PNG looks to enhance its foreign investment regime
This article originally appeared in the Economist Intelligence Unit, 16 January 2023.
The parliament of Papua New Guinea (PNG) has passed the Associations Incorporation Bill and amendments to the Investment Promotion Bill. With the aim of encouraging the growth of small and medium-sized enterprises (SMEs) and attracting foreign direct investment (FDI), the two acts represent a general enhancement of the local business regulatory environment.
Why does it matter?
Changes to the investment promotion laws aim to build local-foreign partnerships, with the intention of encouraging local participation in more complex and capital-intensive businesses. The amendments include an expansion of the reserved activities list (RAL), which lists businesses reserved only for locals, to include trade stores. The original RAL contained small agriculture and clothing businesses.
For existing businesses that fall under the new RAL, the revised act includes a grandfathering clause that will exempt foreign owners from charges and will allow a three-year transition period, during which the business will be shut down or sold.
Read more at the Economist Intelligence Unit.