10 December 2003 Media Statement

Special partnerships need updating

Work will be done on possible changes to Part II of the Partnership Act 1908, the law relating to special partnerships, Commerce Minister Lianne Dalziel said today.

Lianne Dalziel said that while New Zealand’s partnership laws were not fundamentally flawed, the special partnerships provisions of the outdated Partnership Act were inflexible and needed to be updated.

“The current provisions of Part II have the potential to impede the development of the venture capital and private equity industry because the special partnerships regime does not provide an adequate vehicle for venture capital investment funds.

“It also imposes unnecessary compliance costs on overseas investors seeking to invest in venture capital funds in New Zealand. The government wants to facilitate sustainable growth in New Zealand’s venture capital and private equity industry by providing a tax and regulatory environment that meets international standards,” Lianne Dalziel said.

The Minister said she had asked the Ministry of Economic Development to look at options for reforming special partnerships, to adopt a more flexible and modern limited partnership regime based on international standards. The Ministry is planning to undertake a targeted consultation process over the following month and report back to the Minister early next year.

Last month Deputy Prime Minister Dr Michael Cullen, announced the government’s policy to facilitate growth in the venture capital and private equity industry in New Zealand. Also announced was a proposal that would provide a tax exemption for the revenue account profits that certain non-residents (who are tax exempt in their own jurisdiction) derive from the sale of shares in small New Zealand companies.

ENDS

© Scoop Media