Calls to toughen the rules on registering new companies are an overreaction, says Business NZ.The calls follow the revelation that Seychelles woman Stella Port-Louis registered 338 companies using the same Auckland address as SP Trading, the New Zealand c
Calls to toughen the rules on registering new companies are an overreaction, says Business NZ.
The calls follow the revelation that Seychelles woman Stella Port-Louis registered 338 companies using the same Auckland address as SP Trading, the New Zealand company linked to a plane seized in Thailand carrying 35 tonnes of North Korean weapons.
The companies were all linked back to Vanuatu company GT Holdings, run by New Zealander Geoffrey Taylor.
The ease of registering a company in New Zealand has already raised eyebrows at the Organisation of Economic Cooperation and Development, which says the rules leave gaps for money-laundering and the financing of terrorism.
Wellington accountant and liquidator Robert Walker said New Zealand was in "very serious trouble" if the regulations were not tightened.
"We are so close to becoming a pariah state, any New Zealand company will be suspect in international eyes," he told The Dominion Post.
The $150 cost of registering a company should be increased and directors should be required to be New Zealand residents, bringing New Zealand in line with Australian regulations, he said.
The regulations had led to billions of dollars in losses during the leaky building crisis, when individual homes were built by separate limited liability companies.
Homeowners seeking compensation were often left to sue companies with a registered capital of $100, he said.
Business NZ chief executive Phil O'Reilly urged caution in introducing an "excessive compliance burden" to current regulations.
"Claims that it is 'too easy' to set up a company or that the cost of registering a company should be increased are misplaced," he said.
"Making it more onerous to start a company in response to one incident would be an overreaction."
There was a competitive advantage in making it easy to start a business, and attracting and retaining foreign investment benefited all New Zealanders, he said.
"Vigorous enforcement of existing laws is the right response to criminal activity."
