There are essential requirements that must be met under New Zealand law in order for a company to be incorporated. One such requirement is that a company must have at least one director. In this article we will explain what exactly is needed and who can qualify.
Before doing that it is worth noting that a company must also have a name, one or more shares (equity) and one or more shareholders. These essential requirements must be met in order for a company to exist.
We often get asked whether the directors of New Zealand companies have to be in New Zealand. The simple answer is yes, generally speaking, they must be a resident in New Zealand.
However, directors of New Zealand companies can also be living in Australia, provided they are also a director of an Australian incorporated company. This is because Australia is an “enforcement country” that New Zealand has reciprocal arrangements with.
Apart from that exception – who counts as a “resident director”? It has been accepted by the High Court that it is someone physically present in New Zealand for a minimum of 183 days per year.
However, if this 183 day test has not been met, it may still be possible as other relevant factors include:
- The amount of time spent in New Zealand;
- The person’s connection to New Zealand;
- Their ties to New Zealand; and
- The person’s manner of living when in New Zealand.
In summary, a director needs to be someone living in New Zealand (generally for at least 183 days). Additionally, directors can be persons who live in Australia if they are a director of a company incorporated in Australia. People can also be directors even if they have not been in New Zealand for 183 days provided they have strong connection or ties here.
We help many companies get set up and can answer other questions you may have about that. Also check out our guide to Doing Business in New Zealand.
This article is general in nature and is not a substitute for legal advice. You should talk to a lawyer about your specific situation. Reproduction is permitted with prior approval and credit being given back to the source.
We help with capital raising and answering questions all the time. If you would like to discuss further, please contact one of our team on stevenmoe@parryfield.com michaelbelay@parryfield.com sophietremewan@parryfield.com or yangsu@parryfield.com at Parry Field Lawyers
