The 2013 Fiji Budget (Budget) was announced in November 2012 with the theme of “Investing in Our Future”. While there were many key changes which continue to make Fiji an attractive place for investing, most importantly the minimum investment requirement of $250,000 for foreign investors was removed.
Removal of minimum investment requirement
The Foreign Investment Act 1999 (as amended) and Foreign Investment Regulations 2009 provide that activities in Fiji can be divided into different groups:
- Reserved Activities: these activities are prescribed for Fiji citizens only and include cafeterias, taxi businesses, electrical and plumbing businesses, bakeries and nightclubs;
- Restricted Activities: these activities have certain conditions attached for foreign investors (for example, owner’s contribution or paid up capital for companies in the form of cash.) Activities include fishing, forestry, manufacturing tobacco and tourism as well as certain services such as real estate management and construction;
- Unspecified Activities: these activities comprise almost 90% of the foreign investment applications received by Investment Fiji and cover all activities other than those listed under the Reserved and Restricted Lists. The FJD 250,000 minimum investment requirement has now been removed from the Unspecified Activities list.
Since the publication of the Budget, Investment Fiji has assessed applications without requiring the minimum investment requirement for Unspecified Activities to be satisfied. However, it’s expected that new regulations will soon come into force to officially remove the requirement.
Why is Fiji an attractive investment destination according to Investment Fiji?
These are just some of the reasons why Fiji is an attractive investment destination:
- Fiji is the centre of trading in the South Pacific for the South Pacific region, Asia, USA and Europe. As well as being the centre of trade, it’s also transformed into a hub for global communications and transportation routes.
- There’s a tailored package of trade and investment incentives available including duty concessions, investment allowances, tax exemptions and tax free regions.
- Corporate tax has been lowered from 28% to 20%.
- A foreign company that establishes or relocates its headquarters to Fiji is subject to a low corporate tax rate of 17% (another change introduced in the Budget).
- A listed company on the South Pacific Stock Exchange (SPSE) will be subject to a lower tax rate of 18.5% (provided the company has 40% local shareholding structure). This is another significant change introduced in the Budget.
- The Government of Fiji welcomes and supports local and foreign investment, within its overall objectives of growing the various sectors of Fiji’s economy, enticing new and retaining existing investors, by providing tax and other incentives to boost business.
- There’s a developed telecommunications infrastructure that provides links through fibre optic cable connections and satellite to the rest of the world. Telecommunications is expected to improve greatly with the construction of an international submarine cable system linking Port Vila, Vanuatu, to the Fijian capital, Suva.
- Well-developed infrastructure including electricity, water supply, international airports and wharfs.
- Well-developed banking and financial institutions.
- Fast registration of foreign investment projects. Investment Fiji commits to taking 5 working days to process applications provided all relevant documents have been submitted.
Steps to setting up a business in Fiji
Prior to commencement of a business in Fiji, a foreign investor must apply for and obtain the following approvals:
- Reservation of company and business names from the Registrar of Companies
- Foreign Investment Registration Certificate from Investment Fiji
- Registration of company and business names from the Registrar of Companies
- Registration of tax and VAT from Fiji Revenue and Customs Authority
- Work permits from the Department of Immigration
- Approval for issues of shares to foreign investors from the Reserve Bank of Fiji
- Business licence to operate in the respective areas from local town and city councils
Depending on the business being undertaken, additional licenses and approvals may be required from other relevant agencies.
ANZ is a recent example of a global banking company that is taking full advantage of the fantastic opportunities available to foreign investors. ANZ is currently in the process of relocating its Pacific regional headquarters from Melbourne to Fiji.