Doing business in New Zealand - Grant Thornton

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Unions Trade union membership is voluntary. Employees may negotiate individual employment agreements with their employers. Only members of a registered union can be party to a collective employment agreement. The Employment Relations Act 2000 provides unions with workplace access. Personnel limitations: foreigners/ nationals A visa or work permit is required for a person to work in New Zealand unless they are: • a New Zealand citizen or holder of a New Zealand resident or permanent resident visa • an Australian citizen or Australian permanent resident • exempt from the requirement to hold a permit to be in New Zealand. Key employees of a business that wants to relocate its operations to New Zealand may be eligible for a work visa and, later, for residence under the Employees of Relocating Businesses Category. Employers in New Zealand who wish to recruit from overseas must provide evidence that there are no suitable New Zealand applicants for the job. For more information visit: www.immigration.govt.nz Work visas are available under various categories for people wishing to work in New Zealand either on a temporary basis or permanently. A person may qualify for a temporary work visa if: • they have a job offer from a New Zealand employer • there is a specific purpose or event for which they need to come to New Zealand to work • they are a student or trainee who wants to work in New Zealand • they wish to join a partner in New Zealand and work • certain other criteria are met. Doing business in New Zealand 14
Financial reporting and audit Domestic requirements Presently, all companies registered in New Zealand, whether or not they are incorporated in New Zealand, must prepare financial statements that comply with the requirements of the Companies Act 1993 and the Financial Reporting Act 1993. The Financial Reporting Act 1993 requires compliance with generally accepted accounting practice in New Zealand (NZ GAAP). For most companies this necessitates compliance with applicable financial reporting standards (ie, accounting standards that have the force of law behind them, which means that if they are breached significant fines and/or imprisonment can result) or, where there is no applicable reporting standard, accounting policies that are appropriate to the entity’s circumstances and that have authoritative support within the accounting profession in New Zealand. It should be noted that significant amendments are likely to be made to this legislation within the next 12 months so please consult our website for the latest details: www.grantthornton.co.nz/Services/ Audit/IFRS/financial-reportingchanges.html. There is currently a category of companies called “exempt” companies and their financial reporting requirements are outlined in legislation. They are companies that have total assets and turnover not exceeding NZD$450,000 and NZD$1,000,000 respectively, are not subsidiaries of other companies and have no subsidiaries of their own, and have up to nine months after balance date within which to complete financial statements. The Government has indicated that it intends to modify the Financial Reporting Act 1993 and remove this type of company. It will be replaced by a reporting regime where a company or a group of companies with common ownership that have total assets below $60 million or revenues less than $30 million per year will no longer be required to produce general purpose financial statements in accordance with NZ GAAP. Accounting standards NZ GAAP currently differs from US GAAP and International Financial Reporting Standards (IFRS) in a number of respects: • The Financial Reporting Act 1993 does not permit standards to be overridden where compliance with NZ GAAP would not give a true and fair view. Instead, the applicable standards must always be followed and, if they do not present a true and fair view, then the directors must cite why this is the case and present the financial statements in a way that they believe does present a true and fair view. The auditor then needs to determine whether they concur with the directors’ point of view or not • “Exempt” companies may elect to prepare financial statements that are not consistent with NZ GAAP because there is a concessional framework for small companies provided by the Financial Reporting Order 1994 (a regulation stemming from the Financial Reporting Act 1993) • Entities that meet the criteria for differential reporting (see differential reporting, p16) have the option to exempt themselves from complying with certain financial reporting standards, including the requirement to prepare a statement of cash flows and segment reporting New Zealand equivalents of International Financial Reporting Standards (IFRS) NZ GAAP is presently undergoing a transition. Currently, all entities must report under New Zealand equivalents of International Financial Reporting Standards (NZ IFRS) or New Zealand Financial Reporting Standards (FRS). However, going forward, the External Reporting Board (the body that creates applicable financial reporting standards) in April 2011 signalled that public sector entities will for periods commencing on or after 1 July 2014 be required to report under New Zealand equivalents of International Public Sector Accounting Standards (NZ IPSAS). Not for Profit organisations will have a modified form of NZ IPSAS and the operative date for these types of entities is likely to be for periods commencing on or after 1 April 2015. Doing business in New Zealand 15
Page 1 and 2: Grant Thornton New Zealand 2012 Doi
Page 3 and 4: Foreword If you are planning on doi
Page 5 and 6: • Queen’s Birthday - 1st Monday
Page 7 and 8: • The Credit Contracts and Consum
Page 9 and 10: Imports Import restrictions There a
Page 11 and 12: Branch in New Zealand Registration
Page 13: Paid parental leave Paid parental l
Page 17 and 18: From 2013 onward the criteria for d
Page 19 and 20: Attributed foreign income New Zeala
Page 21 and 22: Non-residents Non-resident withhold
Page 23 and 24: Groups Each company in a group file
Page 25 and 26: Individuals Individuals are taxed i
Page 27 and 28: Returns GST returns are filed on a

Doing business in New Zealand - Grant Thornton

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