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To become, and remain, a look-through company (LTC), a company must meet the following criteria for the whole of each income year:

  • It must be a company but cannot be a flat owning company.
  • It must be a New Zealand tax resident and not treated as a non resident under any double tax agreement.
  • Its owners must have only look-through interests.
  • It must have 5 or fewer look-through counted owners, who must be either natural persons or trustees (including corporate trustees). Related shareholders can be counted as a single owner. An ordinary company cannot hold shares in a look-through company, but a look-through company can hold shares in another look-through company.
  • None of its owners can be tax charities or a Māori authorities, unless the tax charity or Māori authority are grandparented.
  • If foreign owners own more than 50% of the interests in the look-through company,  the look-through company must not earn more than $10,000 or 20% of its gross income for the year from overseas (whichever is greater).

If a look-through company does not meet these criteria it automatically stops being a look-through company.

To find out more about who can become a look-through company, check out our guide.

Last updated: 07 Jan 2021
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