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This blog is brought to you by Gilbert & Samuels Company Limited, a financial advisory services and consulting company based in Suva, Fiji.
To contact the authors of this blog, please call telephones (679) 3342719, (679) 3544897 or e-mail info@gilbert.com.fj.


Monday, February 23, 2009

Changes to Foreign Investment Regulation 2008

The Fiji Trades and Investment Board had a Road Show on Monday, 16 February 2009 at the Southern Cross Hotel, Suva. The aim of this Road Show was to announce the current changes to the Foreign Investment Regulations 2008. As of Friday, 16 January 2009, FTIB had de-reserved 4 activities that were previously listed as reserved activities and reduced the minimum investment thresholds for certain restricted activities.
The 4 de-reserved activities are:

  • Bus Business
  • Sightseeing tours, travel agent and tourist guide services
  • An office service business
  • Forestry (plant management & logging)

These 4 de-reserved activities now come under ‘Other Activities’ in the Restricted List of the Fiji Investment Regulation 2009 and will require at least F$250,000.00 in owners contribution or paid up capital for companies in the form of cash from the operational date to be fully brought into Fiji within the implementation period of the business.

2009 Restricted List and the Minimum Investment Thresholds

Fishing
· At least 30% equity held by a local and the Foreign investor must have at least F$500,000.00 in owner’s contribution or paid up capital for companies in the form of cash from the operational date to be fully brought into Fiji within the implementation period

Forestry (Plant management & logging)
· A foreign investor must undertake value adding and must have at least F$500,000.00 in owner’s contribution or paid up capital for companies in the form of cash from the operational date to be fully brought into Fiji within the implementation period

Manufacturing
· Tobacco production
o A foreign investor must use at least 75% locally grown and processed tobacco in all domestic cigarette production and must have at least F$500,000.00 in owner’s contribution or paid up capital for companies in the form of cash from the operational date to be fully brought into Fiji within the implementation period

Tourism
· Cultural heritage
o Any activity involving investment in the cultural heritage of the Fiji Islands must have at least F$500,000.00 in owner’s contribution or paid up capital for companies in the form of cash from the operational date to be fully brought into Fiji within the implementation period

Service
· Real Estate Management
o A foreign investor engaging in real estate management and real estate agents must have at least F$1 million in owner’s contribution or paid up capital for companies in the form of cash from the operational date to be fully brought into Fiji within the implementation period
o A foreign investor engaging in the above real estate management activities needs to be certified under the Real Estate Agents Act
o A foreign investor engaging in real estate activity in renting out of homes/villas/ apartment/bures to tourists must have at least F$250,000.00 in owners contribution or paid up capital for companies in the form of cash from the operational date to be fully brought into Fiji within the implementation period.

· Real Estate Development
o A foreign investor engaging in real estate development must have at least F$5 million owner’s contribution or paid up capital for companies in the form of cash from the operational date to be fully brought into Fiji within the implementation period

· Construction
o A foreign investor engaging in the construction industry must have at least F$1 million in owner’s contribution or paid up capital in the form of cash from the operational date to be fully brought into Fiji within the implementation period


· Earthmoving Business
o A foreign investor engaging in earthmoving business must have at least F$1 million in owner’s contribution or paid up capital for companies in the form of cash from the operational date to be fully brought into Fiji within the implementation period


· Island-Island Shipping and Passenger-Service (exclusive of tourism support services)
o A foreign investor engaging in inter island shipping and passenger service must have at least F$500,000.00 in owner’s contribution or paid up capital for companies in the form of cash from the operational date to be fully brought into Fiji within the implementation period.

Other Activities
Other than those activities listed under the Reserved and Restricted List, all other activities requires at least F$250,000.00 in owner’s contribution or paid up capital for companies in the form of cash from the operational date, to be fully brought into Fiji within the implementation period of the business.

The definition of ‘Reserved Activities’ under the 2009 Foreign Investment Regulations refers to those activities that are prescribed for Fiji Citizens only. For the purpose of Section 5 of the Act, the following Activities are prescribed:

  • A milk bar or cafeteria business;
  • A taxi business;
  • A kava business;
  • Retail sale via stalls and markets;
  • A handicraft business;
  • Tailor shops;
  • Repair of personal and household goods;
  • A plumbing business;
  • An electrical business;
  • Plant nursery and care;
  • A day care centre;
  • An internet café and amusement and gaming centres;
  • Home-stay lodging services;
  • A bakery business other than those operated within the vicinity of a hotel/resort and/or operated by foreign owned hotels/resorts;
  • Backpacker operations;
  • A nightclub, other than those operated within the vicinity of a hotel/resort and/or operated by foreign owned hotels/resorts; and
  • A liquor bar, other than those operated within the vicinity of a hotel/resort and/or operated by foreign owned hotels/resorts.

The definition of ‘Restricted Activities’ under the 2009 Foreign Investment Regulations refers to those activities with conditions which must be met by foreign investors who wish to pursue them. These conditions include a minimum owner’s contribution or paid up capital in the form of cash to be brought into Fiji within the implementation period plus specific requirements depending on the activity of the foreign investor.

For Instance:

  1. Fishing Activity – At least 30% equity held by a local and the foreign investor must have at least F$500,000.00 in owner’s contribution or paid up capital for companies in the form of cash from the operational date to be fully brought into Fiji within the implementation period
  2. Forestry (Plant management & logging) - A foreign investor must undertake value adding and must have at least F$500,000.00 in owner’s contribution or paid up capital for companies in the form of cash from the operational date to be fully brought into Fiji within the implementation period
  3. Manufacturing (Tobacco production) - A foreign investor must use at least 75% locally grown and processed tobacco in all domestic cigarette production and must have at least F$500,000.00 in owner’s contribution or paid up capital for companies in the form of cash from the operational date to be fully brought into Fiji within the implementation period
  4. Tourism (Cultural heritage) - Any activity involving investment in the cultural heritage of the Fiji Islands must have at least F$500,000.00 in owner’s contribution or paid up capital for companies in the form of cash from the operational date to be fully brought into Fiji within the implementation period
  5. Service
    · Real Estate Management -
    o A foreign investor engaging in real estate management and real estate agents must have at least F$1 million in owner’s contribution or paid up capital for companies in the form of cash from the operational date to be fully brought into Fiji within the implementation period
    o A foreign investor engaging in the above real estate management activities needs to be certified under the Real Estate Agents Act
    o A foreign investor engaging in real estate activity in renting out of homes/villas/ apartment/bures to tourists must have at least F$250,000.00 in owners contribution or paid up capital for companies in the form of cash from the operational date to be fully brought into Fiji within the implementation period.

    · Real Estate Development
    o A foreign investor engaging in real estate development must have at least F$5 million owner’s contribution or paid up capital for companies in the form of cash from the operational date to be fully brought into Fiji within the implementation period

    · Construction
    o A foreign investor engaging in the construction industry must have at least F$1 million in owner’s contribution or paid up capital in the form of cash from the operational date to be fully brought into Fiji within the implementation period


    · Earthmoving Business
    o A foreign investor engaging in earthmoving business must have at least F$1 million in owner’s contribution or paid up capital for companies in the form of cash from the operational date to be fully brought into Fiji within the implementation period


    · Island-Island Shipping and Passenger-Service (exclusive of tourism support services)
    o A foreign investor engaging in inter island shipping and passenger service must have at least F$500,000.00 in owner’s contribution or paid up capital for companies in the form of cash from the operational date to be fully brought into Fiji within the implementation period.
  6. Other Activities - other than those activities listed under the Reserved and Restricted List, all other activities requires at least F$250,000.00 in owner’s contribution or paid up capital for companies in the form of cash from the operational date, to be fully brought into Fiji within the implementation period of the business.

Note : For investment advice and assistance to set up business in Fiji, pls contact our company, Gilbert & Samuels Company Limited, on telephones (679) 3342719 or 3544897 or email info@gilbert.com.fj.

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