The New Zealand government has created a favorable and attractive environment for foreign investors. The nation of two islands has many intrinsically advantageous qualities which makes it an attractive investment jurisdiction. Add to that the government’s tax friendly programs, and New Zealand is becoming a worthy challenger to traditional off-shore investment jurisdictions.
New Zealand is a member of the British Commonwealth, and as such, has a common law legal system similar to the UK. Such a system is advantageous for investors in terms of familiarity with and trust-worthiness of the system. Another inherent advantage for investors in New Zealand is the stable political system and the strong economy. This combination of low level of corruption and a strong economy tied with the World Trade Organization and the Organization for Economic Cooperation and Development (OECD) means that investors can have full confidence in the political and economic environment.
In addition to New Zealand’s attractive qualities stated above, the government has put into place several laws and programs to attract investment in the country. Three such programs are the New Zealand Limited Partnership, the New Zealand Look-Through Company and the New Zealand Foreign Trust.
The New Zealand Limited Partnership can be used for any purpose and is ideal for investment funds, and as an underlying asset holding vehicle for a New Zealand foreign trust. The partnership is essentially a vehicle wherein each family member Limited Partner will be taxed only on the distribution it receives from the Partnership in the jurisdiction to which the Limited Partner is resident for tax purposes. There will be no tax payable in New Zealand unless there is income earned in New Zealand.
The New Zealand Look Through Company (LTC) is a type of tax structure for New Zealand limited liability companies, which allows the company to transfer its income and expenditure to its shareholders directly. The LTC differs from a Limited Liability Partnership in that the LTC has less complex tax rules and reporting, and there is no possibility to transfer losses to future periods.
The New Zealand Foreign Trust for non-resident individuals may be legitimately administered within New Zealand without being subject to taxation in New Zealand.
As such, with the existence of these tax efficient vehicles in addition to the rest of New Zealand’s inherent strengths as a business jurisdiction, New Zealand has made itself a very attractive location for for investment.
Source: www.pearse-trust.ie
