U.S. Investment in New Zealand: Tax Issues and Opportunities

This article discusses the New Zealand (NZ) taxation issues and consequences that should be considered by U.S. investors contemplating investing into NZ. Also discussed are the potential tax opportunities that may be available, particularly in respect of venture capital investors, and the issues and opportunities arising from the use of foreign trusts, both of which may allow the U.S. investor to derive income free of NZ tax. The article outlines the most common type of investment vehicles in NZ, including limited liability NZ incorporated companies, mutual funds, unit trusts, partnerships (both limited and unlimited liability), trusts, joint ventures and also investment as an individual, and the key issues arising in respect of the use of each type of entity for investment into NZ. The key features of the NZ/U.S. double tax agreement are also outlined.