NZ Business Pathway: From Incorporation to First IEA Employment

Last verified: 2026-05-02

A foreign founder building a New Zealand business follows a clean six-stage pathway: incorporate the Ltd, satisfy the s.10(d) director residency, register for IRD and GST, secure a commercial address (or compliant home office), draft the Individual Employment Agreement (IEA), pay the first employee. Each stage has a tight deadline and specific government interfaces (Companies Office, IRD, MBIE, ACC, KiwiSaver). This guide is the end-to-end playbook for 2026.

Quick Answer (TL;DR)

• Stage 1: Incorporate via Companies Office in 1–3 days; minimum 1 NZ-resident or AU-enforcement-country director (s.10(d)).
• Stage 2: IRD number for the company (5–10 days), GST registration if turnover > NZ$60k.
• Stage 3: ACC employer levy registration before first hire.
• Stage 4: Draft IEA per Employment Relations Act 2000 s.65 — written, signed, with all mandatory clauses.
• Stage 5: First payday: PAYE, KiwiSaver 3% employer minimum, payday filing to IRD.
• Stage 6: 90-day trial period (only if employer has fewer than 20 employees, ERA s.67A) — strictly drafted before start date.

Comparison Table at a Glance

The 6-Stage Lifecycle

Stage 1 — Company Formation

Statute: Companies Act 1993 s.10 (qualifications), s.18 (incorporation), s.36 (shares).

Steps:

1. Reserve company name at Companies Register, NZ$10.22 + GST.
2. Identify a s.10(d)-compliant director. Either:
   • A NZ-resident, OR
   • An Australian-resident who is also a director of a non-branch Australian-registered company.
3. Each director signs Consent to Act (Form 1S2) confirming they are not disqualified under s.151.
4. Each shareholder signs Consent to be Shareholder.
5. Submit application at Companies Office. Fee NZ$118.74 (incl. GST). Typically processed in 1–3 working days.
6. Receive Certificate of Incorporation and Companies Office number.

Source: https://companies-register.companiesoffice.govt.nz/

Stage 2 — Tax Registration

Statute: Tax Administration Act 1994; Goods and Services Tax Act 1985 s.51.

IRD number for the company.

• Apply via myIR or paper Form IR595.
• Provide certificate of incorporation, director details, expected business activity.
• Issue: 5–10 working days.

GST registration.

• Mandatory if expected turnover > NZ$60,000 in 12 months (GST Act s.51(1)).
• Voluntary registration available below threshold (useful for export-focused B2B).
• Choose filing frequency: 1-month, 2-month (default), or 6-month.

Income tax.

• Standard NZ corporate tax rate: 28%.
• First provisional tax is due based on residual income tax in year 1.

Source: https://www.ird.govt.nz/

Stage 3 — ACC Employer Registration

Statute: Accident Compensation Act 2001 s.169 (employer liability); s.220 (work levy).

Every NZ employer pays:

1. Work Levy to ACC (covers work-related injuries).
2. Earner Levy deducted from employee wages (covers non-work injuries).
3. Working Safer Levy to WorkSafe NZ.

Levy rates depend on industry classification (BIC code). Tech / SaaS rates are among the lowest.

Steps:

• Register as employer via myACC for Business or paper.
• Indicate first pay date so ACC bills levies from that date.

Source: https://www.acc.co.nz/for-business/

Stage 4 — Drafting the Individual Employment Agreement

Statute: Employment Relations Act 2000 s.65 (written agreement); s.4 (good faith); ss.67A–67H (trial period); Holidays Act 2003.

ERA s.65 requires every employment to have a written employment agreement signed before work starts. Mandatory contents (s.65(2)):

1. Names of employer and employee.
2. Description of work to be done.
3. Place(s) of work.
4. Hours of work.
5. Wages or salary.
6. Plain-language explanation of dispute resolution.
7. Plain-language statement that employee is entitled to public-holiday pay.
8. Provision for protection on restructuring (s.69I).

Other mandatory elements drawn from supporting acts:

• Holidays Act 2003: 4 weeks annual leave, 11 public holidays, 10 days sick leave (after 6 months continuous employment, extended to 10 days from 24 July 2021).
• Wages Protection Act 1983: wages paid in full, in money, on payday.
• Minimum Wage Act 1983: NZ$23.50/hour (adult, from April 2025; verify current rate annually).
• KiwiSaver Act 2006: new employees auto-enrolled if eligible; employer minimum contribution 3%.

Optional clauses (carefully drafted):

• 90-day trial period (s.67A) — only available to employers with fewer than 20 employees as at the day of agreement. Must be in writing, agreed before start, signed before first day. Cannot be added after employment begins.
• Restraint of trade. Must be reasonable in scope, geography, and duration to be enforceable (Brake v Stockport [2017]).
• Confidentiality / IP assignment.

Source: https://www.employment.govt.nz/

Stage 5 — First Payday and Payroll

Statute: Income Tax Act 2007 ss RD 1–RD 7 (PAYE); KiwiSaver Act 2006 s.65; Tax Administration Act 1994 s.23A (payday filing).

Payday flow:

1. Calculate gross pay (hourly × hours, or salary / pay periods).
2. Deduct PAYE per IR340 tax codes.
3. Deduct KiwiSaver at employee’s chosen rate (3, 4, 6, 8, or 10%).
4. Deduct ACC Earner Levy (combined with PAYE).
5. Deduct student loan repayments if applicable.
6. Add employer KiwiSaver at minimum 3%.
7. Pay net wage to employee.
8. File payday filing to IRD within 2 working days of payday.

KiwiSaver employer contribution rule. If the employee is a KiwiSaver member, employer must pay the greater of (a) 3% of gross or (b) the rate stated in the employment agreement. Employer contributions are subject to ESCT (employer’s superannuation contribution tax).

Source: https://www.ird.govt.nz/employing-staff

Stage 6 — Trial Period and Probation

90-day trial period (ERA s.67A–67H):

• Available only to employers with fewer than 20 employees on the day the agreement is entered.
• Must be in writing.
• Signed before first day of work.
• Specified period not exceeding 90 days from start date.
• Express right to dismiss without grievance for unjustified dismissal during the trial.

Probation period (separate, s.67):

• Available to all employers.
• Does not exclude personal grievance rights.
• Allows employer to assess fit; dismissal still requires fair process.

Common error. Drafting a “trial period” with a >20-employee employer renders the trial unenforceable; dismissal triggers a personal grievance claim.

Source: https://www.employment.govt.nz/starting-employment/trial-and-probationary-periods/

Decision Framework / Q&A

Q1: I am a Japanese resident. Can I be the sole director of an NZ Ltd?

No. ERA does not block you from being a director, but Companies Act 1993 s.10(d) requires at least one director who lives in New Zealand or in an enforcement country (currently only Australia) and who is also a director of a non-branch Australian company. You either:

• Find an NZ co-founder.
• Move to NZ on a Skilled Migrant or Investor visa.
• Co-found with an Australian who already has an Australian company directorship.

Q2: How much does it cost to hire one NZ employee per year?

Approximate annual on-cost for a NZ$80,000 employee (Auckland, software role):

• Gross salary NZ$80,000.
• Employer KiwiSaver 3%: NZ$2,400.
• ACC work levy ~0.07–1.2% (industry dependent): NZ$56–960.
• ESCT on KiwiSaver: ~NZ$700.
• Total employer cost: ~NZ$83,200.

NZ employer on-cost is among the lowest in the OECD compared to France (~42% on top) or US (~10–15%).

Q3: Do I need to provide health insurance?

No. NZ has universal public healthcare via ACC and the public health system. Private health insurance is a discretionary benefit, not mandatory.

Q4: What about the 90-day trial period after the 2018 reform?

The Labour-led government’s 2018 Employment Relations Amendment Act restricted 90-day trials to employers with fewer than 20 employees. The 2024 National-led government did NOT reverse this; the small-employer rule remains in force.

Q5: Can I terminate during the trial period without reason?

You can dismiss without giving a personal-grievance ground, but you must:

• Notify in writing per the agreement.
• Pay accrued holidays and any contractual notice.
• Not act in bad faith (s.4 still applies — employer cannot mislead during trial period).

Common Pitfalls (Gyoseishoshi View)

1. Starting work before the IEA is signed. ERA s.65 is strict. An oral agreement leaves the employee on default common-law terms with no trial period defence.

2. Using a 90-day trial period when the employer has 20+ employees. Trial is void; dismissal opens personal grievance.

3. Forgetting to file payday data within 2 working days. Penalty under TAA s.139A.

4. Treating contractor as employee de facto. ERA s.6 contains a real-nature test; if Inland Revenue or MBIE deems the relationship an employment, retroactive PAYE, KiwiSaver, and holidays liability applies.

5. Missing IRD GST 60k threshold. Mandatory backward registration with penalty interest.

6. Confusing the s.10(d) “enforcement country” rule. Only Australia is currently gazetted; Singapore, UK, US are NOT enforcement countries despite frequent claims.

Conclusion

The NZ business pathway is one of the cleanest in the world for a foreign founder who can solve the s.10(d) residency question. Once a NZ or AU-enforcement-country director is in place, the rest of the journey — IRD, GST, ACC, IEA, first payday — is fast and digital. New Zealand’s relatively low employer on-cost makes it an attractive base for a small Asia-Pacific team.

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Disclaimer

Legal information, not legal advice. MmowW Scrib🐮 is operated by a licensed Gyoseishoshi (行政書士) office in Japan. We are not solicitors, barristers, attorneys, avocats, or licensed legal practitioners in any jurisdiction.

Sources

• NZ Companies Act 1993: https://www.legislation.govt.nz/act/public/1993/0105/
• NZ Companies Register: https://companies-register.companiesoffice.govt.nz/
• NZ Employment Relations Act 2000: https://www.legislation.govt.nz/act/public/2000/0024/
• NZ Holidays Act 2003: https://www.legislation.govt.nz/act/public/2003/0129/
• NZ KiwiSaver Act 2006: https://www.legislation.govt.nz/act/public/2006/0040/
• NZ Inland Revenue: https://www.ird.govt.nz/
• NZ Inland Revenue employer guide: https://www.ird.govt.nz/employing-staff
• NZ ACC for business: https://www.acc.co.nz/for-business/
• NZ Employment.govt.nz: https://www.employment.govt.nz/
• NZ Tax Administration Act 1994: https://www.legislation.govt.nz/act/public/1994/0166/
• NZ Minimum Wage Act 1983: https://www.legislation.govt.nz/act/public/1983/0115/