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Overseas technology companies will have to find Kiwi directors within New Zealand...

Google, Microsoft, TelstraClear, Cisco and Dell are among technology companies that would have to find Kiwi directors for their New Zealand businesses if moves to tighten up company registration processes are approved.

Commerce Minister Simon Power is considering whether all New Zealand-registered businesses should be required to have at least one New Zealand-resident director after receiving a report from officials which engaged in "targeted consultations".

The rule change is one of a package of measures floated by Mr Power in January, after it was discovered an Auckland-registered shell company, SP Trading, had been implicated in shipping arms to Iran.

Mr Power said it would be consistent with requirements in other countries, including Australia, Canada and Singapore.

A spokesman for the minister says that if the Government decides to press ahead, that would probably require a change to the Companies Act and interested parties would be able to have their say at a select committee.

Mr Power said there had been an increase in the number of businesses registering with the Companies Office that had only overseas shareholders and directors. They comprised about 5 per cent of more than 1125 firms that were newly registered in January.

Microsoft, Cisco and Google's New Zealand subsidiaries all have just two directors – the minimum number allowed – all based in the United States.

Google and Dell refused to comment.

Microsoft New Zealand managing director Kevin Ackhurst says it would comply with any requirements and didn't see any particular upside or downside "but I haven't seen the full details of the proposed changes, so it is hard to comment on what might come in place".

Cisco New Zealand managing director Geoff Lawrie says the company would not shirk from legal responsibilities but he is unsure what having a New Zealand director would mean.

"We don't have a board structure. That is consistent with just about every international organisation represented here I would think."

Mr Lawrie says that from the point of view of preventing undesirable activities by shell companies, it might be more important that companies had a "responsible officer" in New Zealand rather than a resident director.

TelstraClear believes efforts to harmonise regulations between Australia and New Zealand could mean that having only Australian directors may remain allowable, even if the law is changed.

"The governments of New Zealand and Australia are working toward a single economic market framework to ensure transparent and ethical business practices," says spokesman Chris Mirams. "The initiative is designed to form a seamless trans-Tasman environment for established, credible businesses such as TelstraClear, that operate on both sides of the Tasman."

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Institute of Directors chief executive Nicki Crauford forecasts some overseas firms might seek to appoint a "token" local director if caught by the rule change. But she would not recommend anyone take on a company directorship without proper payment as a board seat comes with the risk of "huge liabilities".

The practicalities for overseas-owned firms were unclear. "If they currently hold their board meetings in the United States, then are they going to fly a New Zealand resident to those once a month and is it going to be practical for that person to be legitimately involved in the business?

"I suppose they could dial-in, but I guess if they never physically go to a board meeting they would not be terribly effective in the role."