Investment Policy Statement
As part of Government's outward-looking growth policy an Investment Policy Statement (IPS) has been drafted by the Ministry of Commerce, Industry, Trade and Public Enterprise. The IPS clearly identifies Government's new direction in terms of investment policy principles, these are:
1. To encourage increased investment in all areas of the economy from all sources.
2. Investment should be market-driven as opposed to Government-directed, and any encouragement should be through facilitation rather than regulation.
3. Where regulations are necessary for legal safeguards or social reasons, they should be administered in the most transparent method possible.
The IPS covers a wide range of areas of interest to investors, including: investment promotion and facilitation, investment incentives, guarantees to investors, the investment approval process, and Government's infrastructure development policy. The next step in this process which has already begun, is to document rules for:
* employment of foreign personnel,
* investment incentives and income tax concessions,
* export incentives (VAT refund), and import duty concessions and
* protection of domestically produced goods and services,
* application process for approval of projects and award of concessions.
When completed, these rules will be available for all investors from the Fiji Trade and Investment Board (their address is given on the sheet listing Key Sector Contacts).
Treatment Of Foreign Investors
Foreign inputs are expected to play a major role in Fiji's growth, and for this reason the Government is determined to improve the investment climate in Fiji for foreign investors, as well as for local entrepreneurs. In principle, the Government will encourage any project found suitable for location in Fiji, provided it satisfies certain broad criteria, namely that the investment will; contribute to Fiji's economic and social development; broaden Fiji's economic base; provide opportunities for significant local equity participation, particularly in projects that involve the utilisation of the country's natural resources, possibly through joint ventures; generate increased exports; provide training and employment opportunities for local people; involve maximum processing of products in Fiji; and involve the enterprise in the provision of maximum common-use facilities, such as labour and roads.
Specific requirements for foreign investors are: introduce adequate funds for proposed projects, with a debt to equity ratio of no greater than 3:1; pay a fair price for assets acquired locally; obtain approval to remit dividends and profits from the Reserve Bank of Fiji for tax clearance and statistical purposes; obtain Exchange Control approval from the Reserve Bank of Fiji for any investment in Fiji securities; obtain work permits for expatriates and, wherever possible, train local employees to fill their positions. While there is no restriction on foreign investors acquiring a controlling interest in locally owned existing businesses, there is a limited list of areas restricted to local investors only, although this is being revised with a view to reduce restrictions. This list is currently under review. Essentially, the restrictions/conditions for investment are designed to ensure that only those investments which are economically and developmentally desirable for Fiji proceed.
Investment in the Mineral Sector
Government believes that overseas investors are most attracted to those countries with an open exploration administration system where the rights of investors to develop their discoveries (or continue with promising exploration prospects) are clear. In Fiji the investor's right to continue exploration/development programs is written in the Mining Act.
The guiding principle of Fiji's mineral investment policy is that Government assumes that the grant of an exploration licence implies a right to proceed to eventual project development; this is subject to the licence holder maintaining a vigorous geological and/or feasibility study program approved by the Minister responsible for Mineral Resources.
Investors Rights and Guarantees
The Government of Fiji is aware of the risks that mineral exploration and development companies take, and sees a role for itself in creating an investment climate in Fiji which offers investors security. The 1990 Constitution of Fiji provides a first stage guarantee for investors, in Section 9 against the compulsory acquisition of property (including mining tenements) except (and only with an order authorised by the Supreme Court) in certain specified condition spelt out in the Constitution.
In addition, Fiji is a signatory of the Multilateral Investment Guarantee Agency (MIGA). MIGA is an independent agency of the World Bank mandated to help facilitate increased flows of foreign direct investment to developing countries. Its core area of business is providing political risk insurance to foreign investors; available risk coverage includes war and civil disturbance, currency transfer/inconvertibility, expropriation and breach of contract. Plus Fiji is a member of the International Chamber of Commerce, and the International Centre for Settlement of Investment Disputes.