Is it better to be a sole trader or start a company in NZ?
It depends on your situation. Being a sole trader is the simplest and cheapest option, but you are personally responsible for all the business's debts. A company is legally separate from its shareholders. A company is best if you may want to sell the business or bring in investors later. You can try the free Choose Business Structure tool on business.govt.nz, or talk to an accountant or lawyer.
Official figures
- Do sole traders need to register?
- No. You do not need to register yourself or your business with any government agency. You only need to tell Inland Revenue that you have started working for yourself.1
- What sole traders need
- A personal IRD number (for income tax and GST), any government licences and permits your business needs, and any qualifications or registrations your industry requires.1
- NZBN for sole traders
- Optional, but recommended.1
- Company name reservation fee
- NZ$10 (plus GST)6
- Company registration fee
- NZ$118.74 (plus GST)6
Official sources
- Becoming a sole traderBusiness.govt.nz (MBIE) · business.govt.nz
- Incorporating a companyCompanies Office · companies-register.companiesoffice.govt.nz
- Who can be a directorCompanies Office · companies-register.companiesoffice.govt.nz
- Registering for GSTInland Revenue · ird.govt.nz
Read the full guide: Starting a business: sole trader, company and GST registration →
People also ask
- Where do I register as a sole trader in New Zealand?
- How much does it cost to register a company in NZ, and how do I do it?
- At what turnover do I have to register for GST?
- My business earns less than NZ$60,000. Can I register for GST voluntarily?
- I don't live in New Zealand. Can I be the only director of an NZ company?
- What is provisional tax, and do I pay it in my first year?
Answers are based on official New Zealand government pages. Check the official source before you act. This is not immigration, legal or tax advice.
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