NEW ZEALAND Law and Practice Contributed by: Christopher Young, MinterEllisonRuddWatts
11. Execution Formalities 11.1 Authentication, Notarisation, Witnessing, Etc There are no formalities specific to franchise agree - ments; however, normal New Zealand contract law requirements apply, including the need for legal con - sideration and if there is past consideration. Generally: • authentication and notarisation of documents is not required under New Zealand law; • if the franchise agreement is executed as a deed, it will need to comply with the formalities for execu - tion of a deed under New Zealand law; and • companies will need to execute the agreement in accordance with their constitution. 11.2 Electronic Signatures Under New Zealand law, electronic signatures may be used to execute a franchise agreement, provided certain conditions are met. Specifically, the electronic signature must: • sufficiently identify the signatory and clearly indi - cate their approval of the relevant information; and • be appropriately reliable given the purpose and context in which the signature is required, as out - lined in Section 226 of the Contract and Commer - cial Law Act 2017. To avoid ambiguity, the franchise agreement should include a clause confirming that electronic signatures are acceptable. 11.3 Stamp Duties There are no document taxes or stamp duties in New Zealand.
Where New Zealand-sourced fees for services that are not characterised as dividends, royalties or interest for New Zealand tax purposes are paid to a non-resident franchisor, such fees may be relieved from New Zea - land taxation under an applicable double tax treaty under the standard “business profits” article, unless that item of income is attributable to a permanent establishment of the non-resident franchisor in New Zealand, or unless that item of income is otherwise dealt with in another article of the relevant treaty. New Zealand also imposes interim withholding taxes on certain contract payments made to non-residents that perform services physically in New Zealand, although exemptions may be obtained from the New Zealand tax authority if the non-resident establishes that its contract activity is treaty-protected (eg, not attributable to a permanent establishment in New Zealand under an applicable double tax treaty) or falls within certain prescribed limits under domestic tax legislation. 10.3 Foreign Currency Controls In New Zealand there are no specific laws or regula - tions (such as exchange control restrictions) in relation to payment of franchise fees. There is no requirement for payment of franchise fees to be made in New Zea - land dollars. Nonetheless, see 10.1 Restrictions or Limits on Fran- chisee Fees and Royalties regarding what franchisors should be aware of.
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