parent company’s tax, accounting, and broader group strategy. In practice, these matters are commonly considered together with Japanese tax advisers and NZ accountants.
Company Incorporation Process
In NZ, companies are incorporated online through the New Zealand Companies Office website.
The process begins with selecting and reserving a company name after confirming that no similar name already exists. Formal incorporation documents are then lodged, including information relating to the company’s directors and shareholders.
One important point is the director residency requirement. An NZ company must have at least one director who either resides in NZ, or resides in Australia and is also a director of an Australian company.
There is no minimum capital requirement in NZ. A company may also be incorporated without adopting its own constitution, in which case the default rules under the Companies Act 1993 will apply. If multiple shareholders are to be involved, such as in a joint venture with a local company, a shareholder agreement may become important.
Compared with Japan, the incorporation process itself is relatively straightforward. However, due to strengthened AML (anti-money laundering) requirements in recent years, opening a bank account can sometimes take considerable time. In particular, directors are often required to attend the local bank in person as part of the verification process.
It is also necessary to obtain an IRD number (tax number) after incorporation. In addition, NZ has a 15% Goods and Services Tax (GST), and GST registration is generally required where annual turnover is expected to exceed NZD 60,000.
For more on Company Basics in NZ, read our guide here.
Business Acquisition as an Alternative
When people think about entering the NZ market, they often imagine establishing a new company from scratch. In practice, however, acquiring an existing business is also very common.
This is particularly the case for restaurants, cafés, retail stores, cleaning businesses, and other service-based businesses.
An important distinction in NZ is that “buying a business” is not necessarily the same as “buying a company”.
In NZ, a structure commonly referred to as a “Business Purchase” is frequently used. Under this structure, the purchaser acquires business assets such as plant and equipment, stock, customers, goodwill, and operating assets, rather than purchasing the company itself.
One advantage of this structure is that it may reduce the risk of inheriting the seller company’s historical liabilities or tax issues. However, certain agreements — such as key operating contracts, leases and franchise agreements — may still require supplier, customer, landlord or franchisor consent before they can be transferred to the purchaser.
M&A (Share Purchase)
By contrast, in a Share Purchase transaction, the purchaser acquires the shares in the company itself.
One benefit of this structure is that contractual relationships, customer arrangements, and employment relationships can often continue with minimal disruption. Share Purchases are commonly used where the target business operates multiple sites or has a more complex business structure.
However, because the purchaser acquires the company itself, there is also a risk of inheriting historical tax liabilities, employment issues, off-balance-sheet liabilities, and litigation risks.
For this reason, due diligence (DD) is extremely important in Share Purchase transactions. In addition, where there are multiple shareholders involved, a new constitution and Shareholders’ Agreement for the existing company may also become important.
One important distinction between a Business Purchase and a Share Purchase is the structure through which the NZ operations will be carried on. In a Business Purchase transaction, the purchaser will generally need to establish either a subsidiary or a branch through which the business assets are acquired and operated. By contrast, in a Share Purchase transaction, the acquired company itself may continue operating as the purchaser’s NZ subsidiary, meaning that it may not be necessary to establish a separate NZ entity.
In practice, smaller transactions often proceed as Business Purchases, whereas larger or more complex transactions are more likely to proceed as Share Purchases.
NZ Expansion and Visa Considerations
When entering the NZ market, companies must consider not only how the business will operate, but also who will be sent to NZ.
One visa category commonly used during the initial stages of expansion is the Specific Purpose Work Visa (SPWV).
The SPWV is used where a person comes to NZ for a specific purpose or event. It is commonly used for expatriate or representative-style arrangements, including market research, establishment of local subsidiaries or branches, and project management activities.
On the other hand, once the business becomes more established and the company wishes to continuously employ overseas personnel, the Accredited Employer Work Visa (AEWV) framework may become relevant.
Under the AEWV system, the NZ employer must first obtain Accredited Employer status from Immigration New Zealand and satisfy various requirements, including appropriate employment agreements and market-rate remuneration. In particular, where companies intend to recruit migrant workers, including Japanese nationals holding temporary visas, the AEWV is often the primary visa pathway used in practice.
Conclusion
Expanding into NZ is no longer limited to large corporations. In recent years, we have increasingly seen smaller businesses and owner-operated companies exploring opportunities in the NZ market.
At the same time, company establishment, business acquisitions, M&A, visas, tax, property and employment law issues are all closely interconnected. The way these matters are structured at the beginning can significantly affect the success and efficiency of future operations.
For Japanese companies in particular, there are often additional considerations arising from the relationship with the Japanese parent company and the use of expatriate staff. For this reason, it is generally advisable to seek NZ professional advice at an early stage of the process.
This article is provided for general informational purposes only and does not constitute legal advice. The information provided may not be applicable to your specific circumstances. You should seek independent advice from a qualified New Zealand lawyer before making any investment or immigration decisions.
Please feel free to contact us by email immigration@parryfield.com or by phone 03 348 8480.
May 2026
