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Directors play a vital role in any company and have responsibility over key operational and strategic decisions. For that reason, there are some requirements in New Zealand about who can become a director, and how they can act. This article sets out how to know whether you are eligible to become a company director, even if you are a permanent resident or someone who does not possess New Zealand citizenship.

What Is a Company Director?

A director is a person appointed or elected to manage and lead a business. Every registered company in New Zealand has to have at least one director. As a director, your duties can be varied and they may depend on the type of directorship, for example, nominee directors. Usually, directors determine the business’ strategy, its policies, make key decisions at board meetings and act as a liaison between the company and its shareholders.

Directors must act in the best interests of the companies they represent, and owe special legal duties to shareholders under the Companies Act. They have to take care and diligence when exercising their duties for the company, and ensure the business complies with the law. Directors may receive director’s fees or other forms of remuneration for the work they perform.

Can You Become a Company Director if You Are Not a Permanent Resident?

In many cases, you can become a company director if you are not a permanent citizen. However, all New Zealand companies must have at least one resident director who either lives:

  • in New Zealand; or
  • in Australia, and is also a director of an Australian company.

If the company already has a director who fulfills one of the above criteria, you will be able to be a company director even if you do not live in New Zealand (non resident director).

In terms of what qualifies as “living in New Zealand” for the purposes of the above criteria, there is guidance from the New Zealand Companies Office. If you have lived in New Zealand for a total of 183 or more days in the last 12 months, the Companies Office will conclude you satisfy the residency requirement.

In other words, if you have lived in New Zealand for at least half of the last year, you should qualify to become a New Zealand resident director.

What if You Have Not Lived in New Zealand for the Required Time?

The Companies Office in New Zealand is generally willing to consider applications for exemptions to the residency rule, even if you are not a permanent resident in New Zealand. They will request additional information if you request an exemption. This includes:

  • how much time you spend in New Zealand;
  • what your connection and ties to New Zealand are;
  • your activities in New Zealand; and
  • how you can meet your obligations to the company of which you are seeking to be a director.

If you are not sure whether your personal circumstances mean you pass the residency test for becoming a company director, seek legal advice before making an application to the Companies Office. 

If You Are Not a New Zealand Citizen

You can still become a company director even if you are not a New Zealand citizen If you reside in New Zealand, but are not a citizen, you can usually become a company director. 

Who Cannot Become a Company Director?

There are some restrictions on who can become a company director in New Zealand. The most common reasons include if you:

  • are under 18;
  • are bankrupt;
  • have been convicted of a crime involving dishonesty in the last five years; and
  • have been banned from managing a company by a government body like the Financial Markets Authority.

Key Takeaways

In many circumstances, you can become a company director in New Zealand if you do not reside permanently in the country, or if you are not a New Zealand citizen. New Zealand law requires at least one director to either live:

  • in New Zealand; or
  • in Australia, and also be a director of a company incorporated in Australia.

It does not matter whether you are a New Zealand citizen or not for the purpose of this residency test. The key factor is whether you have lived in the country for at least half of the previous year. If so, the Companies Office is likely to find that you satisfy this residency requirement. If you want to know more about the process and requirements to become a director in New Zealand, feel free to call LegalVision’s business lawyers on 0800 005 570 or complete the form on this page.

FAQs

Can I become a company director in New Zealand even if I am not a citizen?

Yes. At least one director of a NZ company must be resident in New Zealand, but they do not have to be a citizen.

How long do I have to live in New Zealand before qualifying as a ‘resident’ company director?

Usually, you have to live in New Zealand for at least half (183 days) of the previous year. However, the Companies Office does consider applications for exceptions to this.

Who cannot be a company director in New Zealand?

Anyone who is too young (under 18), bankrupt, or convicted of certain crimes involving dishonesty.

How many directors does a company have to have in New Zealand?

Companies must have at least one director, but there is no minimum requirement other than that. In other words, just one director is sufficient under the law.

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