Section 1: Summary of the review and proposals

The Companies Office performs an important role

The Companies Office administers a portfolio of ‘economy-supporting’ registers established by various Acts of Parliament. The Acts and associated regulations set out the obligations of businesses or entities who are registered and the functions of each Registrar. Regulations prescribe the fees and levies to be paid by users to recover the costs of operating the registers.

The Companies Office helps ensure that those ‘doing business’ in New Zealand are registered and accountable to the law, and that information about them is publicly available. It oversees New Zealand's core business information through the New Zealand Business Number (NZBN) register. Its functions are critical in building trust and confidence in our economy, helping to make New Zealand a place where doing business is easy, transparent, and fair.

Why do fees and levies need to be reviewed?

Most services (like filing an annual return or registering an entity) provided by the Companies Office are funded on a ‘user-pays’ basis through 2 types of third-party charges:

• Fees – that are collected to fund specific services (eg filing an annual return on a particular register); and
• Levies – that are collected and allocated to broader functions where they provide benefits to a ‘club’ of users (eg for regulatory oversight by the Companies Office).^[1]

Treasury and OAG guidance recommends that when the government sets fees and levies, it should do so at a rate that is no more than the amount necessary to recover costs incurred in providing the services to which they relate. However, because costs can change, it is important that fees and levies are regularly reviewed to check that they are covering costs and not resulting in over-recovery or under-recovery of costs and any fee adjustments made.

The Companies Office reviews fees and levies every 3 to 5 years to ensure an appropriate amount of cost recovery. In the last review in 2017, fees were set to recover less than the cost required to operate, to account for a level of over-recovery in previous years. This fluctuation in cost recovery is monitored through the Commerce and Consumer Affairs: Registration and Provision of Statutory Information memorandum account (the memorandum account).^[2]

Costs pressures considered in this review

The modelling of costs and the proposed fees and levies in this review have considered the current budget for the Companies Office registry services in the context of the shift of costs between registers from the overall position in 2017. The review found that the general inflationary pressures and other significant IT system upgrades can no longer also be absorbed within the current Companies Office budget. The cost model has incorporated savings in MBIE support cost as part of the government-wide savings initiative included in Budget 2024.

Increasing compliance and enforcement work

The Companies Office has monitored an increase in non-compliance relating to the Companies register. As a result, it should undertake more compliance and enforcement work in response to the growing complexity of non-compliance, including increasing director prohibitions and related Court proceedings. The Companies Office must also begin a programme of information and education to inform stakeholders (eg registry users – entities that are registered on 1 of the Companies Office registers) about recent legislative changes and their impacts (eg the introduction of the Incorporated Societies Act 2022) as well as undertake related compliance and enforcement work in those areas. Without further expenditure in these areas there is a risk that the Companies Office may not be able to take appropriate action, which could lead to a loss of integrity to the system and potential harm to the community.

Likely future infrastructure cost pressures

The Companies Office anticipates that over the next 3-to-5 years, aging systems require maintenance and improvement to ensure it continues to offer quality service delivery (eg improvements are planned to the Disclose register). MBIE also has a medium-term technology strategy to move from capital-based information technology (IT) systems to Software as a Service (SaaS) subscription-based services.^[3] Improvements to Companies Office register IT systems will focus on maintaining economies of scale within the base IT infrastructure to ensure that benefits are realised within any future significant changes to the registry system.

However, any significant future transformation of the Companies Office registry system would include public consultation as part of the business case development and consider any impacts on cost recovery settings.

What is within the scope of the review?

All fees and levies collected from third parties by the Companies Office across the registers set out in Figure 1 are within the scope of this review, with some exceptions.^[4] These registers are grouped according to 2 purposes.

The following regimes, registers or fees are not within the scope of this review:

• costs funded by the Crown – eg the Charitable Trust Boards register and sole traders applying for an NZBN;
• levies set to recover the costs of the Financial Markets Authority (FMA) or External Reporting Board (XRB);
• the Climate-related Disclosures regime and associated filing fee – this register came into force in January 2024, with fees set by regulations in October 2023; and
• late filing fees and infringement fees – these are penalty charges and not considered to be cost recovery.

What are the proposals?

In summary, this document proposes:

• A clearer and fairer cost recovery structure to enable full cost recovery which utilises:
  • levies (to recover the shared costs of the system); and
  • fees (to recover the remaining costs of specific registry services).
• An increase of $6 million in the Companies Office annual expenditure budget to meet identified forecast cost pressures including the need to make incremental upgrades to aging registry systems and undertake compliance, enforcement and education activities including those related to recent legislative changes.
• 2 new levies which meet some costs which have previously been met by fees:
  • a Companies Office levy (CO levy); and
  • a New Zealand Business Number levy (NZBN levy).
• 3 new fees for incorporated societies for new functions under the Incorporated Societies Act 2022:
  • annual return fee;
  • amalgamation fee; and
  • conversion fee.
• Adjustments to fees, where required, across all registers and revoking some fees for services that are no longer provided for some registers.

How will the proposals affect businesses and entities?

All proposed charges have been developed to make the best use of the money collected from users and provide a clearer understanding of what users are paying for. For some entities, this means that the total amount they pay annually will stay largely the same. Others may need to pay for services that they have not been charged for in the past which may mean a slight increase in existing fees, or new fees.

MBIE recognises that entities are facing rising costs of operating and ongoing economic impacts. We have taken these cost pressures into consideration in developing proposals and tried to ensure that fees and levies are fair and reasonable for users within the current economic environment. In some cases there are higher increases, however, it is important to note these increases are still below the rate of general inflation since fees were last adjusted in 2017.

Levies are outlined in Section 4. New and existing fees are outlined register-by-register in Section 5. A summary of all Companies Office unit costs, proposed fees and levies (including the total proposed charge where fees and levies are charged at the same time), and the current fees and levies are included in Appendix 2.

How will the proposals affect consumers?

Given the scale of any increases to charges payable, the Companies Office does not anticipate the cost of any increase being passed on to consumers in a noticeable way.

Footnotes

[1] Where a service or activity is provided and charged to a group of individuals that all benefit from it as a ‘club good’.

[2] A memorandum account is used by government to monitor expenditure and revenue from third-party fees and levies, usually over a 5-year period, to ensure that large fluctuations in fee amounts are avoided over time and that the overall balance trends towards zero. This memorandum account’s purpose is limited to the administration of legislation providing for the registration and provision of documents and information services for businesses and other registry services. Section 2 of this document outlines the function and status of the Companies Office memorandum account.

[3] SaaS is a software licensing and delivery model that allows users to connect and use centrally hosted cloud-based applications over the internet on an on-demand, subscription basis.

[4] The Companies Office also supports Crown-funded registers (meaning the Government provides revenue directly to meet costs). Fees and levies are not charged to users of these registers, and therefore are not within the scope of this review.

< Discussion document: Review of New Zealand Companies Office Fees and Levies (2025) | Section 2: Companies Office funding >