NZ Director Residency Requirement (Companies Act s.10(d))

Section 10(d) of the Companies Act 1993 is the single most often-misunderstood provision in New Zealand company formation. Foreign founders who arrive expecting a NZ-incorporation pathway as frictionless as Delaware or Singapore are routinely surprised to discover that NZ requires at least one director who lives in New Zealand or in an enforcement country and is also a director of a company registered there. The only currently designated enforcement country is Australia. There is no exception for sole shareholders, no waiver for venture investment, and no waiver for tikanga or whānau purpose. This guide unpacks s.10(d) as it operates in 2026.

The Statutory Text

Section 10 of the Companies Act 1993 prescribes the requirements for incorporation. Subsection (d) provides that a New Zealand company must have at least one director who:

(i) lives in New Zealand; or (ii) lives in an enforcement country and is a director of a company that is registered in that enforcement country.

The full Act text is at https://www.legislation.govt.nz/act/public/1993/0105/latest/whole.html.

Why Section 10(d) Exists — Enforcement Pragmatism

Section 10(d) is not protectionist. It exists so that, when a company breaches the Act, fails to file accounts under s.214, causes harm to creditors, or commits an offence under Part 16, the Registrar of Companies and the Courts have at least one natural person physically reachable in New Zealand or Australia. Without it, prosecuting offences against absentee-only boards would be practically impossible — overseas service of process, extradition, and asset recovery all depend on having a real human within reach.

The 2014 amendments that introduced s.10(d) followed several high-profile shell-company cases involving NZ-registered entities controlled entirely from offshore. The provision is the pragmatic response.

What “Lives in” Means

The Companies Act 1993 does not define “lives in”. The Registrar of Companies’ published practice — supported by the first NZ judgment on the question, Registrar of Companies v Fitness Pro Limited (NZHC 2018) — interprets “lives in” as requiring physical presence in New Zealand for more than 183 days in a 12-month period.

The Registrar may be satisfied on less than 183 days where:

• The director’s primary residence is in NZ but they are temporarily abroad;
• The director’s family, employment, and economic ties are demonstrably in NZ;
• The absence is for a defined and short purpose.

Conversely, the Registrar may reject a director who has nominally an NZ address but in substance lives offshore. A “letterbox director” who visits NZ once a year and signs documents from overseas does not satisfy s.10(d).

The Registrar’s online guidance is at https://companies-register.companiesoffice.govt.nz/help-centre/company-directors/who-can-be-a-director/.

The “Enforcement Country” Pathway

Section 10(d)(ii) provides an alternative: the director may live in an enforcement country if they are also a director of a company registered in that enforcement country.

The Companies Act 1993 (Enforcement Country) Order 2015 designates Australia as the only enforcement country. So in practice:

• A director who lives in Sydney, NSW, and is a director of an Australian company (Pty Ltd or Ltd registered with ASIC) — satisfies s.10(d).
• A director who lives in Sydney but is not a director of an Australian company — does not satisfy s.10(d). Living in Australia alone is insufficient.

This is the route most often used for trans-Tasman startups: a NZ-Australian founder pair where the Australian co-founder is also a director of the founders’ Australian Pty Ltd.

The Order is on legislation.govt.nz: https://www.legislation.govt.nz/.

Who Can Be a Director — Section 151

Section 151 of the Companies Act 1993 separately prescribes the qualifications of directors:

A person is disqualified from being a director if they are:

• (a) Under 18 years of age;
• (b) An undischarged bankrupt;
• (c) Prohibited under ss.382, 383, or 385 (management banning orders);
• (d) Prohibited under the Takeovers Act 1993, the Financial Markets Conduct Act 2013, or the Securities Markets Act 1988;
• (e) Subject to a property order under the Protection of Personal and Property Rights Act 1988;
• (f) Disqualified from being a director by an order made by a Court under any other Act.

Section 151 applies separately from s.10(d). A person can satisfy s.10(d) (lives in NZ) but be disqualified under s.151. Both must be cleared.

Reference: https://www.legislation.govt.nz/act/public/1993/0105/latest/DLM320690.html

Practical Scenarios

Scenario A — Solo NZ Founder

A NZ-citizen founder, resident in Wellington, incorporates as sole director and sole shareholder. Section 10(d)(i) satisfied — the director lives in NZ. No further analysis required.

Scenario B — Trans-Tasman Two-Founder Startup

James (NZ resident, Auckland) and Priya (Australia resident, Sydney). Priya is also a director of an Australian Pty Ltd company.

• Section 10(d)(i) satisfied by James (lives in NZ).
• Section 10(d)(ii) also satisfied by Priya (lives in AU + AU company director).

Either director alone satisfies s.10(d), so the company is robust to either resigning. Best-practice multi-founder structure for a trans-Tasman venture.

Scenario C — Trans-Tasman with Non-Director Co-Founder

James (NZ resident, sole director). Co-founder Yuki lives in Sydney but is not a director of any Australian company.

• Section 10(d)(i) satisfied by James.
• Yuki cannot be a director under s.10(d)(ii) — living in Australia alone is insufficient. She can be a shareholder without restriction.

Scenario D — Foreign Founder Without an NZ Connection

Wei lives in Shanghai. He has no NZ residents in his network.

Two options:

• Appoint a NZ-resident director under a written services agreement. The NZ-resident director must genuinely “live in” NZ — token directorship invites Registrar enquiry. The provider must be registered as a reporting entity for AML/CFT supervision under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009.
• Register an overseas company under Part 18 (ss.332–349) instead of forming a NZ subsidiary. An overseas company “branch” registers with the Companies Office and operates in NZ without forming a separate NZ legal entity. Different register, different ongoing obligations — and rarely what founders want for liability ring-fencing.

Scenario E — NZ Director Moves Abroad

A sole NZ-resident director relocates to London, leaving an NZ company without a qualifying director. The company is in immediate breach of s.10(d). The Registrar may issue a notice and ultimately remove the company from the register under s.318(1)(b) if the breach is not cured.

Cure paths: appoint an additional director who satisfies s.10(d), or restructure the directorship before the relocating director departs.

Common Mistakes

What the Registrar Looks For

In substance the Registrar’s enquiry into s.10(d) compliance asks:

• Where is the director’s permanent home?
• Where is the director’s spouse / family / dependents?
• Where does the director pay tax?
• Where does the director hold their bank accounts and primary medical care?
• How many days has the director been physically in NZ in the last 12 months?
• For the s.10(d)(ii) pathway: is the director currently a director of an Australian company (verified via ASIC public register)?

A director nominee provider responding “I’m a NZ resident — see my NZ driver’s licence” is not enough if the substance test points the other way.

AML/CFT Implications for Director Services

The Anti-Money Laundering and Countering Financing of Terrorism Act 2009 captures trust and company service providers. A person who provides a director service for fee or reward is a reporting entity under s.5 of the AML/CFT Act 2009. Reporting entities must:

• Conduct customer due diligence (CDD) on the company’s beneficial owners;
• File suspicious activity reports;
• Submit annual AML/CFT reports.

A founder using a director-service provider should confirm AML/CFT registration with the relevant AML/CFT supervisor (DIA, FMA, or RBNZ).

Conclusion

Section 10(d) of the Companies Act 1993 is a hard statutory bar with two narrow paths: live in New Zealand, or live in Australia and direct an Australian company. The provision is enforcement-pragmatic, not protectionist, and the Registrar applies a substance test for both limbs. Foreign founders should plan their NZ entry on the assumption that they need a real, qualifying director — not a paper one. The Companies Office portal at https://companies-register.companiesoffice.govt.nz/ records s.10(d) compliance at incorporation and on every change of director thereafter.

Create your NZ company formation package with Scrib🐮

¥22,000/month pass for unlimited access to all 18 document types across 7 countries. Start Free Preview →

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, or lawyers.

Sources

• Companies Act 1993 (consolidated): https://www.legislation.govt.nz/act/public/1993/0105/latest/whole.html
• Companies Act 1993 s.151: https://www.legislation.govt.nz/act/public/1993/0105/latest/DLM320690.html
• Companies Office — Who can be a director: https://companies-register.companiesoffice.govt.nz/help-centre/company-directors/who-can-be-a-director/
• Companies Office — Starting a company: https://companies-register.companiesoffice.govt.nz/help-centre/starting-a-company/
• Companies Office hub: https://www.companiesoffice.govt.nz/