Kia ora! If you’re a business owner based in Aotearoa (New Zealand) but operating in the USA, navigating compliance, legal, and beneficial ownership reporting requirements can be a daunting task. Understanding the differences in regulations between the two countries can be overwhelming, but it’s crucial to ensure that your business is operating within the law and meeting all necessary obligations.

From understanding the Foreign Account Tax Compliance Act (FATCA) to ensuring compliance with the Securities and Exchange Commission (SEC), staying on top of these requirements is essential for the success of your business. In this blog, we’ll explore the key considerations and provide practical tips to help you navigate the complex world of compliance and reporting when operating internationally. Stay tuned for valuable insights and guidance tailored specifically for Kiwi business owners like yourself.

Registration Requirements

The United States consists of 50 states and 5 territories, each with its own set of business regulations. To operate legally, businesses must adhere to both state-specific rules and federal laws.

State-Level Registration:

When establishing a business presence in the United States, businesses from New Zealand must complete state-level registration in any state where significant business activities occur. This requirement typically applies if your company:

• Has a physical presence in the state
• Frequently meets with clients in the state
• Derives a significant portion of revenue from the state
• Has employees working in the state

Incorporating your New Zealander Company in the US

Even if none of the specific criteria apply, a New Zealander company must still choose a home state for registration when conducting business in the US. This involves forming a U.S. entity, such as a corporation, LLC, or other business structure, in that state. This registration ensures that the company is officially recognized and compliant with US regulations, regardless of its level of business activity in any individual state.

The newly formed U.S. entity will operate as a subsidiary of the foreign company. This means that while the U.S. entity is legally independent, it remains under the ownership and control of the parent company based in New Zealand. This structure allows the company to conduct business in the US while maintaining its international headquarters.

We recommend using Northwest Registered Agent if your foreign company needs to incorporate. They offer expert guidance and can serve as a reliable registered agent for your business, ensuring compliance and smooth operations.

Federal Requirements

In addition to state requirements, New Zealander companies must also comply with federal regulations:

• Federal Tax ID: Obtain an Employer Identification Number (EIN) from the IRS. This number is essential for tax reporting and opening U.S. bank accounts.
• Industry Regulations: Companies may need to follow specific federal regulations depending on the industry. For example:
• Import/Export Laws: If the company is involved in importing or exporting goods, it must meet U.S. customs regulations. This includes adhering to rules for tariffs, duties, and necessary documentation.

Beneficial Ownership Information Reporting Requirements

For New Zealander businesses conducting operations in the U.S., adhering to Beneficial Ownership Information Reporting (BOIR) requirements is crucial. The Corporate Transparency Act mandates that companies disclose the individuals who own or control them. This applies to most entities, including those that are incorporated or registered in any U.S. state. The goal is to enhance transparency and combat illicit activities such as money laundering and terrorism financing.

A beneficial owner is an individual who controls the company or owns 25% or more of its shares, either directly or indirectly. For compliance with BOIR requirements, businesses must report information about these individuals, including their names, addresses, and identification details. Failure to file this report can result in significant penalties and legal consequences. Therefore, companies from New Zealand need to ensure they meet these reporting obligations promptly and accurately.

For your convenience, you can file your Beneficial Ownership Information Report directly on our website. Click here to complete the process in just a few minutes and ensure your business complies with U.S. regulations.

Additional Considerations for New Zealander Businesses:

Tax Treaties

The tax treaty between the United States and New Zealand offers significant advantages for businesses operating across both countries. This agreement helps prevent double taxation and provides clarity on tax obligations, making it easier for New Zealand companies to navigate the U.S. tax landscape. By reducing withholding taxes on certain types of income and establishing clear guidelines for determining tax residency, the treaty promotes smoother cross-border transactions and investments. For more detailed information about the specific provisions and benefits of this tax treaty, click here to access the official IRS documents.

Trade Considerations

As a New Zealand business looking to engage in trade with the USA, it’s crucial to be aware of the existing trade agreements between the two countries. The United States-New Zealand Free Trade Agreement, which came into effect in 2022, provides significant benefits for businesses on both sides. This agreement eliminates tariffs on most goods traded between the two nations, streamlines customs procedures, and enhances intellectual property protections. Additionally, it offers improved market access for services and investment. However, it’s important to note that certain sectors may still have specific regulations or restrictions. Therefore, it’s advisable to consult with trade experts or relevant government agencies to ensure compliance with all applicable rules and to take full advantage of the opportunities presented by this trade agreement.

Your Path to Compliance: Key Takeaways for New Zealander Businesses in the U.S.

Operating a New Zealander business within the USA requires careful attention to legal obligations, from establishing your home state to incorporating and filing a beneficial ownership report. Meeting these requirements is essential for ensuring compliance and securing your business’s success in the American market. By understanding and adhering to these steps, you can confidently navigate the complexities of doing business in the U.S. and focus on growing your enterprise.

Ready to get started? Click here to file your BOIR in just a few short minutes. We make the process easy, fast, and secure so you can focus on what matters—your business.