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Key Organization
points
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A Limited
Partnership can be registered in New Zealand as either a Limited
Partnership or an Overseas Limited Partnership.
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All the general
provisions applying to NZ Companies generally apply to Limited
Partnerships including; registered office, Statutory Records,
place of business, place for service of documents.
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All General
Partners are liable for the activity of the Limited Partnership.
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There must be
one, or more General Partners and one, or more Limited Partners.
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All partners
must be real persons but NZ residency of partners is not a
requirement.
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Overseas
Limited Partnerships must appoint a real person, or company to
accept service in NZ.
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Proper
accounting records must be maintained and available in New
Zealand of all activity in NZ.
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The name of the
partnership must end with one of: Limited Partnership, L.P. or
LP.
Taxation
While tax
legislation is extremely complicated and is aimed squarely at New
Zealand tax residents, the following excerpts from the Act are
believed to be the key points for overseas partners.
26 Classes of
income treated as having New Zealand source
(1) After section
YD 4(17), the following is inserted:
Income from New
Zealand partnerships
(17B) Income has a
source in New Zealand if, treating all of the partners of a New
Zealand partnership as resident in New Zealand, the income is
treated as having a source in New Zealand under another provision of
this section. The application of the other provisions of this
section is unaffected if this subsection does not apply.
(3) In the case of
partners;
(a) if the
partnership of the partner is a limited partnership registered under
the Limited Partnerships Act 2008 or is a partnership that would
carry on a business in New Zealand ignoring section HG 2 of the
Income Tax Act 2007, then the partners must make a joint return of
income that includes;
(i) the total
amount of income derived by the partners as members of the
partnership; and
(ii) the partners’
partnership shares in the income; and
(iii) a summary of
the deductions of each partner:
(b) there is no
joint assessment, but each partner must make a separate return of
income under section 33, including the income derived by the partner
as a member of the partnership, and the partner’s deductions.
Each
partner is separately assessed (the same as with a Delaware LLC).
(4) In any other
case, each person shall make a separate return taking into account
that person’s share of the joint income and deductions. Each person
is separately assessed.
Our Recommendation
A New Zealand
Limited Partnership may become a lesser known legal structure
available to overseas residents who do not wish to do business in
New Zealand and who do not have New Zealand partners.
Registering an
Overseas Limited Partnership in New Zealand may have advantages for
residents of some countries wishing to overcome more onerous
conditions at home.
Please take advice
from your own advisers who should be very familiar with your
circumstances. We cannot advise on the laws of all countries, only
the law in New Zealand.
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