Being profitable in business is all about making the most of new opportunities, and this applies only more so to international business. Unfortunately, with international tax planning and business structuring, new opportunities do not arrive often, with the basic tools and structures having been available for years. However, the New Zealand government has recently opened such an opportunity, with the creation of New Zealand Look Through Companies.

New Zealand Look Through Companies (LTC) are a pass-through entity, meaning that they are ignored at a company level for tax purposes, as all the incomes or losses are “passed-through” to its shareholders. Instead of the company being subjected to corporate taxes, the transferred profits are the responsibility of the shareholder to declare on their own personal tax return.

For international investors the new opportunity means that if a New Zealand LTC is established and conducts business outside of New Zealand, and passes the raised profits to overseas shareholders, there will be no arising tax liabilities on the distributions in New Zealand. In effect, the LTC allows an international investor to operate a New Zealand business entity and face 0 percent taxes in New Zealand. As New Zealand is an upstanding member of the OECD and is not included on any tax “blacklists”, it could be very beneficial to establish a New Zealand LTC and enjoy its unique tax benefits.