A branch office is a form of business entity allowed to carry out commercial activities in the country. A branch has no separate legal personality from its parent company but from the shareholders and directors of its head office. It also has no minimum or maximum time it can exist. It cannot have separate governing documents from its main office, which is liable for the debts incurred by the branch. The business and activities of the entity are managed by the parent, a director, or a shareholder. The holding company details of the main office are registered with the NZ Companies Office and made available to the public via the online register. A company based outside this territory engaging in business here needs to register a branch within 10 working days of the commencement of business. Whether an entity carries out business activities here is based on the nature of the entity and its activities. A branch can engage and undertake any business activity, carry out an act, or enter into any transaction. Since it is not a separate legal entity from its main office, partaking in international restructurings is according to the laws of the jurisdiction where it is located.
If you are looking to establish a branch office as a foreign entity based overseas, here is a guide on the branch office, how to incorporate a Branch Office in New Zealand, and the process of registration.
Features of a branch
The Branch has no separate personality from its parent company, thus, its features are subject to that of the parent. The number of shareholders and directors is the same as the Parent. The only feature of the branch is that it can carry out business and transactions in the country on behalf of its parent company.
The process of incorporation
The establishment of a branch is backed by the Companies Act 1993 (Companies Act). The process of registration is done by submitting an application to the New Zealand Companies Office. The following documents must be presented during the registration: application to a reserve company name, details of financial year end, date of commencement of business, and principal place of business here (If the Parent is an Australian company), certificate of Incorporation, details of director and shareholder details, financial year end, date of commencement of business, and principal place of business here (If the Parent is based elsewhere), involvement of notary, etc. A Branch can apply for an IRD number with the Inland Revenue Department and register as an employer and goods and services tax (GST) with the NZ Companies Office. However, it must provide the following:
- An IRD number for the directors and shareholders of the parent company
- A Business Industry Code (BIC) for the Branch
Information to be provided during the incorporation
The following information has to be filed with the New Zealand Companies Office during the registration:
- Personal detail of the directors
- Details of the Shareholders
- Details of the Ultimate holding company details (if any)
- Parent company details
- Financial statements of the Parent (if required)
- Place of business of the Branch, etc.
Timeline of the process
Once the name of the branch is approved by the New Zealand Companies Office, and a confirmation that all the supporting information of the parent company is accurate, the process takes one to two business days to complete.
Cost of the process
The major costs of registration include the legal and accounting fees (if any), a New Zealand Companies Office fee for the name reservation, and registration, which is NZ$115, without a GST of 15 percent, if any.
