Starting a Business in New Zealand Te tīmata pakihi ki Aotearoa

01Choosing your structure

Your business structure determines who pays the tax, who is liable if things go wrong, and how complicated your year-end is. The four common options in New Zealand are sole trader, partnership, company, and trust.

A sole trader is you, trading under your own name or a trading name. There is no separate registration, you use your personal IRD number, and the business profit is treated as personal income. You are personally liable for everything the business does.

A partnership is two or more sole traders running a business together. Each partner is taxed on their share of the profit. The same personal liability applies, spread across partners.

A company (Limited or Ltd) is a separate legal entity. It pays a flat company tax rate of 28%. By declaring a shareholder salary, you deduct that amount from the company's net profit, thereby reducing the company's taxable income.

A trust is a separate structure used for asset protection or estate planning. Income passes through to beneficiaries, who are taxed on it.

If you are not sure which to choose, see IRD's guidance on business structures or talk to an accountant before you set anything up.

02Registering with the Companies Office

You only need this step if you are forming a company. Sole traders and partnerships skip it.

Company registration happens online at companiesoffice.govt.nz. You will need:

• A name that is not already taken (the website checks this for you)
• A registered office address in New Zealand
• An address for service
• Director details. At least one director must live in New Zealand or in Australia and also be a director of an Australian company
• Shareholder details and the number of shares each holds

There is a small filing fee at registration plus an annual return fee each year. The annual return is just a confirmation of director and shareholder details, not a financial filing. Miss it and the Registrar can remove your company from the register.

Companies Office also handles trademark registration if you want to protect your brand name. That is a separate, more expensive process and usually a year-two consideration.

03Setting up an IRD number

Inland Revenue (IRD) is who collects tax. Sole traders use their personal IRD number for the business. Partnerships and companies need their own separate IRD number.

For a company, the IRD number is usually issued automatically when you register with the Companies Office, with a slight delay. For a partnership, you apply via myIR or the IR591 form. For a trust, the trustee applies.

Once you have the right IRD number, set up a myIR online account at ird.govt.nz. This is where you file GST returns, manage tax payments, and update your details. You will use it constantly. If you have an accountant, they can be linked to your account so they can act on your behalf.

If you employ staff, you also need to register as an employer so you can deduct PAYE, KiwiSaver, and student loan repayments from wages.

04When to register for GST

You must register for GST if your turnover exceeds, or is expected to exceed, $60,000 in any 12-month period. This is a rolling figure, not a financial year figure. Once your last 12 months of revenue cross the threshold, register within 21 days.

You can also register voluntarily under the threshold. Whether voluntary registration helps depends on who your customers are. If they are GST-registered businesses, registering means you can claim GST back on your purchases without affecting their cost. If your customers are end consumers, charging 15% on top of your prices will make you 15% more expensive than an unregistered competitor.

The GST rate is a flat 15% on most goods and services. Some things are zero-rated (exports, residential rent) or exempt (financial services), but for most businesses it is just 15% applied to the sale price.

Try the GST calculator to play with the numbers, or the tax deadline tracker to see what registering means for your filing schedule.

05Choosing accounting software

You need somewhere to record income, expenses, GST, and bank transactions. The main options in New Zealand are Xero, MYOB, and a few smaller players. Common reasons businesses choose Xero include:

• Bank feeds work with all major NZ banks
• The interface is designed for owners to handle day-to-day data entry
• A large accountant ecosystem supports it
• Add-ons exist for common needs (job tracking, payroll, expense capture)

If you become a TACA client, your Xero subscription is bundled into the monthly fee. We set it up with a chart of accounts tailored to your industry, bank feeds connected, invoicing templates ready, and training sessions so you can use it day-to-day.

06Setting up business banking

Keeping personal and business transactions in separate accounts makes year-end record-keeping more straightforward. For a company, a separate business account is required, because the company is a separate legal entity from you.

Most major NZ banks (ANZ, ASB, BNZ, Westpac, Kiwibank) offer business accounts. Practical questions to compare include:

• Does the bank feed cleanly into Xero (all majors do)
• What are the monthly fees and transaction costs
• Do you need EFTPOS or merchant services and what the bank charges for them
• How responsive their business banking team is

Banks also offer business credit cards and overdrafts. Talk to your bank about their criteria, and to an accountant about whether either is suited to your situation.

07Understanding tax obligations

The taxes that apply to most new businesses are income tax, GST (if registered), and PAYE plus KiwiSaver (if you have staff).

Income tax is paid on your profit (income minus deductible expenses). For a sole trader, this is just part of your personal tax return. For a company, the company files its own income tax return at the company tax rate, currently 28%.

In your first year, you typically pay tax once at the end of the year, called terminal tax. From your second year onward, IRD asks for provisional tax in three instalments throughout the year, based on the previous year’s income. The standard provisional tax dates for a 31 March balance date are 28 August, 15 January, and 7 May.

If you employ staff, you deduct PAYE (income tax) from their wages and pay it to IRD by the 20th of the following month. KiwiSaver contributions and student loan deductions follow a similar pattern.

ACC levies are an additional cost for self-employed people and employers. ACC bills you separately based on your industry and earnings, usually mid-year.

08First-year deadlines to know

Assuming you start a business at the beginning of a financial year (1 April) with a 31 March balance date, here are the key dates in your first 12 months:

• Within 21 days of crossing the $60K GST threshold: register for GST
• Two months after each GST period ends: file the GST return (typically due the 28th of the second month after, with two adjustments around Christmas and year-end)
• 20th of each month: PAYE return and payment if you have staff
• End of your first financial year: prepare financial statements and an income tax return
• 7 February (extended to 7 April with an accountant): terminal tax for the first year

The tax deadline tracker generates a personalised calendar based on your balance date and GST frequency.

09Getting the right advice

Starting strong can save you years of stress later. An accountant helps you get the structure, registrations, and systems right from day one, so the foundation is solid before the business gets busy.

It is particularly worth talking to an accountant if:

• You are forming a company and want the structure decisions made properly
• You are approaching the GST threshold or considering voluntary registration
• You have, or are about to hire, staff
• You hold residential or commercial property in your business name
• You want to claim home office, vehicle, or asset depreciation deductions properly
• Year-end is approaching and you want someone to make sure your records and returns are in order

At TACA - The Lakes, we help new businesses set up correctly from day one: registering your company, managing GST, sorting your accounting systems, and explaining exactly what is due and when.

TACA’s Ignition package is built for new businesses. $270/month inc GST, Xero subscription included, unlimited support throughout your first year. Book a chat and we will explain how we work and whether we are the right fit.