The PNG economy is currently stronger than it has ever been since Independence, with a stable currency, record levels of foreign exchange reserves, inflation hovering @ 3% and base lending rates @ 6%. This reflects the policy of fiscal discipline adopted by the current government. There are currently more than 40 new exploration wells and new mines commissioned (or about to be) at Kainantu, Simberi, Wau and near Madang in the Ramu Valley.
The PNG Gas Pipeline is expected towards the end of 2006. This will likely be the platform for sustained and significant economic growth for PNG during the next 10 years.
The Government of Papua New Guinea offers a number of attractive investment incentives to promote the development of new industries.
Restrictions on foreign investment
- Exchange control and IPA (Investment Promotion Authority) approval is required for all foreign investment proposals.
- Foreign enterprises must apply for registration to be allowed to undertake activities in Papua New Guinea. Registration is not automatic and certain restrictions on foreign ownership apply.
The Bank of Papua New Guinea, the Central Bank, is the exchange control authority. Exchange controls are in place in respect of inward investments, registration of foreign capital, foreign currency and repatriation of capital and earnings.
Implementation of government policy in relation to import administration is mainly by the use of tariffs. Apart from normal Import restrictions on drugs, quarantine items etc., most commodities may be imported. Import restrictions are sometimes used to protect local production of certain goods.
Business operations in Papua New Guinea may be conducted in a number of forms, such as private companies, public companies, branches of foreign companies, partnerships, joint ventures and sole traders. The Companies Act of 1997 and Companies Regulation (1998) regulates all matters regarding private and public companies. All foreign business entities must have approval from the IPA before commencing operations in Papua New Guinea.
Our Enterprise Solutions group can help you to set up your business in PNG.
The Port Moresby stock exchange (POMSoX) is the official stock exchange of Papua New Guinea. Capitalisation of companies listed on POMSoX now exceeds K18 billion.
The Papua New Guinean attitude towards land is very different from that of the Western world. Land is not regarded as a commodity that can be bought and sold by individuals – it is a permanent and integral part of a village community. The present "owners" of the land have usage rights only and therefore hold their land in custody for their ancestors and descendants. They can hand over personal usage rights but they can seldom sell the land itself. This often gives rise to complex landowner-issues and negotiations pertaining to the use of land.