Investment Incentives

The investment incentives currently available are designed primarily to encourage the development of industries that are considered desirable for the long-term economic development of Papua New Guinea or specific underdeveloped regions within the country and are as follows:

Loans to industry

Feasibility contribution scheme:

The government, through the Investment Promotion Authority, is prepared to assist with the preparation of feasibility studies by contributing up to half the cost of such an exercise.


Where considered appropriate, the government is sometimes prepared to provide or finance infrastructure needed for a particular project in exchange for a negotiable user charge.

Assistance to Papua New Guineans:

The government offers a number of forms of financial assistance to Papua New Guineans to assist with the establishment of small-scale business operations, primarily through the Small Business Development Division of the Department of Trade and Industry

Investment guarantees

The Investment Promotion Act contains guarantees that there will be no nationalisation or expropriation of foreign investors’ property except in accordance with law, for a public purposes defined by law or in payment of compensation as defined by law.
Tax concessions

Accelerated depreciation rates are available for new manufacturing and agricultural plant, generous deductions are available for capital expenditure on land used for primary production and accelerated deductions are available for mining and petroleum companies. For more details, refer to our Global Tax Solutions page, or contact us .

Rural development incentives

A ten-year exemption from tax is available where certain new businesses are established in specified rural development areas. Businesses, resident or non-resident, engaged in the following activities qualify for this exemption:

  • Agricultural product of any kind
  • Manufacturing of any kind
  • Construction
  • Transport, storage and communications
  • Real estate
  • Business services
  • Provision of accommodation, motels or hotels.

The following has been specified as rural development areas:

  • Central province – Goilala
  • Enga province – Kandep, Lagalp, Wabag, Wapenamunda
  • Gulf province – Kaintiba, Kikori
  • Eastern Highlands province – Henganofi, Lufa, Okapa, Wonenave
  • Southern Highlands province – Jimi, Tambal
  • Madang province – Bogia, Rai Coast, Ramu
  • Milne Bay province – Losula, Rabaraba
  • Morobe province – Finschaffen, Kabwum, Kaiapit, Menyamya, Mumeng
  • East New Britain province – Pomio
  • West New Britain province – Kandrian
  • East Sepik province – Ambuti, Angoram, Lumi, Maprik
  • West Sepik province – Amanab, Nuku, Telefomin
  • Simbu province – Gumine, Karimui.

The exemption does not apply to businesses in areas in which a special mining lease or a petroleum development license is granted.

Export incentive for manuafacturers

Business that commence exporting qualifying goods manufactured by them in Papua New Guinea are exempt from income tax on the profits derived from those sales for the first three complete years. For the following four years the profit derived from the excess of export sales over the average export sales of the three previous years is exempt from income tax. The list of qualifying goods include, amongst others, motor vehicles, matches, paint, refined petroleum, soaps, wooden furniture, dairy products, flour, chopsticks, artifacts, clothing and manufactured textiles and jewellery.

Wages subsidy

A wage subsidy is payable to new businesses that manufacture new manufactured products. The business will receive a prescribed percentage of the value of the minimum wage paid by the business, multiplied by the number of Papua New Guineans permanently employed by the business.

The relevant percentage are as follows:

  • Year 1 – 40%
  • Year 2 – 30%
  • Year 3 – 20%
  • Year 4 – 15%
  • Year 5 – 10%

Eligible products are, broadly, all products listed under division D of the International Standard Classification of All Economic Activities (Third Revision), provided the products are not subject to quota pricing without import pricing or to tariff protection.