A license is required in New Zealand in order to provide certain financial services. Companies that have to obtain a financial service provider license in New Zealand (referred to as a FSP in NZ) must apply for it under the Financial Service Providers Act 2008.
Our team assists applicants who want to obtain a New Zealand FSP license and can offer complete guidance throughout the process. In addition to the licensing assistance, we can also offer specific services for company formation in New Zealand.
Read below to learn more about FSP registration in NZ and the main steps you will need to follow to apply for this particular license.
Table of Contents
Services offered by a FSP in NZ
A financial service provider in New Zealand is an individual or a legal entity that offers certain types of services. Examples of financial services for which a license is required include the following:
- banking;
- insurance;
- financial advice;
- operating a financial product market, offering prescribed intermediary services, etc.
A New Zealand FSP can be licensed by the Financial Markets Authority, or by the Reserve Bank of New Zealand. Moreover, some types of financial services can be offered when the provider is certified by the Commerce Commission.
In addition to proper licensing, registering on the Financial Services Provider Register is required when:
- The financial services will be offered to individuals in New Zealand above a minimum threshold;
- The provider is required to report its financial services under the AML/CFT Act;
- The provider has the proper licenses to offer the said financial services.
Offering financial services in NZ without complying with the registration requirements results in fines or imprisonment.
Investors who want to set up a company in New Zealand that will be engaged in these types of activities can discuss the main company formation registration requirements with our local agents.
Registration requirements
The process for FSP registration in NZ depends on whether the submission is made as an individual or as a business. Registration from overseas is also possible, subject to conditions.
Before starting the steps for registration as a financial service provider with the authorities, the business founders have to complete the steps required to open a business in New Zealand. Moreover, they also need to decide what financial services the company will be offering.
We remind those interested that the following business forms are considered registered entities and can therefore become a FSP in New Zealand:
- companies;
- overseas companies registered in New Zealand (more information on overseas FSPs in NZ is available below);
- building societies and credit unions;
- limited partnerships.
How to obtain a financial service provider’s license in New Zealand
Companies register as financial service providers with the Financial Service Providers Register, belonging to the Companies Office. As a result of this registration, they are permitted to offer the intended financial services (therefore are licensed to do so). Additional licensing may be needed from the Financial Markets Authority or the Reserve Bank.
Our team specializing in company registration in New Zealand lists the main issues to take into account when preparing to register as an entity that will offer financial services in NZ:
- The company has to provide all its relevant registration information, such as the New Zealand Business Number, and other details;
- The company directors and other staff will need to submit certain key information. A criminal history verification may be required, however, certain information will remain confidential;
- The business must offer information about the types of financial services it will provide and whether these services will be offered to retail and/or wholesale clients;
- The company will also have to submit a declaration that it meets the threshold to act as a FSP in NZ (you can read more about this below), and information about its annual filing obligations.
If the business satisfies all the conditions, the application process can be commenced once all the documents have been gathered.
Reporting requirements for an FSP in New Zealand
Financial service providers are considered reporting entities for the purposes of the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Act 2009.
A company that has followed the process for FSP registration in New Zealand will be asked to declare if it falls under the scope of the Act.
If you open a business in New Zealand that will offer financial services, our team can provide you with details on the types of reporting entities. For example, financial advisers are not reporting entities. However, it is more common for individuals to be registered as financial advisers, not companies.
Reporting entities are supervised by the Financial Markets Authority, the Reserve Bank of New Zealand, and the Department of Internal Affairs.
Some of the obligations under the AML/CFT Act are summarized below by our team specializing in New Zealand company formation:
- Complete a written risk assessment;
- Implement a compliance programme;
- Observe the annual reporting obligation;
- Meet the independent audit obligation and the prescribed transactions reporting obligation.
In addition to following the requirements for preventing money laundering and terrorism financing, a financial service provider in New Zealand will have to join a dispute resolution scheme if it offers financial services to retail clients. This membership needs to be confirmed within 10 days of registering as an FSP in NZ.
FSP registration fees for NZ companies
When registering as a financial service provider the company will have to pay the following fees:
- The $300 application fee (to which GST is added);
- A levy for the Financial Markets Authority of $600 (plus GST);
- The criminal history check fee of $11.30 (plus GST) – This is not needed if the applicant has already undergone a criminal history check in the last 36 months.
An online services account opened with the Financial Service Providers Register is required to apply for registration. The account is set up before the applicant starts the submission.
New Zealand FSP registration for overseas companies
The following minimum annual business threshold applies for registration as a New Zealand FSP in the case of service providers from overseas:
- Have 10 NZ resident financial services clients;
- Have $10,000 of total financial services transactions with the NZ resident clients;
- Achieve half of the aforementioned threshold within 6 months of registration.
A foreign company cannot register as an FSP in NZ if it only offers financial services to offshore customers, nor if it is an offshore FSP that only provides services to wholesale clients in New Zealand.
A financial service provider that is registered, but not licensed in New Zealand, will disclose this on its website. Likewise, it will also inform potential clients if it does not have a New Zealand dispute resolution membership. This information, and other details for clients, make up a warning statement that needs to be properly issued to customers. Failure to send out this statement can result in deregistration.
Our experts in company formation in New Zealand can give you more details on registering financial service providers from overseas.
Contact us if you are interested in FSP registration in NZ and if you require assistance throughout all the company formation stages.