The branch and the subsidiary are two valid options for foreign companies looking to do business in New Zealand. Our local team of lawyers can help you incorporate any of these business forms.
| Quick Facts | |
|---|---|
| Applicable legislation (home country/foreign country) | The NZ Companies Act in the case of the subsidiary, the foreign country’s laws (as may apply) for the branch |
| Best used for | The subsidiary is suitable for opening a local company controlled by a foreign entity. The branch is used to expand the activities of a foreign company to New Zealand. |
| Minimum share capital | No prescribed minimum. |
| Time frame for the incorporation (approx.) | Two weeks |
| Documents to be filed by the parent company | For branch: copies of the foreign company’s Certificate of Incorporation and other documents. For subsidiary: the complete incorporation documents as required for a locally registered entity. |
| Management | Local for the subsidiary, foreign (via an appointed representative) for the branch |
| Legal representative required | Yes, in the case of the branch |
| Local bank account | Yes |
| Independence from the parent company | The subsidiary is independent from its parent company, the branch is not. |
| Liability of the parent company | The parent company is fully liable for its NZ branch. |
| Corporate tax rate | 28% |
| Annual accounts filing requirements | General annual financial statements |
| Possibility of hiring local staff | Yes |
| Travel requirements for incorporating branch/subsidiary | Not necessarily. Some steps can be handled by our lawyers in New Zealand. |
| Double tax treaty access | Yes |
Table of Contents
What are the differences between the subsidiary and the branch office in New Zealand?
Both the branch and the subsidiary are forms under which an overseas company can carry out business in NZ; however, there is also a third option, to transfer the company completely to NZ. Below, our lawyers summarize the manner in which an overseas company can choose to be registered in New Zealand:
- Subsidiary: the NZ subsidiary will be a regular local company wholly owned by the foreign company; as stated, it will be a completely separate legal entity, registered according to local laws;
- Branch: there will be no difference between the overseas company and its NZ branch (they will operate as the same entity), however, the branch will conduct all operations under New Zealand Law;
- Transfer: by transferring the operations of the foreign company from its country of origin to NZ by registering a new business.
What are the steps for opening a branch office in New Zealand in 2026?
The procedure for opening a branch office in New Zealand is largely the same as for registering a subsidiary, with few differences between the two legal forms for incorporation purposes.
The following documents need to be prepared upon the registration of a branch in New Zealand:
- The parent company’s Certificate of Incorporation, as issued by the Trade Register in its home country;
- The documents indicating the decision to register the branch (the resolution of incorporation);
- The constitutive documents of the New Zealand branch office, drafted in English;
- Information about the foreign company’s directors and the legal address of the foreign business in the home country;
- The decision through which a branch representative is appointed, a legal address in New Zealand, and valid contact details.
When registering the name of an overseas company, the name registered in NZ must be identical to the one used by the company in the country where it is registered. Prior name checks are required both in the case of the branch and the subsidiary.
Overseas companies may need to register if they intend to conduct certain activities through a branch in NZ. For example, they will need to make proper registrations if they wish to administer or manage property in NZ. However, they will not need to register if they will sell property through an independent contractor.
What are the steps for opening a subsidiary in New Zealand in 2026?
The difference between the incorporation of a branch office and a subsidiary resides in the fact that the subsidiary must be registered as a limited liability company (private or public), which also implies Articles of Association for the business to be filed with the local Trade Registry.
The subsidiary will also need to appoint a New Zealand resident director. There are no minimum share capital requirements related to the opening of a subsidiary in New Zealand.
Should I open a branch office or a subsidiary in New Zealand?
It should be noted that most of the time, the branch office is used for companies operating in the banking, insurance, and financial services sectors. The subsidiary, on the other hand, is used for trading activities.
The other aspects that should be considered when having to choose between a branch and a subsidiary in New Zealand are:
- treaties: the branch office will benefit from the advantages of New Zealand’s double tax treaties;
- costs: the costs of opening and maintaining a branch office are lower than in the case of a subsidiary;
- management: the subsidiary needs a resident director, while the branch is not subject to this requirement.
Quickly find out from the infographic below which business structure suits you best in New Zealand and what advantages each option offers:
What are the conditions for a branch vs. a subsidiary director in NZ?
All New Zealand companies must comply with the requirement to have at least one director who lives in New Zealand or Australia (and in this case, is the director of a company incorporated in Australia). Thus, the individual is usually required to spend more than 183 days in a 12-month period in the country.
The subsidiary cannot appoint a director who has been prohibited from fulfilling this role under statutory provisions, for example, when convicted in the last five years of a crime that involved dishonesty or when prohibited from managing a company or limited partnership by the Registrar of Companies or the Financial Markets Authority.
Are there any tax differences between a branch office and a subsidiary in NZ?
Our team of lawyers in New Zealand lists some of the most important taxes below:
- 28% – the corporate income tax rate;
- 0%, 15%, 30%, 33% – the different withholding tax rates applicable in case of dividends;
- 28%, 33%, 39%, or 45% – in some cases, the withholding tax on interest payments made in case of resident companies; for non-resident companies, the tax is 0% or 15%;
- 15% – the standard rate of the goods and services tax; a reduced rate of 0% applies in some cases, and other goods and services can be exempt altogether. GST registration is mandatory when the company has annual supplies made in NZ that exceed NZD 60,000.
New Zealand does not impose a payroll tax, capital duty, transfer tax, or stamp duty. There is no net wealth tax and no inheritance or estate tax.
The branch and the subsidiary in NZ are, in most cases, subject to audit requirements, and both of these structures are required to file the annual return and/or file their accounts with the NZ Companies Office.
How much does it cost to open a branch or a subsidiary in New Zealand?
Some company formation costs, such as the name reservation fee, remain the same for the branch and the subsidiary ($10 plus GST). However, the process also includes other costs and fees.
Below, we provide an example of our once-off payment for the establishment and incorporation of a New Zealand company (for the purpose of this article, the subsidiary):
- Director and shareholder due diligence: NZD 250 per person;
- Company formation and registration (IRD number, constitutive documents drafting, director appointments, shareholder and director registries): NZD 9,000.
Please note that other services, such as bank account openings, are offered, and they involve different costs.
How long does it take to open a branch or a subsidiary in New Zealand?
The formal requirement for overseas companies, as set forth by the Companies Office, is to register within 10 working days, following the date on which the foreign company starts its business activities in New Zealand.
However, before it can start its activities, the company must complete a set of steps that can last around 3 business days:
- Reserve the company name: this can take 1 business day;
- Prepare the documents: at least 1 business day should also be included here;
- Await for the approval: this can be provided within 1 business day; however, the processing time may differ on a case-by-case basis.
Please keep in mind that the timeline provided above is simply an estimate.
If you require more information about branch or subsidiary creation, we kindly invite you to contact us.