INVESTMENT CONSIDERATIONS

GOVERNMENT POLICY

The Government of Kiribati aims to improve on the growth performance of the country by encouraging private sector investment, diversification of the economy and instituting appropriate policies and measures.

Foreign investment is generally encouraged and no discrimination is shown between foreign and local investors. Foreign investors who wish to establish an enterprise must make application to the Foreign Investment Commission (FIC) that is chaired by the Permanent Secretary for Commerce, Industry and Tourism. Government Ministries, which are mostly concerned with foreign investment issues, are represented on the FIC.

Granting of FIC licenses is on a case-by-case basis. All proposals put to the Commission are considered under the following guidelines:

1. The potential employment ofI-Kiribati (the indigenous population);
2. Net export contribution;
3. The balance between local resource exploitation and the size of the foreign investment
4. The potential for transferring to I-Kiribati foreign managerial and technical skills required in the enterprise;
5. The extent of competition with local enterprises; and
6. The impact on social and natural environments.

RESTRICTIONS ON FOREIGN INVESTMENT

An investor may enter into a business as a full foreign investment or as a joint venture investment with a local partner or the government There are restrictions with land ownership as else where in the Pacific.

The Government of Kiribati imposes restrictions on Foreign Investment only where local expertise or local industry already exists (for example, handicraft) or where the local, natural or social environment could be adversely affected.

1. Local industries: piggery farming, poultry farming, millionaire salad exportation, domestic inter island shipping, wholesaling
2. Scarce endangered species: coconut crab harvesting, turtle hunting, giant clam harvesting bone fishing, berried female lobster harvesting

1. Fisheries sector: drifter fishing, dynamite fishing, chemical fishing, conservation areas coral exportation
2. Agricultural sector: logging coconut b.earing trees, wildlife conserved bird species

TRANSFER OF CAPITAL AND PROFITS

There is no foreign exchange control in Kiribati nor is there a central monetary authority. However, the Bank of Kiribati monitors foreign reserves and domestic currency requirements.

TAXATION

Individuals
Personal income tax is at progressive rates and is applied to chargeable income (taxable income less allowable expenses) at the following rates (using exchange rate of 1.6071):

INVESTMENT PROTECTION

The government of Kiribati is currently considering joining the Multilateral Investment Guarantee Agency (MIGA) and the International Centre for the Settlement of Investment Dispute (ICSID).

Investors securing their rights to own and operate their business in Kiribati are able to obtain Government guarantees to repatriate after-tax profits, original capital, loan and interest repayments, know-how fees and other service charges.

INVESTMENT INCENTIVES

A range of incentives is offered to those wishing to invest in Kiribati. These incentives are not automatic but available on a case-by case basis. It is up to the investor to initiate any request for such assistance. The FIC does facilitate requests from interested foreign investors for these incentives (provided their investment proposals have been approved by the FIC itself or Cabinet, as the case may be).

CONTACTS FOR FURTHER INFORMATION