Published: Jan 2026
New Zealand is often the first international expansion for Australian companies. The time zones align, the culture is familiar, and the talent pool is strong. But when it comes to actually employing people there, many Australian founders assume the process is more complicated than it really is.
Setting up a New Zealand subsidiary is straightforward, relatively inexpensive, and usually completed in a few weeks. Once established, you can employ your New Zealand team directly instead of paying ongoing fees to a third-party provider.
This guide walks through the practical steps. No twenty-page legal memos, no unnecessary complexity. Just what you actually need to do.
Australian companies typically reach this decision for a few reasons.
1. Cost reduction. If you are using an Employer of Record provider, you may be paying $600 USD or more per employee per month in management fees, plus insurance, GST, and other charges. For a team of five to ten people, that can add up to $100,000 or more annually in fees alone. Direct employment can eliminate these ongoing costs.
2. Operational control. When payroll issues occur with an EOR, you are dependent on their support queue. Salary adjustments may not be applied correctly. Invoices may include unexpected charges. Support responses can take days or weeks. With direct employment, you control the payroll process and can address issues immediately.
3. Employee security and retention. When employees are contracted directly to your entity rather than through a third-party provider, they feel more secure. Being employed by a staffing company can feel impersonal. Your team members receive payslips from a company they have never heard of, and their employment agreement is with a provider rather than with you. Direct employment signals commitment and makes your New Zealand team feel like a real part of the company. For senior hires especially, this matters.
Here is what the process typically involves.
Estimated time: 1-2 weeks
New Zealand company incorporation is done online through the Companies Office. The government fee is approximately $130 NZD including GST ($10 plus GST for name reservation and $118.74 plus GST for incorporation). The process typically takes one to two weeks.
A common approach is for the Australian parent company to hold 100% of the shares in the New Zealand subsidiary, though other structures may suit different circumstances. There is no minimum capital requirement and no restriction on foreign ownership.
For directors, you have options. You can appoint a New Zealand resident director, or you may be able to use the trans-Tasman director exemption. This exemption can allow an Australian resident who is already a director of an Australian company to serve as a director of a New Zealand company. Many Australian founders may qualify under this rule, though you should confirm your eligibility.
You will need to choose a company name (which can be reserved for $10 plus GST while you prepare documents), registered office address, and share structure.
Estimated time: 1 week
Once your company is incorporated, you register with Inland Revenue (IRD) as an employer. This enables you to withhold PAYE (Pay As You Earn) tax from employee wages and remit it to IRD.
You may also need to register for GST depending on your expected turnover and whether you will be invoicing New Zealand customers. The GST registration threshold is $60,000 NZD annual turnover. For subsidiaries that only employ staff and do not generate local revenue, GST registration may not be immediately necessary.
The IRD registration process is done online and typically completed within a few days.
Estimated time: 1 week
KiwiSaver is New Zealand's workplace retirement savings scheme. It is similar to superannuation in Australia, though the mechanics differ.
Employers must contribute to KiwiSaver for all eligible employee members. The current minimum contribution rate is 3% of gross pay. As confirmed in Budget 2025, this rate increases to 3.5% from 1 April 2026 and to 4% from 1 April 2028.
Unlike Australian superannuation, KiwiSaver is voluntary for employees. They can choose to opt out. However, new eligible employees are automatically enrolled, and if they remain enrolled, you must make employer contributions.
Employees can choose their own contribution rate (3%, 4%, 6%, 8%, or 10%) and their own KiwiSaver provider. As an employer, you deduct their contribution from their wages and remit it along with your employer contribution to IRD, which then passes the funds to the employee's chosen provider.
Estimated time: 1 week
ACC (Accident Compensation Corporation) is New Zealand's no-fault accident insurance scheme. All employers must pay ACC levies.
There are two components:
You register for ACC as part of your employer registration process. Levies are calculated based on your payroll and invoiced by ACC.
Estimated time: 1-3 weeks
You need a way to pay your New Zealand employees in New Zealand dollars.
The straightforward approach is to open a New Zealand bank account in the name of your subsidiary. New Zealand banks require standard AML (anti-money laundering) checks, which can sometimes be completed remotely if you have an existing Australian banking relationship with an institution that operates in both countries.
Alternatively, if your Australian company already holds a NZD account, you could potentially use that temporarily while you establish the subsidiary's banking. This is not ideal as a long-term solution, but it can bridge the gap during setup.
Estimated time: 1-2 weeks
Your New Zealand team members need to become employees of the new subsidiary. This means issuing new employment agreements under the New Zealand entity.
New Zealand employment law differs from Australian law in several ways. Key differences include:
If you are transitioning existing staff from an EOR, the process is usually straightforward. The employee resigns from the EOR arrangement and signs a new contract with your subsidiary. Continuity of employment can often be maintained for the purposes of leave entitlements and tenure.
This transition is often welcomed by employees. Moving from a third-party provider to direct employment with your company gives them greater security and a clearer sense of belonging. They receive payslips from your entity, their employment agreement is with you, and they know exactly who their employer is.
Standard employment agreement templates are available from Business.govt.nz and can be adapted for your needs. For senior or complex roles, you may want a New Zealand employment lawyer to review the contracts.
Your New Zealand subsidiary will need to file annual financial statements and a tax return (IR4) with IRD. It will also need to file an annual return with the Companies Office.
This does not require a full-time accountant relationship. Most small subsidiaries engage a New Zealand accountant on an annual basis to prepare the financial statements, complete the tax return, and handle the Companies Office filing.
Costs for this vary depending on the complexity of your operations, but for a straightforward payroll-only subsidiary, annual accounting fees typically range from $2,000 to $5,000 NZD.
Transfer pricing becomes relevant when your Australian and New Zealand entities transact with each other. For example, if your Australian company charges the New Zealand subsidiary for shared services like software development or management time, or vice versa.
The general principle is that these charges should be at arm's length, meaning what an unrelated party would charge for similar services.
For most small to medium businesses, a simple documented approach can work, but we recommend obtaining assurance from a qualified tax professional before finalising your structure. They can confirm your approach is appropriate and defensible for tax authorities in both countries.
A proportionate approach might involve having a specialist review your proposed structure and provide written confirmation that the methodology is sound. This gives you professional backing without excessive cost, and ensures you have documentation to support your arrangements if questioned.
The key is to get the structure reviewed before you start and document your reasoning. You can refine the details as your New Zealand operations grow.
Timeline (total elapsed time: 4-6 weeks)
Costs
If you are currently paying $8,000 to $12,000 NZD per month in EOR fees, the setup costs can pay for themselves within the first few months.
Which entity structure should I use?
A common approach for Australian companies is a standard New Zealand limited company with the Australian parent as sole shareholder. This is straightforward and provides liability protection. More complex structures involving limited partnerships or look-through companies are less common for simple employment subsidiaries, but may suit specific circumstances. We recommend discussing your options with a professional advisor.
Do I need a New Zealand accountant from day one?
You do not typically need an accountant for the setup process itself. You need one for annual compliance once the financial year ends. Some companies engage an accountant early just to have a local contact, but it is not strictly necessary until you need to file your first return.
What happens to existing employee entitlements?
If your staff are transitioning from an EOR, their leave balances and tenure should generally transfer to the new employer. The specifics depend on your employment agreements and how the transition is structured, but continuity is usually preserved.
Do I need to visit New Zealand?
Most of the setup process can be completed remotely. Some banks may require an in-person visit for account opening, though this varies by institution. If you have team members already in New Zealand, they can sometimes assist with local requirements.
Once the subsidiary is set up, the ongoing work is comparable to what you already do in Australia. Run payroll each pay cycle. Submit PAYE and KiwiSaver contributions to IRD. File employer returns. Pay ACC levies when invoiced.
If you already have a finance team or external bookkeeper managing your Australian payroll, adding New Zealand is incremental rather than transformative. The systems and processes are similar.
The difference is that you now control the process. When something needs to change, you change it. When an employee has a question about their pay, you answer it directly instead of escalating to a third-party provider. And your team knows they work for you, not for an intermediary.
The government incorporation fee is approximately $130 NZD including GST. If you use a service provider to coordinate the setup, including IRD registration, KiwiSaver, ACC, and employment contracts, expect to pay $3,000 to $10,000 NZD depending on complexity. Annual accounting fees for ongoing compliance range from $2,000 to $5,000 NZD.
The full setup process typically takes four to six weeks from decision to first payroll. Incorporation itself takes one to two weeks. The remaining time covers tax registration, banking, and employment contract transitions.
Yes. There are no restrictions on foreign ownership of New Zealand companies. An Australian parent company can hold 100% of the shares in a New Zealand subsidiary, which is a common structure for Australian businesses expanding across the Tasman.
Not necessarily. Under trans-Tasman director rules, an Australian resident who is already a director of an Australian company may be able to serve as a director of a New Zealand company without needing a local New Zealand director. However, eligibility should be confirmed for your specific circumstances.
Both are workplace retirement savings schemes, but KiwiSaver is voluntary for employees (they can opt out) while Australian super is compulsory. The current minimum employer contribution for KiwiSaver is 3%, rising to 3.5% from April 2026 and 4% from April 2028. Contributions are paid to IRD, which distributes them to individual provider funds chosen by employees.
ACC levies fund New Zealand's no-fault accident compensation scheme. Employers pay an employer levy (typically 0.5% to 2% of liable earnings depending on industry) to cover work-related injuries. An earner levy is also deducted from employee wages to cover non-work injuries, increasing to 1.75% from 1 April 2026.
GST registration is required when annual turnover exceeds $60,000 NZD. If your New Zealand subsidiary only employs staff and does not generate revenue from New Zealand customers, GST registration may not be required. We recommend confirming your specific situation with a tax advisor.
We recommend obtaining professional advice from a qualified tax specialist on your entity structure, particularly around transfer pricing if your Australian and New Zealand entities will transact with each other. This provides assurance that your arrangements are appropriate and defensible. The operational setup (incorporation, payroll, KiwiSaver, ACC) can often be handled by a service provider without requiring ongoing legal or tax advice.
Employees contracted directly to your entity typically feel more secure than those employed through a third-party provider. Direct employment means their payslips come from your company, their employment agreement is with you, and they have a clear sense of who their employer is. This signals commitment and helps with retention, particularly for senior hires who want job security and a genuine connection to the business.
Scale Suite provides practical, end-to-end operational support for Australian businesses setting up New Zealand operations. We partner with New Zealand-based accountants for annual financial statements and tax returns. You get local expertise without needing a full accounting firm on retainer.
For structuring decisions and transfer pricing, we recommend obtaining professional advice from a qualified tax specialist. We can help coordinate this process and then handle the operational implementation.
Our approach is designed for growing Australian SMEs who want to employ directly in New Zealand without becoming experts in Kiwi compliance. We handle the operational detail so you stay focused on your business.
If you are considering a New Zealand subsidiary or looking to transition away from an EOR provider, contact us at hello@scalesuite.com.au or visit scalesuite.com.au.
This article provides general information about the process of setting up a New Zealand subsidiary. It is not tax, legal, or accounting advice. Rates and rules are current as of January 2026; check official sources for updates. We recommend consulting qualified specialists for structuring decisions and annual tax obligations.
Scale Suite delivers embedded finance and human resource services for ambitious Australian businesses.Our Sydney-based team integrates with your daily operations through a shared platform, working like part of your internal staff but with senior-level expertise. From complete bookkeeping to strategic CFO insights, we deliver better outcomes than a single hire - without the recruitment risk, training time, or full-time salary commitment.
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