How to Register a Business in the US from New Zealand

Step 1: Benefits of starting your US business from New Zealand

Starting a US business from New Zealand offers numerous compelling benefits that can significantly enhance your entrepreneurial journey. One of the primary advantages is the time zone difference, which allows for extended operational hours. When your business in New Zealand closes, your US operations open, giving you almost 24-hour productivity. This means you can serve customers and collaborate with partners across different time zones seamlessly, maximizing your business efficiency and customer satisfaction.

Additionally, New Zealand boasts a favorable business environment characterized by low corruption levels, a transparent legal system, and strong intellectual property protection. These factors contribute to a stable foundation from which to manage US business operations. Moreover, New Zealand has a highly skilled and educated workforce, renowned for its creativity and innovation. Leveraging this local talent can give your US business a unique edge, allowing you to stand out in a competitive market. Combining Kiwi ingenuity with the vast opportunities of the US market can create a powerful synergy that catalyzes business growth and success.

Step 2: How to start your US business from New Zealand

Starting a US business from New Zealand involves several key steps to ensure you comply with both US and New Zealand regulations, as well as optimizing your business for success. Firstly, you should choose the right business structure. Common structures include a Limited Liability Company (LLC), Corporation, or a sole proprietorship. Each has different implications for liability, taxation, and management, so it's crucial to choose one that aligns with your business goals. Registering your business will involve selecting a unique name and often requires filing with the US state where you intend to operate.

Once your business structure and name are ready, obtaining an Employer Identification Number (EIN) from the Internal Revenue Service (IRS) is essential. This number is necessary for tax purposes, hiring employees, and opening a US business bank account. Additionally, depending on the nature of your business, you might require specific licenses and permits to operate legally in the US. It is also important to consider banking and payment processing solutions that facilitate cross-border transactions, ensuring smooth financial operations between New Zealand and the US. Lastly, seek advice from legal and financial professionals experienced in international business to navigate any complexities and ensure full compliance with both US and New Zealand laws.

Step 3: Opening a Business Bank Account

A business bank account is a separate account that is used exclusively for business transactions. But why is it important to open a business bank account?

Keeping your personal and business finances separate is crucial. A dedicated business bank account allows you to do just that, making it much easier to track your business’s income and expenses. This clear separation translates to simpler tax reporting come tax season.

But the benefits go beyond bookkeeping. Having a separate account can provide legal protection. It establishes your business as a distinct entity from yourself. In the unfortunate event of a lawsuit or bankruptcy, this separation can help shield your personal assets from business liabilities.

Furthermore, a business bank account can boost your credibility and project professionalism.

It demonstrates to clients and vendors that you take your business seriously and are committed to maintaining accurate financial records. This can be especially important in establishing trust with potential partners.

Finally, a business bank account is essential for accepting payments, even if you utilize a merchant account. Whether you use doola or another service, funneling those customer funds into a dedicated business account is necessary.

doola partners with banks that allow you to open a bank account remotely from anywhere in the world, like Mercury. Shop around and compare different banks’ fees and services.

Look for a bank that offers the features you need, such as online banking, mobile banking, or overdraft protection.

You may also want to consider working with a bank that specializes in small business banking.

Step 4: Understanding Your Compliance Requirements in New Zealand

Understanding Compliance Requirements for Running a US Business in New Zealand

Expanding a US business into New Zealand opens new opportunities but also brings a series of compliance requirements that must be thoroughly understood. Compliance involves adhering to New Zealand’s legal, regulatory, and cultural standards. Below are key considerations:

Legal and Regulatory Environment

• Company Registration: To operate in New Zealand, you must register your business with the New Zealand Companies Office. This includes applying for a New Zealand Business Number (NZBN).
• Tax Obligations: Your business must comply with New Zealand’s tax laws, including Goods and Services Tax (GST), income tax, and potentially Fringe Benefit Tax (FBT). Register with Inland Revenue for the appropriate tax accounts.
• Comply with Trading Laws: Ensure your business adheres to the Commerce Act, Fair Trading Act, and Consumer Guarantees Act, which govern fair trading and consumer protection.

Employment Laws

• Employee Rights: Familiarize yourself with New Zealand’s employment laws including the Employment Relations Act, which covers employee rights, contracts, dispute resolutions, and leave entitlements.
• Health and Safety: The Health and Safety at Work Act requires businesses to provide a safe working environment. Regular audits and safety training are essential.
• Minimum Wage and Leave: Comply with New Zealand’s minimum wage requirements and statutory leave entitlements, including annual, sick, and parental leave.

Cultural and Market Considerations

Understanding the local business culture and consumer market is crucial for success. The following points highlight essential considerations:

• Consumer Preferences: Conduct market research to adapt your products or services to suit New Zealand’s unique consumer preferences and expectations.
• Business Etiquette: Building relationships and trust is vital. Networking and personal connections often play a significant role in business dealings.
• Marketing and Advertising: Ensure your advertising complies with New Zealand’s advertising standards, which emphasize truthfulness and social responsibility.

Intellectual Property Protection

If your business relies on intellectual property, consider the following:

• Trademark Registration: Register your trademarks with the New Zealand Intellectual Property Office to protect your brand and products.
• Patents and Copyrights: Apply for patents and copyrights to safeguard your inventions and creative works from infringement.

By understanding these compliance requirements and adapting to New Zealand’s legal, regulatory, and cultural landscape, your US business can thrive in this dynamic market.

doola offers a Total Compliance package, including bookkeeping services, to help you stay on top of your compliance requirements. This ensures your business operates smoothly and adheres to all legal and regulatory standards.

Step 5: Understanding Your Tax Obligations in New Zealand

Understanding Tax Obligations for Running a US Business in New Zealand

Expanding a US business into New Zealand can be a strategic move, but it comes with certain tax obligations and considerations. This article aims to provide clarity on key aspects you should keep in mind.

Determine Your Tax Residency Status

The first step is understanding whether your business is considered a resident or non-resident for tax purposes in New Zealand. A business may become tax resident if it has a permanent establishment in New Zealand, such as a branch or office.

Double Taxation Agreement (DTA)

New Zealand and the United States have a Double Taxation Agreement that helps mitigate the risk of being taxed by both countries on the same income. The DTA outlines which country has taxing rights over different types of income and can provide tax relief through credits or exemptions.

Income Tax

New Zealand levies a corporate tax rate of 28% on its businesses. If your US business is deemed a tax resident, you're required to pay income tax on earnings derived from New Zealand. Non-residents only pay tax on New Zealand-sourced income.

• Taxable Income: Includes profits from trading, investments, and other local business activities.
• Deductions: Allowable deductions can help reduce taxable income, such as business expenses, depreciation, and certain taxes.

Goods and Services Tax (GST)

GST in New Zealand is a 15% tax on most goods and services. If your US business supplies goods or services in New Zealand, it may need to register for GST and charge it appropriately.

1. Registration: Required if annual turnover exceeds NZD 60,000.
2. Filing: Regular GST returns must be filed, usually every two months.
3. Input Tax Credits: Claimed for GST paid on business-related purchases.

Fringe Benefit Tax (FBT)

If your US business provides fringe benefits to employees based in New Zealand, such as cars, loans, or subsidized transport, you may owe Fringe Benefit Tax (FBT). The rate varies depending on the type and value of benefits.

Pay As You Earn (PAYE)

For US businesses employing staff in New Zealand, it's mandatory to deduct PAYE tax from employee wages. This includes income tax and ACC (Accident Compensation Corporation) levies. Registration as an employer with Inland Revenue is required.

Transfer Pricing

New Zealand has strict transfer pricing regulations to prevent profit shifting to lower-tax jurisdictions. Any intercompany transactions between your US parent and New Zealand subsidiary must be conducted at arm's length and documented thoroughly.

Consulting with a tax professional experienced in both US and New Zealand tax laws is advisable to ensure compliance and optimize your tax strategy.

It’s a good idea to consult with a tax professional or an accountant (or to hire these roles in-house) to make sure you’re not missing anything.

doola's Total Compliance package can handle your tax filings for you, ensuring you remain compliant with federal, state, and local tax requirements.

Step 6: How doola Can Assist

doola simplifies the incorporation and setup process for your company, ensuring you’re ready to charge customers, hire your team, and raise funds as quickly as possible.

Fill out your company details in the doola form in less than 10 minutes. Then, we’ll incorporate your company in any of the 50 US states, get your IRS tax ID (EIN) for you, and file your 83(b) tax election if needed. 

doola can also help you open a bank account and start accepting payments even before the IRS assigns your tax ID.

doola founders also gain access to exclusive discounts at leading software partners, one-click onboarding with select partners, and free CPA consultations.

The doola Application

It takes less than 10 minutes to fill out the details of your new company. You’ll choose your company structure (C corporation, limited liability company) and pick a company name.

Our instant company name checker will let you know if it’s available before you submit your application. You’ll add an address and phone number and review and sign your EIN SS4 letter in one click.

Forming the Company

doola will review your application and file your formation documents in the state within one business day. doola charges $297 for our Starter Plan and your first year of registered agent services (a state compliance requirement), and $297 each year thereafter to maintain your registered agent. 

You can also opt for our Total Compliance plan.

Getting Your IRS Tax ID (EIN)

After your formation in the state is complete, doola will file for your company’s IRS tax ID. Founders who provide a US Social Security number, US address, and US phone are eligible for expedited processing. All other users will receive standard processing. 

For standard orders, doola will fax your form SS4 to the IRS and then call the IRS to retrieve the EIN for you to expedite the process if we can, using real-time IRS data to determine when your filing is likely to be available.

Filing Your 83(b) Tax Election

Many startup founders choose to file an 83(b) tax election to potentially save on future personal taxes. doola can file and mail your 83(b) tax election in one click for both US and non-US founders — no trip to the post office required.

We’ll file it using USPS Certified Mail with tracking, and you’ll get a copy of your signed 83(b) election and proof of filing in your Dashboard.

Partner Perks and Discounts

doola partners with a range of third-party tools to offer special pricing or access to founders. We offer discounts on engineering, tax and finance, compliance, and operations tools, including Amazon Web Services.

doola also partners with Mercury to provide faster, automatic onboarding using your doola company information so you can get ready to bank and fundraise even faster.

Founders may also access discounts on other doola products, including up to one year of free credits toward payment processing.

Read our guides for startup founders, or learn more about doola and how we can help you set up your new business quickly and easily.

Turn your entrepreneurship dream into reality today!

We do our best to provide accurate and up to date information, however the information provided here are just guidelines. Please speak with a tax and compliance professional in your country