Papua New Guinea’s enormous and largely untapped natural resources offer excellent investment opportunities.
Coupled with the Government’s positive attitude to foreign investment through the granting of incentives and concessions, and the recognition of the private sector’s important contribution to the economic growth, it is clear why many international companies have invested in Papua New Guinea.
The Government places a high priority on the development of mining and petroleum projects even though this sector is relatively well-developed. There are huge opportunities for investors to establish businesses to provide support for the growing number of such large-scale projects.
Some of the priority economic sectors offering investment projects with good potential for investors include:
- Agriculture - production and processing;
- Manufacturing; and,
- Tourism - large and small ventures.
Some of the specific projects offering good potential for investors (on a joint venture basis) include:
- Poultry farming and processing;
- Processing of spices;
- Coffee production and export;
- Seafood processing and export;
- Food production to replace imported goods;
- Timber management/production and export;
- Building materials and furniture production;
- Rubber production;
- Garment and footwear production;
The manufacture of a wide range of basic necessities (e.g. processed food, paper and wood products, metal and glass products); Printing Services; and Contractual Cleaning Services.
Information on Investment security and regulatory guideline please visit the PNG Investment Promotion Authority website www.ipa.gov.pg
Information on taxation, customs and excise can be obtained from the following websites:
Investors may wish to expand or diversify their business activities. In such cases, the terms of their certificate may be varied by lodging an application for variation on the prescribed form.
Taxation Developments & Incentive in PNG
The Government is continuing to encourage and facilitate future environment. It has embarked on awareness programs to inform stakeholders of the existing tax concessions available. These include concessions for minerals explorers, concessions for manufacturing, investment and export of certain goods manufactured in PNG, and incentives for promotion and development of tourism in PNG.
In 2007 the Government introduced a confessional taxation rate of 20% in respect of income derived by a taxpayer solely from a new or substantially improved large-scale tourism facility.
Expenditure on new buildings of the housing of industrial plant, or for the storing of raw material or finished products also qualifies for the 100% accelerated depreciation.
Export Market Development
Certain expenditure is uncured on export market development for goods manufactured in PNG or for promotion of tourism in PNG, a double deduction is allowed for those costs.
Export Incentives for Manufacturers
Taxpayer who export certain qualifying goods manufactured by them in PNG are entitled to an income tax exemption of 100% of export sales made prior to the last day of the 3rd year following the date export sales were first made.
Agriculture, Fishing & Tourism
Expenditure on new plant or articles in respect of agricultural production, commercial fishing activities, and boats and ships used solely as dive/snorkelling boats qualifies for a 100% accelerated depreciation deduction.
“If you have a trade in PNG, then you are basically guaranteed a job”.
Mining and Petroleum
While natural gas is getting most of the headlines, there is plenty of other activity in PNG’s mining and petroleum. Judging from the record attendances at the December 2008 10th PNG Mining and Petroleum Conference in Sydney, Australia, interest in PNG’s resources sector has never been stronger.
While exploration for non-precious metals has slowed, as ‘juniors’ seek to conserve their capital for the moment in the economic cycle when commodity prices start to rise again, there are several major mining projects continuing in PNG regardless of the current global situation.
Government Incentives for Mining & Petroleum
There are a number of incentives for the resource sector, including a tax rate of 30% for certain petroleum projects, dividends paid from petroleum or gas income being exempt from income tax and dividend withholding tax, and interest paid by a resource project to a non-resident lender being exempt from income tax and interest withholding tax.
A double deduction is available for certain minerals exploration expenditure and al development expenditure on a mining project can be deducted on a 25% diminishing value basis.
PNG’s mining and petroleum sector offers a wealth of opportunity for service providers to sector, including mining equipment hire, logistics, personnel recruitment and relocation services, surveying, catering and IT services.