Opening A New Zealand Bank Account From Australia
You can never make its too easy for your customer and if your customers are in New Zealand they’ll probably prefer to pay their accounts into a New Zealand bank account.
This used to be a relatively easy process until New Zealand brought in its Anti-Money Laundering and Counterterrorism Financing legislation. This legislation makes it difficult for small Australian businesses to open bank accounts in New Zealand.
When dealing with Australians and Australian businesses, New Zealand banks now have to enter into a complex due diligence process to satisfy themselves that you don’t pose a risk under that legislation. Frankly, New Zealand banks consider that the cost of doing this due diligence is not cost effective.
For that reason Australian-based companies and small businesses will have great difficulty in getting a New Zealand bank account in their own name.
And, under the legislation, it is now a requirement to have a New Zealand bank account before you can get a New Zealand tax file number (IRD number). So if your Australian company is looking to register for New Zealand GST, it simply won’t happen unless you have a New Zealand bank account in the name of that Australian company.
Even though New Zealand banks share names, logos and colour schemes with Australian banks, they actually operate as completely separate entities. They have no integrated systems and no formal lines of communication. So, just because you have an account with Westpac in Australia does not mean you will be able to open an account with Westpac in New Zealand.
To get around this, New Zealand banks will encourage Australians to incorporate a New Zealand company. Opening up a New Zealand bank account for a New Zealand company is an easier process because, as the company is a legal entity in its own right, it is not, in itself regarded as a non-resident. That being said, you will need to be mindful that just because it is a New Zealand company does not necessarily mean that it won’t be regarded as an Australian tax resident as well. And this is another reason why you need advice before doing business in New Zealand.
Unless it is structured properly, a New Zealand company will result in Australian shareholders being double taxed. They will pay tax on New Zealand profits but that tax (referred to as imputation or franking credits) cannot be claimed in the tax return of an Australian individual or Trust.
So, if you are looking at opening a New Zealand bank account, we encourage you to give us a quick call (at no charge) so we can talk through the issues and how we can help.
How We Help Australians Do Business In New Zealand
Firstly, we’ll make sure your business is set up correctly in New Zealand. Whatever structure you use, no one helps more Australian businesses set up in New Zealand than we do.
We’ll make sure you use the most convenient and cost-effective structure for tax purposes. We’ll set it up quickly, correctly so you can focus on your business.
Secondly, will provide the necessary resolutions and letters to assist you in opening up a New Zealand bank account. Because we’re helping small Australian businesses like yours every single day, we can often assist you to set up a New Zealand bank account without you having to leave Australia.
We often know how the New Zealand and Australian banks work in these types of transactions better than your bank’s customer relationship manager!
Thirdly, we’ll handle your New Zealand tax registrations. We are usually able to obtain a New Zealand tax file (IRD) number and register you for all the relevant New Zealand tax types within a day or two. But that process can’t start until you have obtained a New Zealand bank account in the name of the business.