Policies toward Foreign Direct Investment

Mongolia generally does not discriminate against foreign investors in general or U.S. investors in particular; however, there are two major exceptions.  First, foreign investors object to the regulatory requirement, nowhere mentioned in the Investment Law, that they invest a minimum of USD100,000 to establish a venture when the Investment Law of Mongolia states that all investors in Mongolia, without reference to nationality, are subject to national treatment.  In contrast, Mongolian investors face no investment minimums. Second, foreign nationals and companies may not own real estate; only Mongolian adult citizens can own real estate. Additionally, while foreign investors may obtain use rights (excluding mining exploration and extraction licenses) for the underlying real estate, these rights last for five years with a one-time five-year renewal.  The government imposes no such restriction on its nationals.  There are also substantial regulations on foreign entities entering Mongolia’s financial service sector.

Limits on Foreign Control and Right to Private Ownership and Establishment

Mongolia’s constitution and related statutes limit the right to own real estate to adult citizens of Mongolia.  However, no formal law exists vesting Mongolia’s pastoral nomadic herders with exclusive rights of pasturage, control of water, or real estate rights.  As such, rural municipalities unofficially recognize that traditional, customary access to these resources by pastoralists must be taken into account before, during, and after other non-resident users, particularly but not exclusively those in the mining sector, can exercise use and ownership rights.  Both foreign and domestic investors have the same rights to establish, sell, transfer, or securitize structures, shares, use rights, companies, and movable property, subject to relevant legislation and related regulations controlling such activities in all sectors. Mongolia generally imposes no statutory or regulatory limits on foreign ownership and control of investments.  The only exception is that the Mining Law of Mongolia allows the Mongolian Government to acquire up to 50 percent of mineral deposits deemed of strategic value to the state by parliament. Investors assert that regulatory discretion allows bureaucrats to exercise de facto control over use of legally granted rights, corporate governance decisions, and ownership stakes.  Finally, Mongolia has no formal or informal investment screening mechanism.

Other Investment Policy Reviews

The Mongolian Government conducted an investment policy review through the United Nations Conference on Trade and Development (UNCTAD) in 2013 and a trade policy review with the World Trade Organization (WTO) in 2014.  Although the Organization for Economic Cooperation and Development (OECD) has not conducted a comprehensive investment policy review of Mongolia, it has completed economic studies on specific aspects of investment and development in Mongolia.

For the UNCTAD Mongolia investment policy review: http://unctad.org/en/pages/PublicationWebflyer.aspx?publicationid=758  .

For the WTO Mongolia investment policy review in the context of a Trade Policy Review: https://www.wto.org/english/tratop_e/tpr_e/tp397_e.htm  .   

For OECD Mongolia reports:  http://www.oecd.org/countries/mongolia  .

Business Facilitation

Consistent with the World Bank’s Doing Business Report, investors report that Mongolia’s business registration process is reasonably efficient and clear.  All enterprises, foreign and domestic, must register with the State Registration Office (SRO: www.burtgel.gov.mn).  Registrants obtain form UB 03-II and other required documents from the website and can submit completed documents by email.  SRO aims at a two-day turnaround for the review and approval process. However, investors report bureaucratic discretion can add weeks or even months to the process and argue more transparent adherence to the relevant laws and regulations would stabilize and streamline registration.  Once approved by SRO, a company must register with the Mongolian General Taxation Authority (GTA: http://en.mta.mn/  ).  Upon hiring its first employees, a company must register with the Social Insurance Agency (https://zasag.mn/en/m/social-insurance/contact  ).  The General Authority for Intellectual Property and State Registration (GAIPSR) reports that notarization is not required for its registration process.

The same ease of opening a business does not apply to closing a business, however.  Foreign investors generally complain about the long delays in the latter process.

Outward Investment

Although the Mongolian Government neither promotes nor incentivizes outward investment, it does not restrict domestic investors from investing abroad.

Policies towards Foreign Direct Investment

Montenegro regained its independence in 2006, and, since then, the country has adopted an investment framework that in principle encourages growth, employment, and exports.  Montenegro, however, is still in the process of establishing a liberal business climate that fosters foreign investment and local production. The country remains dependent on imports from neighboring countries despite its significant potential in some areas of agriculture and food production.  Although the continuing political transition has not yet eliminated all structural barriers, the government generally recognizes the need to remove impediments in order to remain competitive, reform the business environment, open the economy to foreign investors, and attract further foreign direct investment (FDI). 

In general, there are no distinctions made between domestic and foreign-owned companies.  Foreign companies can own 100 percent of a domestic company, and profits and dividends can be repatriated without limitations or restrictions.

Foreign investors can participate in local privatization processes and can own land in Montenegro generally on the same terms as locals.  Expropriation of property can only occur for a “compelling public purpose” and compensation must be made at fair market value. There has been no known expropriation of foreign investments in Montenegro.  International arbitration is allowed in commercial disputes involving foreign investors.

Registration procedures have been simplified to such an extent that it is possible to complete all registration processes online.  In addition, bankruptcy laws have been streamlined to make it easier to liquidate a company; accounting standards have been brought up to international norms; and customs regulations have been simplified.  There are no mandated performance requirements.

Montenegro has enacted specific legislation outlining guarantees and safeguards for foreign investors.  Montenegro has also adopted more than 20 other business-related laws, all in accordance with EU standards.  The main laws that regulate foreign investment in Montenegro are: the Foreign Investment Law; the Enterprise Law; the Insolvency Law; the Law on Fiduciary Transfer of Property Rights; the Accounting Law; the Law on Capital and Current Transactions; the Foreign Trade Law; the Customs Law; the Law on Free Zones; the Labor Law (which is currently undergoing amendment to make personnel decisions more efficient); the Securities Law; the Concession Law, and the set of laws regulating tax policy.  Montenegro has taken significant steps in both amending investment-related legislation in accordance with global standards and creating necessary institutions for attracting investments. However, as is the case with other transition countries, implementation and enforcement of existing legislation remains weak and inconsistent. 

To better promote investment and foster economic development, the government established the Montenegrin Investment Promotion Agency (MIPA) in mid-2005.  It seeks to promote Montenegro as a competitive investment destination by actively facilitating investment projects in the country.

Inquiries on investment opportunities in Montenegro can be directed to:

Milos Jovanovic, Director

Montenegrin Investment Promotion Agency (MIPA)

Jovana Tomasevica 2

81000 Podgorica, Montenegro

Tel/fax: (+382 20) 203 140, 203 141, 202 910

Website: http://www.mipa.co.me  

E-mail: info@mipa.co.me

Both the Privatization and Capital Project Council and the Secretariat for Development Projects promote investment opportunities in the Montenegrin economy, primarily in the tourism, energy, technology, and agricultural sectors.  These institutions maintain an ongoing dialogue with investors already present in Montenegro in order to support their activities. At the same time, they seek to promote future projects and attract new investors to do business in Montenegro.  

Limits on Foreign Control and Right to Private Ownership and Establishment

Montenegro’s Foreign Investment Law, which was adopted by the Parliament in 2011, establishes the framework for investment in Montenegro.  The law eliminates previous investment restrictions, extends national treatment to foreign investors, allows for the transfer and repatriation of profits and dividends, provides guarantees against expropriation, and allows for customs duty waivers for equipment imported as capital-in-kind.

There are limits on neither foreign control or right to private ownership nor in establishing companies in Montenegro.  There are no institutional barriers against foreign investors, including U.S. businesses, and there is no screening mechanism for inbound foreign investment.  

Other Investment Policy Reviews

In the past three years, the government has not undergone any third-party investment-policy reviews through a multilateral organization.

Business Facilitation

The Central Register of the Commercial Court (CRPS) is responsible for business registration procedures (www.crps.me  ).  The court maintains an electronic database of registered business entities, and contracts on financial leasing and pledges.  The process to register a business in Montenegro takes an average of 4-5 working days. The minimum financial requirement for a Limited Liability Company (LLC) is just EUR 1 (USD 1.2), and three documents are required: a founding decision, bylaws, and a copy of the passport (if an individual is founding a company) or a registration form for the specific type of company.  Samples of all documents are available for download at the CRPS website.

Montenegrin law permits the establishment of six types of companies: entrepreneur, limited liability company, joint stock company, general partnership, limited partnership, and part of a foreign company. Details regarding the definitions and requirements for each type of company are as follows:

Entrepreneur: If an entrepreneur wants to conduct business under a different name it is necessary to register a company in the CRPS and he/she needs to present:

• Personal identification card

• Completed registration form
• Registration fee of EUR 10 (USD 12.30)
• Administrative fee of EUR 12 (USD 14.80) for announcement in the Official Gazette
• Note: There is no minimum capital requirement

Limited liability company

• For companies of 1-30 members

• Founding Act (The Foundation Agreement)

• Contract of decision of the company’s foundation (The Charter)

• Minimum capital requirement of EUR 1 (USD 1.23)
• Registration fee of EUR 10 (USD 12.30)
• Administrative fee of EUR 12 (USD 14.80) for announcement in the Official Gazette

Joint stock company

• Founding Act (The Foundation Agreement)

• Contract of decision of the company’s foundation (The Charter)

• List of names of all board members and managers

• Decision of the Securities Commission approving the prospectus for the public offering of shares

• Minimum capital requirement of EUR 25,000 (USD 30,840)

• Completed registration form

• Registration fee of EUR 50 (USD 61.70)
• Administrative fee of EUR 12 (USD 14.80) for announcement in the Official Gazette

General partnership

• For companies with two or more members

• Completed registration form

• Registration fee of EUR 10 (USD 12.30)
• Note: There is no minimum equity requirement

Limited partnership

• For companies with two or more members

• Completed registration form

• Registration fee of EUR 10 (USD 12.30)
• Note: There is no minimum equity requirement

Part of a foreign company (foreign company branch)

• An authenticated copy of the charter of the foreign company and a translation of the charter in the Montenegrin language duly certified as a true and correct translation

• Registration certificate from the home country and relevant financial reports

• Completed registration form

• Registration fee of EUR 10 (USD 12.30)
• Note: There is no minimum equity requirement

After fulfilling all these requirements, it is necessary to open a bank account.  Once a bank account is established, the company reports to the tax authority in order to receive a PIB (taxation identification number) and VAT number (Value Added Tax).

For classification of companies by size, based on number of employees, the government’s definition is as follows: (i) small enterprises (from one to 49 employees), (ii) medium-sized enterprises (from 50 to 249) and (iii) large enterprises (more than 250 employees).

Outward Investment

While the Montenegrin government is very active in attracting and inviting foreign investors to do business in Montenegro, the government is not as dedicated to promoting outward investments.

There are no government restrictions to domestic investors for their investments abroad.

Policies towards Foreign Direct Investment

Morocco actively encourages foreign investment through macro-economic policies, trade liberalization, structural reforms, infrastructure improvements, and incentives for investors.  Law 18-95 of October 1995, constituting the Investment Charter, which can be found online at http://www.usa-morocco.org/Charte.htm  , is the principal Moroccan text governing investment and applies to both domestic and foreign investment (direct and portfolio).  Morocco’s 2014 Industrial Acceleration Plan, a new approach to industrial development based on establishing “ecosystems” that integrate value chains and supplier relationships between large companies and small and medium-sized enterprises (SMEs;), has guided Ministry of Industry policy for the last five years.  The plan runs through 2020. Morocco’s Investment and Export Development Agency (AMDIE) is the primary agency responsible for the development and promotion of investments and exports. The Agency’s website aggregates relevant information for interested investors and includes investment maps, procedures for creating a business, production costs, applicable laws and regulations, and general business climate information, among other investment services.  Further information about Morocco’s investment laws and procedures is available on AMDIE’s website at http://www.amdie.gov.ma/en/  .  For further information on agricultural investments, visit the Agricultural Development Agency (ADA) website (http://www.ada.gov.ma/)   or the National Agency for the Development of Aquaculture (ANDA) website (https://www.anda.gov.ma/  ).

Moroccan legislation governing FDI applies equally to Moroccan and foreign legal entities, with the exception of certain protected sectors.

When Morocco acceded to the OECD Declaration on International Investment and Multinational Enterprises in November 2009, Morocco guaranteed national treatment of foreign investors (i.e., according equal treatment for both foreign and national investors in like circumstances).  The only exception to this national treatment of foreign investors is in those sectors closed to foreign investment (noted below), which Morocco delineated upon accession to the Declaration. Per a Moroccan notice published in 2014, the lead agency on adherence to the Declaration is AMDIE.

Limits on Foreign Control and Right to Private Ownership and Establishment

Foreign and domestic private entities may establish and own business enterprises, barring some sector restrictions.  While the U.S. Mission is not aware of any economy-wide limits on foreign ownership, Morocco places a 49 percent cap on foreign investment in air and maritime transport companies and maritime fisheries.  Morocco prohibits foreigners from owning agricultural land, though they can lease it for up to 99 years. The Moroccan government holds a monopoly on phosphate extraction through the 95 percent state-owned Office Cherifien des Phosphates (OCP).  The Moroccan state also has a discretionary right to limit all foreign majority stakes in the capital of large national banks, but does not appear to have ever exercised that right. In the oil and gas sector, the National Agency for Hydrocarbons and Mines (ONHYM) retains a compulsory share of 25 percent of any exploration license or development permit.  The Moroccan Central Bank (Bank Al-Maghrib) may use regulatory discretion in issuing authorizations for the establishment of domestic and foreign-owned banks. As set forth in the 1995 Investment Charter, there is no requirement for prior approval of FDI, and formalities related to investing in Morocco do not pose a meaningful barrier to investment. The U.S. Mission is not aware of instances in which the Moroccan government turned away foreign investors for national security, economic, or other national policy reasons.  The U.S. Mission is not aware of any U.S. investors disadvantaged or singled out by ownership or control mechanisms, sector restrictions, or investment screening mechanisms, relative to other foreign investors.

Other Investment Policy Reviews

The World Trade Organization (WTO) 2016 Trade Policy Review (TPR) of Morocco found that the trade reforms implemented since the last TPR in 2009 have contributed to the economy’s continued growth by stimulating competition in domestic markets, encouraging innovation, creating new jobs, and contributing to growth diversification. The WTO 2016 TPR can be found at https://www.wto.org/english/tratop_e/tpr_e/tp429_e.htm   .  The U.S. Mission is not aware of any other investment policy reviews in the past three years.

Business Facilitation

In the World Bank’s 2019 Doing Business Report (http://www.doingbusiness.org/en/data/exploreeconomies/morocco   ), Morocco ranks 60 out of 190 economies worldwide in terms of ease of doing business, rising nine places since the 2018 report.  Since 2012, Morocco has implemented a number of reforms facilitating business registration, such as eliminating the need to file a declaration of business incorporation with the Ministry of Labor, reducing company registration fees, and eliminating minimum capital requirements for limited liability companies.  Morocco maintains a business registration website that is accessible through the various Regional Investment Centers (CRI – Centre Regional d’Investissement at https://rabat.eregulations.org/procedure/4/7?l=fr).  The business registration process is generally streamlined and clear.

Foreign companies may utilize the online business registration mechanism.  Foreign companies, with the exception of French companies, are required to provide an apostilled Arabic translated copy of its articles of association and an extract of the registry of commerce in its country of origin.  Moreover, foreign companies must report the incorporation of the subsidiary a posteriori to the Foreign Exchange Board (Office National de Change) to facilitate repatriation of funds abroad such as profits and dividends. According to the World Bank, the process of registering a business in Morocco takes an average of nine days (significantly less time than the Middle East and North Africa regional average of 21 days).  Including all official fees and fees for legal and professional services, registration costs 3.7 percent of Morocco’s annual per capita income (significantly less than the region’s average of 22.6 percent). Moreover, Morocco does not require that the business owner deposit any paid-in minimum capital.

On December 11, 2018, the lower house of parliament adopted draft law 88-17 on the electronic creation of businesses.  The final implementation decrees are expected to be ready by mid-2019.  The new system will allow the creation of businesses online via an electronic platform managed by the Moroccan Office of Industrial and Commercial Property (OMPIC). Once launched, all procedures related to the creation, registration, and publication of company data will be required to be carried out via this platform.  The creator of the company will be exempt from filing physical documents. A separate decree will determine the list of documents required during the electronic business creation process. A new national commission will monitor the implementation of the new procedures.

The business facilitation mechanisms provide for equitable treatment of women and underrepresented minorities in the economy.  Notably, according to the World Bank, the length of time and cost to register a new business is equal for men and women in Morocco.  The U.S. Mission is not aware of any special assistance provided to women and underrepresented minorities through the business registration mechanisms.  In cooperation with the Moroccan government, civil society, and the private sector, there have been a number of initiatives aimed at improving gender quality in the workplace and access to the workplace for foreign migrants, particularly from sub-Saharan Africa.

Outward Investment

In 2017, Morocco’s FDI in Africa was USD 2.57 billion, representing a 12 percent increase over 2016.  The African Development Bank ranks Morocco as the second biggest African investor in Sub-Saharan Africa, after South Africa, with up to 85 percent of Moroccan FDI going to the region.  The U.S. Mission is not aware of a standalone outward investment promotion agency, though AMDIE’s mission includes supporting Moroccan exporters and investors seeking to invest outside of Morocco. Nor is the U.S. Mission aware of any restrictions for domestic investors attempting to invest abroad.   However, under the Moroccan investment code, repatriation of funds is limited to convertible Moroccan Dirham accounts. Capital controls limit the ability of residents to convert dirham balances into foreign currency or to move funds offshore.

Policies Towards Foreign Direct Investment

The GRM is open to foreign investment, seeing it as a driver of economic growth and job creation.  All business sectors are open to foreign investors, with the exception of a few sectors related to national security.  The GRM reviews and approves each foreign and domestic investment; there are almost no restrictions on the form or extent of foreign investment.

APIEX (Agencia para a Promocao de Investimentos e Exportacoes –Agency for Promotion of Investments and Exports) is the primary investor contact within the GRM, operating under the Ministry of Industry and Commerce.  Its objective is to promote and facilitate private and public investment. It also oversees the promotion of national exports.  It can assist with administrative, financial, and property issues.  Through APIEX, investors can receive exemptions from some customs and value-added tax (VAT) duties when importing “class K” equipment, which includes capital investments.

Contact information for APIEX is:

Agency for Promotion of Investments and Exports

Rua da Imprensa, 332 (ground floor)

Tel: (+258) 21313310

Ahmed Sekou Toure Ave., 2539

Tel: (+258) 21 321291/2/3

Mobile: (+258 ) 823056432

Mozambique’s Law on Investment, No. 3/93, passed in 1993, and its related regulations, govern national and foreign investment.  In August 2009, Decree No. 43/2009 replaced earlier amendments from 1993 and 1995, providing new regulations to the Investment Law.  In general, large investors receive more support from the government in the business registration process than small and medium-sized investors do.  Government authorities must approve all foreign and domestic investment requiring guarantees and incentives.  Regulations for the Code of Fiscal Benefits were established by Decree No. 56/2009 and approved in October 2009. The Code of Fiscal Benefits, Law No. 4/2009, passed in January 2009, can be found at: http://investmentpolicyhub.unctad.org/InvestmentLaws/laws/110 .

The GRM, through the Confederation of Business Associations (Portuguese acronym – CTA), Mozambique’s primary business and industry association, maintains an ongoing dialogue with the private sector, holding quarterly meetings with the Prime Minister and an annual meeting with the President.  CTA provides feedback to the GRM on laws and regulations that impact the business environment.

Limits on Foreign Control and Right to Private Ownership and Establishment

Mozambique investment law and its regulations generally do not distinguish between investor origin or limit foreign ownership or control of companies.  With the exception of security, safety, media, entertainment, and certain game hunting concessions, there were no legal requirements that Mozambican citizens own shares of foreign investments until 2011.

Law No. 15/2011, passed in August 2011 and often referred to as the “Mega-Projects Law,” governs public-private partnerships, large-scale ventures, and business concessions.  It states that Mozambican persons should participate in the share capital of all such undertakings in a percentage ranging from 5 percent to 20 percent of the equity capital of the project company.  Implementing regulations were approved by the Council of Ministers in June 2012.

Article 4.1 in Law 14/2014, often referred to as The Petroleum Law, states that the GRM regulates the exploration, research, production, transportation, trade, refinery, and transformation of liquid hydrocarbons and their by-products, including petrochemical activities.  Article 4.6 established state-owned oil company ENH as the government’s exclusive representative for investment and participation in oil and gas projects.  ENH typically owns up to 15 percent of shares in oil and gas projects in the country.

Other Investment Policy Reviews

Mozambique has undergone investment policy reviews by the following international organizations:

OECD Investment Policy Review (2013)

http://www.oecd.org/daf/inv/investment-policy/mozambique-investment-policy.htm 

WTO Trade Policy review – Report by the Secretariat – Mozambique – Revision (2017)

https://www.wto.org/english/tratop_e/tpr_e/tp454_e.htm 

UNCTAD Investment Policy Review (2012)

http://unctad.org/en/pages/PublicationWebflyer.aspx?publicationid=222 

Business Facilitation

APIEX is the government entity that promotes and facilitates investment in Mozambique.  It provides support to investors for the following services: incorporation, business licensing, entrance visas, work permits, residence permits, identification and licensing of land, identification of business partners, troubleshooting, project monitoring, and implementation follow-up.

Lengthy registration procedures can be problematic for any investor – national or foreign – but those unfamiliar with Mozambique and the Portuguese language face greater challenges.  Some foreign investors find it beneficial to work with a local equity partner familiar with the bureaucracy at the national, provincial, and district levels.

In 2019, Mozambique ranked 135 among 190 countries in the World Bank Doing Business report.  The report states that Mozambique performs slightly better than the sub-Saharan average for the ease of doing business but below peers such as Botswana and South Africa in the region.  Mozambique ranks 174 out of 190 countries in how easy it is to start a business, taking 17 days to complete the process, requiring 10 procedures, and costing 120 percent of the per capita income.  The report also indicates that getting credit and enforcing contracts are comparatively more challenging in Mozambique than most countries.  The GRM has made improvements in areas such as getting construction permits and electricity.

Outward Investment

The GRM does not promote or incentivize outward investment.  It also does not restrict domestic investors from investing abroad.  The law does request that domestic investors remit investment income from overseas, except for amounts required to pay debts, taxes, or other expenses abroad.

Policies Toward Foreign Direct Investment

The Namibian government welcomes and encourages foreign investment to help develop the national economy and benefit its population.  The FIA guarantees equal treatment for foreign investors and Namibian firms, including the possibility of fair compensation in the event of expropriation, international arbitration of disputes between investors and the government, the right to remit profits, and access to foreign exchange.  Investment and tax incentives are also available for the manufacturing sector. The government prioritizes investment retention and maintains ongoing dialogue with investors including through investment conferences.

The Namibia Investment Center (NIC), housed at the Ministry of Industrialization, Trade, and Small and Medium Enterprise Development (MITSMED), serves as Namibia’s official investment promotion and facilitation office.  Often the first point of contact for potential investors, the NIC is designed to offer comprehensive services from the initial inquiry stage through to operational stages. The NIC also provides general information packages and advice on investment opportunities, incentives, and procedures.  The NIC is tasked with assisting investors in minimizing bureaucratic red tape, including obtaining work visas for foreign investors, by coordinating with government ministries as well as regulatory bodies.

Limits on Foreign Control and Right to Private Ownership and Establishment

Foreign and domestic entities may establish and own business enterprises and engage in all forms of remunerative activities.  The Ministry of Home Affairs and Immigration grants renewable and non-renewable temporary employment permits for a period of up to 12 months for skills not locally or readily available.  However, work permits and long-term residence permits are subject to bureaucratic hurdles. Complaints about delays in renewing visas and work permits are common.

Foreigners must pay a 10 percent non-resident shareholder tax on dividends.  There are no capital gains or marketable securities taxes, although certain capital gains are taxed as normal income.  As a member of the Common Monetary Area, the Namibian dollar (NAD) is pegged at parity with the South African rand.

There are no mandatory limits on foreign ownership.  Government procurements usually require a variable percentage of local ownership.

Other Investment Policy Reviews

The Namibian government has not undergone any investment policy review in the past three years through the OECD, WTO, or UNCTAD.

Business Facilitation

In 2014, the Namibian government established the Business and Intellectual Property Authority (BIPA) to improve service delivery and ensure effective administration of business and intellectual property rights (IPRs) registration.  BIPA serves as a one-stop-center for all business and IPR registrations and related matters. It also provides general advisory services and information on business registration and IPRs. Website: http://www.bipa.gov.na/  

According to the Business and Intellectual Property Authority Act of 2016, the functions of BIPA include:

• regulate and administer the registration of business and industrial property under the applicable legislation;
• consolidate the offices involved in the registration and administration of business and intellectual property;
• maintain information concerning business and intellectual property; and
• facilitate the flow of relevant information between BIPA and the business community, users of business and intellectual property, general public, and other regulatory authorities and government institutions.

Business in Namibia may be conducted in the form of a public or private company, branch of a foreign company, closed corporation, partnership, joint venture, or sole trader.  Companies are regulated under the 2004 Companies Act, which covers both domestic companies and those incorporated outside Namibia but trading through local branches. To operate in Namibia, businesses must also register with the relevant local authorities, the Workmen’s Compensation Commission, and the Social Security Commission.

Most investors find it helpful to have a local presence or a local partner in order to do business in Namibia, although this is not a legal requirement.  Companies usually establish business relationships before tender opportunities are announced. The World Bank’s Doing Business 2018 report notes that it takes 10 steps and an average of 66 days to start a business in Namibia.  Some accounting and law firms provide business registration services.

Outward Investment

Incentives are mainly aimed at stimulating manufacturing, attracting foreign investment to Namibia, and promoting exports.  To take advantage of the incentives, companies must be registered with MITSMED and the Ministry of Finance. Tax and non-tax incentives are accessible to both existing and new manufacturers.  The NIC maintains a list of investment incentives on its website: http://investnamibia.gov.na/incentives-regime/  

Namibia has an Export Processing Zone (EPZ) regime that offers favorable conditions for companies wishing to manufacture and export products.  The EPZ scheme is due to be phased out, possibly in 2019, and replaced by Special Economic Zones, although no proposals have been made as to what the new format would include.  New applications are still being accepted under the existing EPZ regime. In 2019, there were 19 EPZ companies in operation, most of which were closely linked to minerals beneficiation, including Namzinc (which produces Special High Grade zinc at the Skorpion zinc mine), Namibia Custom Smelters (which produces blister copper from imported copper concentrates), and a variety of diamond cutting and polishing operations (which cut and polish locally and internationally sourced rough diamonds).

Policies Towards Foreign Direct Investment

The Netherlands is the sixteenth-largest economy in the world and the fifth largest in the European Monetary Union (the eurozone), with a gross domestic product (GDP) of over USD 900 billion (773 billion euros).  According to the International Monetary Fund (IMF), the Netherlands is consistently among the three largest source and recipient economies for foreign direct investment (FDI) in the world, although the Netherlands is not the ultimate destination for the majority of this investment.  The government of the Netherlands maintains liberal policies toward FDI, has established itself as a platform for third-country investment with some 145 investment agreements in force, and adheres to the Organization for Economic Cooperation and Development (OECD) Codes of Liberalization and Declaration on International Investment, including a National Treatment commitment and adherence to relevant guidelines.

The Netherlands is the recipient of eight percent of all FDI inflow into the EU.  Of all EU member states, it is the top recipient of U.S. FDI, at over 16 percent of all U.S. FDI abroad as of 2017.  The Netherlands has become a key export platform and pan-regional distribution hub for U.S. firms. Roughly 60 percent of total U.S. foreign-affiliate sales in the Netherlands are exports, with the bulk of them going to other EU members.

In 2014, foreign-owned companies made inward direct investment worth USD 15.8 billion (14.2 billion euros) – just over 30 percent of total corporate investment in durable goods in the Netherlands.  Foreign investors provide 19 percent of Dutch employment in the private sector (860,200 jobs). U.S. firms contribute the most among foreign firms to employment, responsible for 214,000 jobs. In its 2017 investment report, the UN Conference on Trade and Development (UNCTAD) identified the Netherlands as the world’s fifth largest destination of global FDI inflows and the third largest source of FDI outflows.

Although policy makers fear that a Brexit will be detrimental for the Dutch economy, so far the Netherlands is benefitting from companies exiting the United Kingdom in anticipation of Brexit.  According to the Netherlands Foreign Investment Agency (NFIA), the number of companies interested in moving to the Netherlands because of Brexit increased from 80 in 2017 to 150 in 2018 to 250 in 2019.  The companies are coming mainly from the health, creative industry, financial services, and logistics sectors.  The Dutch Authority for the Financial Markets (AFM) has predicted Amsterdam will emerge as a main post-Brexit financial trading center in Europe for automated trading platforms and other ‘fintech’ firms, allowing these companies to keep their European trading within the confines of the EU after Brexit.

Dutch tax authorities provide a high degree of customer service to foreign investors, seeking to provide transparent, precise tax guidance that makes long-term tax obligations more predictable.  Advance Tax Rulings (ATR) and Advance Pricing Agreements (APA) are guarantees given by local tax inspectors regarding long-term tax commitments for a particular acquisition or Greenfield investment.  Dutch tax policy continues to evolve as the EU seeks to harmonize tax measures across members states. A more detailed description of Dutch tax policy for foreign investors can be found at http://investinholland.com/incentives-and-taxes/   and http://investinholland.com/incentives-and-taxes/fiscal-climate/  .

Dutch corporations and branches of foreign corporations are currently subject to a corporate tax rate of 25 percent on taxable profits, which puts the Netherlands in the middle third among EU countries’ corporate tax rates and below the tax rates of its larger neighbors.  Profits up to USD 240,000 (200,000 euros) are taxed at a rate of 19 percent.  In October 2018, the Dutch government announced it would lower its corporate tax rate to 20.5 percent in 2021, with profits up to USD 240,000 taxed at a 15 percent rate from 2021 onwards.

Dutch corporate taxation generally allows for exemption of dividends and capital gains derived from a foreign subsidiary.  Surveys of the corporate tax structure of EU member states note that both the corporate tax rate and the effective corporate tax rate in the Netherlands are around the EU average.  Nevertheless, the Dutch corporate tax structure ranks among the most competitive in Europe considering other beneficial measures such as ATAs and/or APAs. The Netherlands also has no branch profit tax and does not levy a withholding tax on interest and royalties.

Maintaining an investment-friendly reputation is a high priority for the Dutch government, which provides public information and institutional assistance to prospective investors through the Netherlands Foreign Investment Agency (NFIA) (https://investinholland.com/  ). Historically, over a third of all “Greenfield” FDI projects that NFI attracts to the Netherlands originate from U.S. companies.  Additionally, the Netherlands business gateway at https://business.gov.nl/   – maintained by the Dutch government – provides information on regulations, taxes, and investment incentives that apply to foreign investors in the Netherlands and clear guidance on establishing a business in the Netherlands.

The NFIA maintains six regional offices in the United States (Washington, DC; Atlanta; Boston; Chicago; New York City; and San Francisco).  The American Chamber of Commerce in the Netherlands (https://www.amcham.nl/  ) also promotes U.S. and Dutch business interests in the Netherlands.

Limits on Foreign Control and Right to Private Ownership and Establishment

With few exceptions, the Netherlands does not discriminate between national and foreign individuals in the establishment and operation of private companies.  The government has divested its complete ownership of many public utilities, but in a number of strategic sectors, private investment – including foreign investment – may be subject to limitations or conditions.  These include transportation, energy, defense and security, finance, postal services, public broadcasting, and the media.

Air transport is governed by EU regulation and subject to the U.S.-EU Air Transport Agreement.  U.S. nationals can invest in Dutch/European carriers as long as the airline remains majority-owned by EU governments or nationals from EU member states.  Additionally, the EU and its member states reserve the right to limit U.S. investment in the voting equity of an EU airline on a reciprocal basis that the United States allows for foreign nationals in U.S. carriers.

In concert with the European Union, the Dutch government is considering how to best protect its economic security but also continue as one of the world’s most open economies.  The Netherlands has no formal foreign investment screening mechanism, but the government has begun discussions about developing targeted investment-screening for certain vital sectors that could represent national security vulnerabilities.  The government is in the process of finalizing legislation that will establish investment screening mechanisms in the first of those vital sectors: telecommunications. The Netherlands has certain limitations on foreign ownership in sectors that are deemed of vital national interest (transportation, energy, defense and security, finance, postal services, public broadcasting, and the media).  There is no requirement for Dutch nationals to have an equity stake in a Dutch registered company.

Other Investment Policy Reviews

The Netherlands has not recently undergone an investment policy review by the OECD, World Trade Organization (WTO), or UNCTAD.

Business Facilitation

All companies must register with the Chamber of Commerce and apply for a fiscal number with the tax administration, which allows expedited registration for small- and medium-sized enterprises (SMEs) with fewer than 50 employees:  https://www.kvk.nl/english/ordering-products-from-the-commercial-register/  .

The World Bank’s 2019 Ease of Doing Business Index ranks the Netherlands as number 22 in starting a business.  The Netherlands ranks better than the OECD average on registration time, the number of procedures, and required minimum capital.

The Netherlands business gateway at https://business.gov.nl/   – maintained by the Dutch government – provides a general checklist for starting a business in the Netherlands: https://business.gov.nl/starting-your-business/checklists-for-starting-a-business/general-checklist-for-starting-a-business-in-the-netherlands/  .  The Dutch American Friendship Treaty (DAFT) from 1956 gives U.S. citizens preferential treatment to operate a business in the Netherlands, providing ease of establishment that most other non-EU nationals do not enjoy.  U.S. entrepreneurs applying under the DAFT do not need to satisfy a strict, points-based test and do not have to meet pre-conditions related to providing an innovative product. U.S. entrepreneurs setting up a sole proprietorship only have to register with the Chamber of Commerce and demonstrate a minimum investment of 4,500 euros.  DAFT entrepreneurs receive a two-year residence permit, with the possibility of renewal for five subsequent years.

Policies Towards Foreign Direct Investment

Foreign investment in New Zealand is generally encouraged without discrimination.  New Zealand has an open and transparent economy, where businesses and investors can generally make commercial transactions with ease.  Successive governments accept that foreign investment is an important source of financing for New Zealand and a means to gain access to foreign technology, expertise, and global markets.  Some restrictions do apply in a few areas of critical interest including certain types of land, significant business assets, and fishing quotas. These restrictions are facilitated by a screening process conducted by the Overseas Investment Office (OIO), described in the next section.

New Zealand has a rapidly expanding network of bilateral investment treaties and free trade agreements that include investment components.  New Zealand also has a well-developed legal framework and regulatory system, and the judicial system is generally effective in enforcing property and contractual rights.  Investment disputes are rare, and there have been no major disputes in recent years involving U.S. companies.

The Labour Party-led government has embarked on a program of tighter screening of some forms of foreign investment.  It has also focused on different aspects of trade agreement negotiation compared with the previous government, such as an aversion to investor-state dispute settlement provisions, and moved to restrict the availability of permits for oil and gas exploration.  This will be discussed below in a later section.

Crown entity New Zealand Trade and Enterprise (NZTE) is New Zealand’s primary investment promotion agency.  In addition to its New Zealand central and regional presence, it has 40 international locations, including four offices in the United States.  Approximately half of the NZTE staff is based overseas. The NZTE offers to help investors develop their plans, access opportunities, and facilitate connections with New Zealand-based private sector advisors: https://www.nzte.govt.nz/investment-and-funding/how-we-help.  Once investors independently complete their negotiations, due diligence, and receive confirmation of their investment, the NZTE offers aftercare advice. The NZTE works to channel investment into regional areas of New Zealand to build capability and to promote opportunities outside of the country’s main cities. 

In recent years new visa categories were created for investors and for entrepreneurs, and measures introduced to allow foreign investors – under certain circumstances – to bid alongside New Zealand businesses for contestable government funding for research and innovation grants.  Most of the programs which are operated by NZTE, the Ministry of Business, Innovation, and Employment (MBIE), and Callaghan Innovation, provide support through skills and knowledge, or supporting innovative business ventures. Grants are available, but many are co-funded, requiring some investment by the business owner, and extra conditions apply to non-resident applicants.  For more see: https://www.business.govt.nz/how-to-grow/getting-government-grants/what-can-i-get-help-with/

The New Zealand-United States Council, established in 2001, is a non-partisan organization funded by business and the government.  It fosters a strong and mutually beneficial relationship between New Zealand and the United States through both government-to-government contacts, and business-to-business links.  The American Chamber of Commerce in Auckland provides a platform for New Zealand and U.S. businesses to network among themselves and with government agencies.

Limits on Foreign Control and Right to Private Ownership and Establishment

[Sectors:]

The New Zealand government does not discriminate against U.S. or other foreign investors in their rights to establish and own business enterprises.  It has placed separate limitations on foreign ownership of airline Air New Zealand and telecommunications provider Spark New Zealand (Spark).

Air New Zealand’s constitution requires that no person who is not a New Zealand national hold 10 percent or more of the voting rights without the consent of the Minister of Transport.  There must be between five and eight board directors, at least three of which must reside in New Zealand. In 2013 the government sold a partial stake in Air New Zealand reducing its equity interest from 73 percent to 53 percent.

Spark’s constitution requires at least half of its Board be New Zealand citizens, and at least one director must live in New Zealand.  It requires no person shall have a relevant interest in 10 percent or more of the voting shares without the consent of the Minister of Finance and the Spark Board, and no person who is not a New Zealand national can purchase a relevant interest in more than 49.9 percent of the total voting shares without approval from the Minister of Finance.  This telecommunications service obligation (TSO) – formerly known as the “Kiwishare obligation” – has been in operation since Spark’s privatization in 1990, and was motivated in part because of the vital emergency call service it provides. There are TSOs for charge-free local calling (provided by Spark and supported by Chorus), and for the services for deaf, hearing impaired, and speech impaired people (provided by Sprint International).

The establishment of telecommunications infrastructure provider Chorus resulted from a demerger of Spark in 2011.  Chorus owns most of the telephone infrastructure in New Zealand, and provides wholesale services to telecommunications retailers, including Spark.  The demerger freed Spark from the TSO, but obligated Chorus as a natural monopoly and infrastructure provider. To date the New Zealand government has granted approval to two private companies – in April 2012 and December 2017 – to exceed the 10 percent threshold, and increase their interest in Chorus up to 15 percent.

[National Security: TICSA]

New Zealand screens overseas investment mainly for economic reasons, but has legislation that outlines a framework to protect the national security of telecommunication networks.  The Telecommunications (Interception and Security) Act 2013 (TICSA) sets out the process for network operators to work with the Government Communications Security Bureau (GCSB) – in accordance with Section 7   – to prevent, sufficiently mitigate, or remove security risks arising from the design, build, or operation of public telecommunications networks; and interconnections to or between public telecommunications networks in New Zealand or with networks overseas.   In April 2019 the government signaled it would be considering a “national interest” restriction on foreign investment, when it issued a document for public consultation  .

[Economic Security: OIO]

New Zealand otherwise screens overseas investment to ensure quality investments are made that benefit New Zealand.  Failure to obtain consent before purchase can lead to significant financial penalties. The Overseas Investment Office (OIO) is responsible for screening foreign investment that falls within certain criteria specified in the Overseas Investment Act 2005. 

The OIO requires consent be obtained by overseas persons wishing to acquire or invest in significant business assets, sensitive land, farm land, or fishing quota, as defined below.

A “significant business asset” includes: acquiring 25 percent or more ownership or controlling interest in a New Zealand company with assets exceeding NZD 100 million (USD 68 million); establishing a business in New Zealand that will be operational more than 90 days per year and expected costs of establishing the business exceeds NZD 100 million; or acquiring business assets in New Zealand that exceed NZD 100 million. 

OIO consent is required for overseas investors to purchase “sensitive land” either directly or acquiring a controlling interest of 25 percent or more in a person who owns the land.  Non-residential sensitive land includes land that: is non-urban and exceeds five hectares (12.35 acres); is part of or adjoins the foreshore or seabed; exceeds 0.4 hectares (1 acre) and falls under of the Conservation Act of 1987 or it is land proposed for a reserve or public park; is subject to a Heritage Order, or is a historic or wahi tapu area (sacred Maori land); or is considered “special land” that is defined as including the foreshore, seabed, riverbed, or lakebed and must first be offered to the Crown.  If the Crown accepts the offer, the Crown can only acquire the part of the “sensitive land” that is “special land,” and can acquire it only if the overseas person completes the process for acquisition of the sensitive land.

The Waitangi Tribunal was established by the Treaty of Waitangi Act 1975 to hear Maori claims relating to the loss of land and resources as a result of historical breaches by the Crown of the Treaty of Waitangi signed in 1840.  Maori land claims may not be lodged relating to privately owned land and affect only land owned by the Crown. Some private land titles are noted with a memorial recording that the land, when Crown land, would be subject to a claim and therefore repurchased by the Crown for market value at some future time.  No land in New Zealand has to date been the subject of a repurchase decision.

Where a proposed acquisition involves “farm land” (land used principally for agricultural, horticultural, or pastoral purposes, or for the keeping of bees, poultry, or livestock), the OIO can only grant approval if the land is first advertised and offered on the open market in New Zealand to citizens and residents.  The Crown can waive this requirement in special circumstances at the discretion of the relevant Minister.

Commercial fishing in New Zealand is controlled by the Fisheries Act, which sets out a quota management system that prohibits commercial fishing of certain species without the ownership of a fishing quota which specifies the quantity of fish that may be taken.  OIO legislation together with the Fisheries Act, requires consent from the relevant Ministers in order for an overseas person to obtain an interest in a fishing quota, or an interest of 25 percent or more in a business that owns or controls a fishing quota.

For investments that require OIO screening, the investor must demonstrate in their application they meet the criteria for the “Investor Test” and the “Benefit to New Zealand test.” The former requires the investor to display the necessary business experience and acumen to manage the investment, demonstrate financial commitment to the investment, and be of “good character” meaning a person who would be eligible for a permit under New Zealand immigration law.

The “Benefit to New Zealand test” requires the OIO assess the investment against 21 factors, which are set out in the OIO Act and Regulations.  The OIO applies a counterfactual analysis to those benefit factors that are capable of having a counterfactual applied, the onus is upon the investor to consider the likely counterfactual if the overseas investment does not proceed.  Economic factors are given weighting, particularly if the investment will create new job opportunities, retain existing jobs, and lead to greater efficiency or productivity domestically.

For all four categories the threshold is higher for Australian investors.  Australian non-government investors are screened at NZD 530 million (USD 360 million) and Australian government investors at NZD 111 million (USD 75 million) for 2019, with both amounts reviewed each year in accordance with the 2013 Protocol on Investment to the New Zealand-Australia Closer Economic Relations Trade Agreement.  Separately, non-government investors from CPTPP countries face a screening threshold of NZD 200 million (USD 136 million).

The OIO Regulations set out the fee schedule for lodging new applications which can be costly, currently ranging between NZD 13,000 (USD 8,800) to NZD 54,000 (USD 36,700).  The Overseas Investment Act does not prescribe timeframes within which the OIO must make a decision on any consent applications, and current processing times regularly exceed six months.  In recent years some investors have abandoned their applications, and have been vocal in their frustration with costs and time frames involved in obtaining OIO consent.

The OIO monitors foreign investments after approval.  All consents are granted with reporting conditions, which are generally standard in nature.  Investors must report regularly on their compliance with the terms of the consent. Offenses include: defeating, evading, or circumventing the OIO Act; failure to comply with notices, requirements, or conditions; and making false or misleading statements or omissions.  If an offense has been committed under the Act, the High Court has the power to impose penalties, including monetary fines, ordering compliance, and ordering the disposal of the investor’s New Zealand holdings.

Other Investment Policy Reviews

New Zealand has not conducted an Investment Policy Review through the OECD or the United Nations Conference on Trade and Development (UNCTAD) in the past three years.  New Zealand’s last Trade Policy Review was in 2015 and the next will take place in 2021: https://www.wto.org/english/tratop_e/tpr_e/tp416_e.htm . 

Business Facilitation

The New Zealand government has shown a strong commitment to continue efforts to streamline business facilitation.  According to the World Bank’s Ease of Doing Business 2019 report New Zealand is ranked first in “Starting a Business,” “Registering Property,” “Getting Credit,” and is ranked second for “Protecting Minority Investors.”

There are no restrictions on the movement of funds into or out of New Zealand, or on the repatriation of profits.  No additional performance measures are imposed on foreign-owned enterprises, other than those that require OIO approval.  Overseas investors must adhere to the normal legislative business framework for New Zealand-based companies, which includes the Commerce Act 1986, the Companies Act 1993, the Financial Markets Conduct Act 2013, the Financial Reporting Act 2013, and the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AML/CFT).  The Contract and Commercial Law Act 2017 was passed to modernize and consolidate existing legislation underpinning contracts and commercial transactions. 

The tightening of anti-money laundering laws has impacted the cross-border movement of remittance orders from New Zealanders and migrant workers to the Pacific Islands.  Banks, non-bank institutions, and people in occupations that typically handle large amounts of cash, are required to collect additional information about their customers and report any suspicious transactions to the New Zealand Police.  If an entity is unable to comply with the AML/CFT in its dealings with a customer, it must not do business with that person. For banks this would mean not processing certain transactions, withdrawing the banking products and services it offers, and choosing not to have that person as a customer.  This has resulted in some banks charging higher fees for remittance services in order to reduce their exposure to risks, which has led to the forced closing of accounts held by some money transfer operators. Phase 1 sectors which include financial institutions, remitters, trust and company service providers, casinos, payment providers, and lenders have had to comply with the AML/CFT since 2013.  Under Phase 2 the AML/CFT was extended to lawyers, conveyancers from July 2018, accountants, and bookkeepers from October 2018, and realtors from January 2019.

In order to combat the increasing use of New Zealand shell companies for illegal activities, the Companies Amendment Act 2014 and the Limited Partnerships Amendment Act 2014 introduced new requirements for companies registering in New Zealand.  Companies must have at least one director that either lives in New Zealand, or lives in Australia and is a director of a company incorporated in Australia. New companies incorporated must provide the date and place of birth of all directors, and provide details of any ultimate holding company.  The Acts introduced offences for serious misconduct by directors that results in serious losses to the company or its creditors, and aligns the company reconstruction provisions in the Companies Act with the Takeovers Act 1993 and the Takeovers Code Approval Order 2000.

The Companies Office holds an overseas business-related register, and provides that information to persons in New Zealand who intend to deal with the company or to creditors in New Zealand.  The information provided includes where and when the company was incorporated, if there is any restriction on its ability to trade contained in its constitutional documents, names of the directors, its principal place of business in New Zealand, and where and on whom documents can be served in New Zealand.  For further information on how overseas companies can register in New Zealand: https://www.companiesoffice.govt.nz/companies/learn-about/starting-a-company/register-an-overseas-company-other 

The New Zealand Business Number (NZBN) Act 2016 allows the allocation of unique identifiers to eligible entities to enable them to conduct business more efficiently, interact more easily with the government, and to protect the entity’s security and confidentiality of information.  All companies registered in New Zealand have had NZBNs since 2013, and are also available to other types of businesses such as sole traders and partnerships.

Tax registration is recommended when the investor incorporates the company with the Companies Office, but is required if the company is registering as an employer and if it intends to register for New Zealand’s consumption tax, the Goods and Services Tax (GST), which is currently 15 percent.  Companies importing into New Zealand or exporting to other countries which have a turnover exceeding NZD 60,000 (USD 40,800) over a 12-month period, or expect to pass NZD 60,000 in the next 12 months, must register for GST. Non-resident businesses that conduct a taxable activity supplying goods or services in New Zealand and make taxable supplies in New Zealand, must register for GST:  https://www.ird.govt.nz/index/all-tasks. From 2014, non-resident businesses that do not make taxable supplies in New Zealand have been able to claim GST if they meet certain criteria  . 

To comply with GST registration, overseas companies need two pieces of evidence to prove their customer is a resident in New Zealand, such as their billing address or IP address, and a GST return must be filed every quarter even if the company does not make any sales.

In 2016 mandatory GST registration was extended to non-resident suppliers of “remote services” to New Zealand customers, if they meet the NZD 60,000 annual sales threshold.  In 2018, the government introduced legislation that if enacted, will require non-resident suppliers of low-value import goods to register for GST, if they meet the NZD 60,000 annual sales threshold.  Both are discussed in a later section.

Outward Investment

The New Zealand government does not place restrictions on domestic investors to invest abroad.

NZTE is the government’s international business development agency.  It promotes outward investment and provides resources and services for New Zealand businesses to prepare for export and advice on how to grow internationally.  The Ministry of Foreign Affairs and Trade (MFAT) and Customs New Zealand each operates business outreach programs that advise businesses on how to maximize the benefit from FTAs to improve the competitiveness of their goods offshore, and provides information on how to meet requirements such as rules of origin.

Policies Towards Foreign Direct Investment

Foreign direct investment has all but stopped since the onset of Nicaragua’s political crisis began in April 2018.  The Government of Nicaragua nevertheless continues to seek foreign direct investment.  Investment incentives target export-focused companies that require large amounts of unskilled or low-skilled labor.

The Government of Nicaragua encourages investors to work through ProNicaragua, the country’s investment and export promotion agency.  ProNicaragua provides a range of services, including information packages, investment facilitation, and prospecting services to interested investors.  Its reputation for professionalism has deteriorated over the past few years, becoming increasingly politicized after President Ortega installed his son as the organization’s figurehead.  For more information, see http://www.pronicaragua.org .

Personal connections and affiliation with industry associations and chambers of commerce are critical for foreigners investing in Nicaragua.  Prior to the crisis, the Superior Council of Private Enterprise (COSEP) had functioned as the main private sector interlocutor with the Government of Nicaragua through a series of roundtable and regular meetings with the government.  These roundtables have ceased since the onset of Nicaragua’s crisis in April 2018 as has collaboration between the Government, private sector, and unions.  Though municipal and ministerial authorities may enact decisions relevant to foreign businesses, all actions are subject to de facto approval by the Presidency.

Limits on Foreign Control and Right to Private Ownership and Establishment

Foreign and domestic private entities have the right to establish and own business enterprises and engage in all forms of remunerative activity.  Any individual or entity may make investments of any kind.  In general, Nicaraguan law provides equal treatment for domestic and foreign investment.  There are a few exceptions imposed by specific laws, such as the Border Law (2010/749), which prohibits foreigners from owning land in certain border areas.  Domestic air transportation and television broadcasting also has certain limits on foreign ownership.  In practice, the government also requires that all investments in the energy sector include the state owned enterprise Petronic as a partner.  Other sectors, such as electricity transmission and port and airport operation also have de facto rules to inhibit foreign investment.

Nicaragua allows foreigners to be shareholders of local companies, but a company representative must be a national or a foreigner with legal residence in the country.  Many companies satisfy this requirement by using their local legal counsel as a representative.  Legal residency procedures for foreign investors can take up to eighteen months and require in-person interviews in Managua.

The Government of Nicaragua does not formally screen, review, or approve foreign direct investments.  However, President Daniel Ortega and the executive branch maintain de facto review authority over any foreign direct investment.  This review process remains unclear and opaque.

Other Investment Policy Reviews

In the past three years, the Government of Nicaragua has not undergone any third-party investment policy reviews through multilateral organizations such as the Organization for Economic Co-operation and Development (OECD), World Trade Organization (WTO), or the United Nations Conference on Trade and Development (UNCTAD).

Business Facilitation

Nicaragua does not have an online business registration system.  At a minimum, a company must typically register with the national tax administration, social security administration, and local municipality.  According to the Ministry of Industrial Development and Trade (MIFIC), the process to register a business takes a minimum of 14 days.  In practice, registration usually takes more time.  Establishing a foreign-owned limited liability company (LLC) takes eight procedures and 42 days.  One of the legal representatives of the company must be a resident of Nicaragua.  There is no process for simplified business creation without a notary.  MIFIC has established single window offices (Ventanilla Unica) in several cities in Nicaragua to assist with business registration.

Outward Investment

The Government of Nicaragua does not promote or incentivize outward investment and does not restrict domestic investors from investing abroad.

Policies Towards Foreign Direct Investment

The government of Niger is committed to attracting FDI and has repeatedly pledged to take whatever steps necessary to encourage privatization and increase trade. The country offers numerous investment opportunities, particularly in agriculture, livestock, energy, industry, infrastructure, hydrocarbons, services and mining. In the past several years, new investor codes have been implemented (the most recent being in 2014), transparency has improved, and customs and taxation procedures have been simplified. There are no laws that specifically discriminate against foreign and/or U.S. investors. The government of Niger has demonstrated a willingness to negotiate with prospective foreign investors on matters of taxation and customs.

The Investment Code adopted in 2014 guarantees the reception and protection of foreign direct investment, as well as tax advantages available for investment projects. The Investment Code allows tax exemptions for a certain period and according to the location and amount of projects to be negotiated on a case-by-case basis with the Ministry of Commerce. The code guarantees fair treatment of investors regardless of their origin. The code also offers tax incentives for sectors that the government deems to be priorities and strategic, including energy production, agriculture, fishing, social housing, health, education, crafts, hotels, transportation and the agro-food industry. The code allows free transfer of profits and free convertibility of currencies.

There are no laws or practices that discriminate against foreign investors including U.S. investors.

The High Council for Investment of Niger (HCIN), created in 2017, reports directly to the President of the Republic. HCIN is the platform of public-private dialogue with a view to increasing Foreign Direct Investments, improving Niger’s business environment, and defining private sector priorities to possible investors.

In 2018, Niger’s government reviewed the HCIN’s mission as related to international best practices on attracting FDI. Accordingly, the GoN added by Presidential Decree a Nigerien Agency for the Promotion of Private Investment and Strategic Projects (ANPIPS). This new agency reports to the HCIN and implements the lead agencies policy initiatives.

The government put in place an Institutional Framework for Improving Business Climate Indicators office (Dispositif Institutionnel d’Amélioration et de Suivi du Climat des Affaires), within the Ministry of Commerce, focused on improving business climate indicators. Its goal is to create a framework that permits the implementation of sustainable reforms.

Limits on Foreign Control and Right to Private Ownership and Establishment

Foreign and domestic private entities have the right to establish and own business enterprises. Energy, mineral resources, and national security related sectors restrict foreign ownership and control; otherwise, there are no limitations on ownership or control. In the extractive industries, any company to which the GoN grants a mining permit must give the GoN a minimum 10 percent share of the company. This law applies to both foreign and domestic operations. The GoN also reserves the right to require companies exploiting mineral resources to give the GoN up to a 33 percent stake in their Nigerien operations. Although Ministry of Planning authorization is required, foreign ownership of land is permitted. In 2015, under the auspices of the Ministry of Commerce, the GoN validated a new Competition and Consumer Protection Law, replacing a 1992 law that was never operational. Niger adheres to the Community Competition Law of the West African Economic and Monetary Union (WAEMU) and directives of the Economic Community of West African States (ECOWAS) as well as those offered to investors by the Multilateral Investment Guarantee Agency (MIGA) all of which provide benefits and guarantees to private companies.

Foreign and domestic private entities have the right to establish and own business enterprises. A legal Investment Code governs most activities except accounting, which the Organization for the Harmonization of Business Law in Africa (OHADA) governs. The Mining Code governs the mining sector and the Petroleum Code governs the petroleum sector, with regulations enforced through their respective ministries. The investment code guarantees equal treatment of investors regardless of nationality. Companies are protected against nationalization, expropriation or requisitioning throughout the national territory, except for reasons of public utility.

The state remains the owner of water resources through the Niger Water Infrastructure Corporation (SPEN), created in 2001 and is responsible for the management of the state’s hydraulic infrastructure in urban and semi-urban areas, of its development, and project management. Concessions for the use of water and for the exploitation of works and hydraulic installations may be granted to legal persons governed by private law, generally by presidential decree.

An investment screening mechanism does not exist under the Investment Code.

Other Investment Policy Reviews

In the past three years, the government has not undergone any third-party investment policy reviews through a multi-lateral organization. Neither the United Nations Conference on Trade and Development (UNCTAD), nor the Organization for Economic Cooperation and Development (OECD) has carried out a policy review for Niger.

https://docs.wto.org/dol2fe/Pages/FE_Search/ExportFile.aspx?Id=243443&filename=q/WT/TPR/S362R1-07.pdf 

http://unctad.org/en/Pages/DIAE/Investment percent20Policy percent20Reviews/Investment-Policy-Reviews.aspx  

Business Facilitation

Niger’s one-stop shop, the Maison de l’Entreprise is mandated to enhance business facilitation by mainstreaming and simplifying the procedures required to start a business within a single window registration process.

From 2016 to 2018, the cost and time needed to register businesses dropped from 100,000 CFA (about USD190) to 17,500 CFA (about USD33). Further reforms have included the creation of an e-regulations website (https://niger.eregulations.org/procedure/2/1?l=fr  ), which allows for a clear and complete registration process. Foreign companies may use this website. The website lists government agencies, with which a business must register. The business registration process is about 3 days, down from over 14 days in 2016.

Company registration can be done at the Centre de Formalités des Entreprises (CFE), at the Maison de l’Entreprise, which is designed as a one-stop-shop for registration. Applicants must file the documents with the Commercial Registry (Registre du Commerce et du Crédit Mobilier – RCCM), which has a representative at the one-stop shop.

At the same location, a company can register for taxes, obtain a tax identification number (Numéro d’Identification Fiscale – NIF), register with social security (Caisse nationale de Sécurité Sociale – CNSS), and with the employment agency (Agence Nationale pour la Promotion de l’Emploi – ANPE). Employees can be registered with social security at the same location.

At the moment of company registration, the applicant may also request for the publication of a notice of company incorporation on the Maison de l’Entreprise website: http://mde.ne/spip.php?rubrique10  . The notice of company incorporation can alternatively be published in an official newspaper (journal d’annonces légales).

Outward Investment

The government does not promote outward investment. The government’s policy objectives, as specified in the second Nigerien Renaissance Program (section 1.2), is the development of international markets, especially that of ECOWAS, for Nigerien exports rather than investment.

The GON does not restrict domestic investors from investing abroad.  

Policies Towards Foreign Direct Investment

In 1995 the Nigerian Investment Promotion Commission Act dismantled years of controls and limits on foreign direct investment (FDI), opening nearly all sectors to foreign investment, allowing for 100 percent foreign ownership in all sectors (with the exception of the petroleum sector, where FDI is limited to joint ventures or production sharing contracts), and creating the Nigerian Investment Promotion Commission (NIPC) with a mandate to encourage and assist investment in Nigeria.  The NIPC features a One-Stop Investment Center (OSIC) that nominally includes participation of 27 governmental and parastatal agencies (not all of which are physically present at the OSIC, however) in order to consolidate and streamline administrative procedures for new businesses and investments. Foreign investors receive largely the same treatment as domestic investors in Nigeria, including tax incentives. However, without strong political and policy support, and because of the unresolved challenges to investment and business in Nigeria, the ability of the NIPC to attract new investment has been limited.

The Nigerian government has continued to promote import substitution policies such as trade restrictions and local content requirements in a bid to attract investment that would develop domestic capacity to produce products and services that would otherwise be imported.  The import bans and high tariffs used to advance Nigeria’s import substitution goals have been undermined by smuggling of targeted products (most notably rice and poultry) through the country’s porous borders, and by corruption in the import quota systems developed by the government to incentivize domestic investment.  Despite the government’s stated goal to attract investment, investors generally find Nigeria a difficult place to do business.

Limits on Foreign Control and Right to Private Ownership and Establishment

There are currently no limits on foreign control of investments in Nigeria.  However, in some instances regulatory bodies may insist on Nigerian equity as a prerequisite to doing business.  The NIPC Act of 1995 liberalized the ownership structure of business in Nigeria, so that foreign investors can now own and control 100 percent of the shares in any company (as opposed to the earlier arrangement of 60 percent – 40 percent in favor of Nigerians).

The lack of restrictions applies to all industries, except in the oil and gas sector where investment is limited to joint ventures or production-sharing agreements.  Additional laws restrict industries to domestic investors if they are considered crucial to national security, such as firearms, ammunition, and military and paramilitary apparel.  Foreign investors must register with the NIPC after incorporation under the Companies and Allied Matters Decree of 1990. The Act prohibits the nationalization or expropriation of foreign enterprises except in cases of national interest.

Other Investment Policy Reviews

The OECD completed an investment policy review of Nigeria in May 2015. (http://www.oecd.org/countries/nigeria/oecd-investment-policy-reviews-nigeria-2015-9789264208407-en.htm   ).  The WTO published a trade policy review of Nigeria in 2017 which also includes a brief overview and assessment of Nigeria’s investment climate.  That review is available at: https://www.wto.org/english/tratop_e/tpr_e/tp456_e.htm   .

The United Nations Council on Trade and Development (UNCTAD) published an investment policy review of Nigeria and a Blue Book on Best Practice in Investment Promotion and Facilitation in 2009 (available at unctad.org).  The recommendations from its reports continue to be valid: Nigeria needs to diversify FDI away from the oil and gas sector by improving the regulatory framework, investing in physical and human capital, taking advantage of regional integration and reviewing external tariffs, fostering linkages and local industrial capacity, and strengthening institutions dealing with investment and related issues.  NIPC and the Federal Inland Revenue Service (FIRS) developed a compendium of investment incentives which is available online at: https://nipc.gov.ng/compendium 

Business Facilitation

Although the NIPC offers the One-Stop Investment Centre, Nigeria does not have an online single window business registration website, as noted by Global Enterprise Registration (www.GER.co).  The Nigerian Corporate Affairs Commission (CAC) maintains an information portal, and in 2018 the Trade Ministry launched an online portal for investors called ‘iGuide Nigeria’ (https://theiguides.org/public-docs/guides/nigeria).  While many steps for business registration can be completed online, the final step requires submitting original documents to a CAC office in exchange for final registration.  On average, it takes eight procedures and 10 days to establish a foreign-owned limited liability company (LLC) in Nigeria (Lagos), significantly faster than the regional average for Sub-Saharan Africa at 23 days.  Time required is likely to vary in different parts of the country. Only a local legal practitioner accredited by the Corporate Affairs Commission can incorporate companies in Nigeria. According to the Nigerian Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, foreign capital invested in an LLC must be imported through an authorized dealer, which will issue a Certificate of Capital Importation.  This certificate entitles the foreign investor to open a bank account in foreign currency. Finally, a company engaging in international trade must get an import-export license from the Nigerian Customs Service.

Although not online, the One-Stop Investment Center co-locates relevant government agencies in one place in order to provide more efficient and transparent services to investors.  Investors may pick up documents and approvals that are statutorily required to establish an investment project in Nigeria. The Center assists with visas for investors, company incorporation, business permits and registration, tax registration, immigration, and customs issues.  The Nigerian government has not established uniform definitions for micro, small, and medium enterprises (MSMEs) with different agencies using different definitions, so the process may vary from one company to another.

Outward Investment

The Nigerian Export Promotion Council administered an Export Expansion Grant (EEG) scheme to improve non-oil export performance, but the government suspended the program in 2014 due to concerns about corruption on the part of companies who collected the grants but did not actually export.  After a period of re-evaluation and revision, the program was relaunched in 2018. The federal government set aside 5.12 billion naira (roughly USD 14.2 million) in the 2019 budget for the EEG scheme. The Nigerian Export-Import (NEXIM) Bank provides commercial bank guarantees and direct lending to facilitate export sector growth, although these services are underused.  NEXIM’s Foreign Input Facility provides normal commercial terms of three to five years (or longer) for the importation of machinery and raw materials used for generating exports.

Agencies created to promote industrial exports remain burdened by uneven management, vaguely-defined policy guidelines, and corruption.  Nigeria’s inadequate power supply and lack of infrastructure coupled with the associated high production costs leave Nigerian exporters at a significant disadvantage.  Many Nigerian businesses fail to export because they find meeting international packaging and safety standards is too difficult or expensive. Similarly, firms often are unable to meet consumer demand for a consistent supply of high-quality goods in quantities sufficient to support exports as well as the domestic market.  Therefore, the vast majority of Nigeria’s manufacturers remain unable or uninterested in competing in the international market, especially given the size of Nigeria’s domestic market.

Policies Towards Foreign Direct Investment

Norwegian lawmakers and businesses welcome foreign investment as a matter of policy and the government generally grants national treatment to foreign investors.  In 2013, the Government established “Invest in Norway,” the official investment promotion agency, to help attract and assist foreign investors, particularly in the key offshore petroleum sector and in less developed regions such as northern Norway .

While not a member of the European Union, Norway is an EEA signatory and continues to liberalize its foreign investment legislation to conform more closely to EU standards.  Current laws, rules, and practices follow below.

Limits on Foreign Control and Right to Private Ownership and Establishment

Norway’s investment policies vis-á-vis third countries, including the United States, will likely continue to be governed by reciprocity principles and by bilateral and international agreements.  The European Economic Area (EEA) free trade accord, which came into force for Norway in 1995, requires the country to apply principles of national treatment to EU members and the other EEA members – Iceland and Liechtenstein – in certain areas where foreign investment was prohibited or restricted in the past.  Norway’s investment regime is generally based on the national treatment principle, but ownership restrictions exist on some natural resources and on some activities (fishing/ maritime/ road transport). State ownership in companies can be used as a means of ensuring Norwegian ownership and domicile for these firms.

Government Monopolies

Norway has traditionally barred foreign and domestic investors alike from investing in certain industries, including postal services, railways, and the retail sale of alcohol.  In 2004, Norway slightly relaxed the restrictions, allowing foreign companies to bid on certain commercial postal services (e.g., air express services between countries) and railway cargo services (notably between Norway and Sweden).  In 2016, the government initiated a reform of the railway sector leading to the first railway line opening for competition in 2018. The government has a mandate to allow foreign investment in hydropower (limited to 20 percent of equity), but rarely does so.  However, the government has fully opened the electricity distribution system to foreign participation, making it one of the most liberalized power sectors in the world.

Ownership of Real Property

Foreign investors may generally own real property, though ownership of certain real assets is restricted.  Companies must obtain a concession to acquire rights to own or use various kinds of real property, including forests, mines, tilled land, and waterfalls.  Foreign companies need not seek concessions to rent real estate, e.g. commercial facilities or office space, provided the rental contract period does not exceed ten years.  The two major laws governing concessions are the Act of December 14, 1917, and the Act of May 31, 1974.

Petroleum Sector

The Petroleum Act of November 1996 (superseding the 1985 Petroleum Act) sets forth the legal basis for Norwegian authorities’ awards of petroleum exploration rights, production blocks and follow-up activity.  The Act covers governmental control over exploration, production, and transportation of petroleum.

Foreign oil companies report no discrimination in the award of petroleum exploration and development blocks in recent licensing rounds.  The Norwegian government has implemented EU directives requiring equal treatment of EEA oil and gas companies. The Norwegian offshore concession system complies with EU directive 94/33/EU of May 30, 1994, which governs conditions for awards and hydrocarbon development.  Norway’s concession process operates on a discretionary basis, with the Ministry of Petroleum and Energy awarding licenses based on which company or group of companies it views will be the best overall operator for a particular field, rather than purely competitive bids. A number of U.S. energy companies are present on the Norwegian Continental Shelf (NCS).

The Norwegian government has dismantled former tight controls over the gas pipeline transit network that carries gas to the European market.  All gas producers and operators on the NCS are free to negotiate gas sales contracts on an individual basis, with access to the gas export pipeline network guaranteed.

Norwegian authorities encourage the use of Norwegian goods and services in the offshore petroleum sector, but do not require it.  The Norwegian share of the total supply of goods and services on the NCS has remained at approximately 50 percent over the last decade.

Manufacturing Sector

Norwegian legislation granting national treatment to foreign investors in the manufacturing sector dates from 1995.  Legislation was repealed in July 2002 that formerly required both foreign and Norwegian investors to notify and, in some cases, file burdensome reports to the Ministry of Industry and Trade if their holdings of a company’s equity exceeded certain threshold levels.  Foreign investors are not currently required to obtain government authorization before buying shares of Norwegian corporations.

Financial and Other Services

In 2004, the Norwegian government liberalized restrictions on acquisitions of equity in Norwegian financial institutions.  Current regulations delegate responsibility for acquisitions to the Norwegian Financial Supervisory Authority and streamline the process. Financial Supervisory Authority permission is required for acquisitions of Norwegian financial institutions that exceed defined threshold levels (20, 25, 33 or 50 percent).  The Authority assesses the acquisitions to ensure that prospective buyers are financially stable and that the acquisition does not unduly limit competition.

The Authority applies national treatment to foreign financial groups and institutions, but nationality restrictions still apply to banks.  At least half the members of the board and half the members of the corporate assembly of a bank must be nationals and permanent residents of Norway or another EEA nation.  Effective January 1, 2005, there is no ceiling on foreign equity in a Norwegian financial institution as long as the Authority has granted permission for the acquisition.

The Finance Ministry has abolished remaining restrictions on the establishment of branches by foreign financial institutions, including banks, mutual funds and others.  Under the liberalized regime, Norway grants branches of U.S. and other foreign financial institutions the same treatment as domestic institutions.

Media

Media ownership is regulated by the Media Ownership Act of 1997 and the Norwegian Media Authority.  No individual party, domestic or foreign, may control more than 1/3 of the national newspaper, radio and/or television markets without a concession.  National treatment is granted in line with Norway’s obligations under the EEA accord. The introduction and growing importance of new media forms (including those emerging from the internet and wireless industries) has raised concerns that the existing domestic legal regime (which largely focuses on printed media) is becoming outmoded.

Other Investment Policy Reviews

The Organization for Economic Cooperation and Development (OECD) conducted an Economic Survey for Norway in 2018:  https://www.oecd-ilibrary.org/economics/oecd-economic-surveys-norway-2018_eco_surveys-nor-2018-en  

Business Facilitation

Altinn is a web portal that serves as a one-stop shop for establishing a company and contains the necessary forms; it also provides an electronic dialogue between the business/industry sector, citizens and other stakeholders, and government agencies.  The business registration processes are straight-forward, complete, and open to foreign companies. Please note, however, that registration of Norwegian Registered Foreign Business Enterprises (NUF) cannot be done electronically. A guide for establishing a business is available at the following address: https://www.altinn.no/en/start-and-run-business/  

Outward Investment

The government does not incentivize outward investment.  Norway’s Government Pension Fund Global, the largest sovereign wealth fund in the world, owns 1.4 percent of all listed companies in the world.

Policies Towards Foreign Direct Investment

Oman actively seeks foreign direct investment and is in the process of improving the regulatory framework to encourage such investments.  A draft foreign capital investment law proposes to allow 100 percent foreign ownership and remove the minimum capital requirement to provide foreign investors with an open market in Oman: privileges already extended to U.S. nationals due to the provisions in the U.S.-Oman Free Trade Agreement (FTA).  If enacted, this law could boost foreign investment.

The Government of Oman’s (GoO) “In-Country Value” (ICV) policy seeks to incentivize companies, both Omani and foreign, to procure local goods and services and provide training to Omani national employees.  The GoO includes bidders’ demonstrations of support for ICV as one factor in government tender awards. While the GoO initially applied ICV primarily to oil and gas contracts, the principle is now embedded in government tenders in all sectors, including transportation and tourism.  The original policy included a number of factors to determine a project’s ICV rating including capital investment, local training, local supplier development, and investment in local institutions. This GoO policy aims to increase economic diversification and local capacity building.  New-to-market foreign companies, including U.S. firms, may find the bid requirements related to ICV prohibitive.

Limits on Foreign Control and Right to Private Ownership and Establishment

With the implementation of the United States-Oman FTA in 2009, U.S. firms may establish and fully own a business in Oman without a local partner.  Although U.S. investors are provided national treatment in most sectors, Oman has an exception in the FTA for legal services, limiting U.S. ownership in legal services firms to no more than 70 percent.  The GoO also has a “negative list” that restricts foreign investment to safeguard national security interests. The list includes some services related to radio and television transmission as well as air and internal waterway transportation. 

According to current Omani laws, foreign nationals seeking to own 100 percent shares in local companies must seek approval of the Ministry of Commerce and Industry (MOCI).  To obtain such approval, a company must submit a detailed business plan highlighting the capital investment and the projected benefits to the Omani economy, including the number of local jobs to be created; minimum of two shareholders and two directors and minimum capital of one million Omani rials (RO) (approximately USD 2.6 million).

Over the past year, Oman has banned non-Omani ownership of real estate and land in various governorates and other areas the government deems necessary to restrict under Royal Decree 29/2018.  However, Oman has allowed the establishment of real estate investment funds (REIF) in order to encourage new inflows of capital into Oman’s property sector. The new regulations permit foreign investors, as well as expatriates in Oman, to own units in REIFs.  The first Omani REIF is set to debut on the Muscat Securities Market in 2019.

Other Investment Policy Reviews

Oman has not undergone any third-party investment policy reviews in the past five years.  The last World Trade Organization (WTO) Trade Policy Review was in April 2014, before the drop in global oil prices.  (Link to 2014 report: https://www.wto.org/english/tratop_e/tpr_e/tp395_e.htm  .)

Business Facilitation

The GoO has tasked the Public Authority for Investment Promotion and Export Development (ITHRAA), with attracting foreign investors and smoothing the path for business formation and private sector development.  ITHRAA works closely with government organizations and businesses based in Oman and internationally to provide a comprehensive range of business support. ITHRAAalso offers a comprehensive range of business investor advice geared exclusively to support international companies looking to invest in Oman, and this service is based on company-specific needs.

MOCI has an online business registration site, known as “Invest Easy” (business.gov.om  ), and businesses can obtain a Commercial Registration certificate from MOCI in approximately three or four days.  However, commercial registration and licensing decisions often require the approval of multiple ministries, slowing down the process in many cases. 

Outward Investment

The government neither promotes nor provides incentives for outward investment but does not restrict its citizens from investing abroad.

Policies Towards Foreign Direct Investment

In the past decade, Pakistan was unable to attract sufficient foreign investments to support desired growth objectives and remains a low priority country for foreign investors.  The previous government recognized Pakistan’s need for foreign investment and introduced an Investment Policy, in 2013, to attract foreign investment and also signed an economic co-operation agreement with China, the China Pakistan Economic Corridor (CPEC), in April 2015.  CPEC is focused mainly on infrastructure and energy production.  Given that several large CPEC energy projects went online in 2018, Pakistan’s government has been able to develop sufficient power generation capacity in the country, though deficiencies in the transmission and distribution network remain.

The previous government also introduced incentives, which remain in place under the current PTI government, through the Strategic Trade Policy Framework (STPF) and Export Enhancement Packages (EEP).  These incentives are largely industry-specific and include tax breaks, tax refunds, tariff reductions, the provision of dedicated infrastructure, and investor facilitation services.  The current government is reportedly working on its own STPF, but has not announced a new policy.  Pakistan also designated special economic zones (SEZs), which the PTI government continues to develop, which offer a separate basket of incentives to potential investors.  None of the SEZs are fully operational, but they have attracted some investment and are available to any company, domestic or foreign.

Net inflows of FDI peaked at USD 5.4 billion in fiscal year FY2008.  [Note:  Pakistan’s fiscal year in runs from July 1 to June 30.  End Note.]  In FY2018, net FDI was USD 3.1 billion, approximately 14.8 percent higher than FY2017.  According to the State Bank of Pakistan (SBP), the largest share of FDI (USD 997 million) was in the power sector (largely due to Chinese FDI in CPEC projects), followed by USD 708 million in the construction sector, and USD 400 million in financial business.  Most analysts believe that the improved security environment, large energy projects under CPEC, and improvements in macroeconomic stability have played a key role in the improvement of FDI in FY2018.  China remained the single largest FDI contributor in Pakistan, contributing more than 58 percent of Pakistan’s total FDI in FY2018.  During the last five years, cumulative FDI inflows remained USD 10 billion, over 81 percent in non-manufacturing sectors.  Since the PTI government started in 2018, Pakistan has signed Memorandum of Understandings (MoUs) with Saudi Arabia, the United Arab Emirates, and Malaysia.  These MoUs agreed to bring investments of over USD 21 billion, largely in the areas of energy, agriculture and oil and gas exploration.

Notwithstanding the substantial increase in Chinese FDI, non-Chinese sources are limited.  Compared to the region, low FDI is attributed to Pakistan offering competitive returns in only a few sectors.  For example, multinational companies in the consumer goods sector have witnessed steady profits, while pharmaceuticals have been obstructed by opaque and restrictive government regulations.  Power companies have also experienced an uptick in business since CPEC, but mostly by conventional energy providers; renewable energy providers have encountered obstacles in the form of inconsistent and discouraging policies from regulators.  The current government is working on introducing new energy policy for the next 25 years.  It aims to have 20-30 percent share of all energy come from renewable energy by 2030, compared to the current share of 2-3 percent.  The ICT sector has risen steadily, albeit from a relatively low base.  Growth has come from companies engaged in outsourcing services and software development.

Pakistan has a low tax-to-gross domestic product (GDP) ratio of approximately 13 percent in FY2018, which slightly increased from FY2017.  [Note:  For comparison, OECD countries averaged 32-34 percent over the past decade.  End Note]  Pakistan relies heavily on multinational corporations for a significant portion of the tax collections.  Foreign investors in Pakistan regularly report that both federal and provincial tax regulations are difficult to navigate.  The World Bank’s Doing Business 2019 report notes that companies pay 47 different taxes, compared to an average of 24.8 in other South Asian countries.  On average, calculating these payments requires that business spend on average over 293 hours per year.  In addition, companies frequently lament the lack of transparency in the assessment of taxes.  Since 2013, the government has requested advance tax payments from companies, complicating businesses’ operations as the government intentionally delays tax refunds.

The Foreign Private Investment Promotion and Protection Act, 1976, and the Furtherance and Protection of Economic Reforms Act, 1992, provide legal protection of foreign investors and investment in Pakistan.  All sectors and activities are open for foreign investment unless specifically prohibited or restricted for reasons of national security and public safety.  Specified restricted industries include arms and ammunitions; high explosives; radioactive substances; securities, currency and mint; and consumable alcohol.

The specialized investment promotion agency of Pakistan is the Board of Investment (BOI).  The BOI is responsible for the promotion of investment, facilitating local and foreign investors for implementation of their projects, and to enhance Pakistan’s international competitiveness.  They assist companies and investors who intend to invest in Pakistan and facilitate the implementation and operation of their projects.

Limits on Foreign Control and Right to Private Ownership and Establishment

The 2013 Investment Policy eliminated minimum initial capital investment requirements across sectors so that no minimum investment requirement or upper limit on the share of foreign equity is allowed, with the exception of the airline, banking, agriculture, and media sectors.  Foreign investors in the services sector may retain 100 percent equity – subject to obtaining permission, a no objection certificate, or license from the concerned agency, as well as fulfilling the requirements of respective sectoral policy.  In the education, health, and infrastructure sectors, 100 percent foreign ownership is allowed, while in the agricultural sector, the threshold is 60 percent – with an exception for corporate agriculture farming, where 100 percent ownership is allowed.  There are no restrictions on payments of royalties and technical fees for the manufacturing sector, but there are restrictions on other sectors, including a USD 100,000 limit on initial franchise investments and a cap on subsequent royalty payments of 5 percent of net sales for five years.  Royalties and technical payments are subject to a 15 percent income tax, and subject to remittance restrictions listed in Chapter 14, section 12 of the SBP Foreign Exchange Manual (http://www.sbp.org.pk/fe_manual/index.htm ).  The tourism, housing, construction, and information and communications technology sectors have been granted “industry status,” eligible for lower tax and utility rates compared to “commercial sector” enterprises, including banks and insurance companies.  Small-scale mining valued at less than PKR 300 million (roughly USD 2.6 million) is restricted to Pakistani investors.

With the exception of arms, ammunition, high explosives, radioactive substances, private security companies, currency, and consumable alcohol, foreign investors are allowed in all sectors.  There are no restrictions or mechanisms that specifically exclude U.S. investors.

Since signing the World Trade Organization (WTO) Financial Services Agreement in December 1997, Pakistan’s financial services commitments have improved.  Foreign banks can establish locally incorporated subsidiaries and branches, provided they have USD 5 billion or belong to one of the regional organizations or associations to which Pakistan is a member (e.g., Economic Cooperation Organization (ECO) or the South Asian Association for Regional Cooperation (SAARC)).  Absent these requirements, foreign banks are limited to a 49-percent maximum equity stake in locally incorporated subsidiaries.  Foreign and local banks must submit an annual branch expansion plan to the SBP for approval.  The SBP approves branch openings based on the bank’s net worth, adequacy of capital structure, future earnings prospects, credit discipline, and the needs of the local population.  All banks are required to open 20 percent of their new branches in small cities, towns, and villages.

The Foreign Private Investment Promotion and Protection Act stipulates that foreign investments will not be subject to higher income taxes than similar investments made by Pakistani citizens.  While Pakistan’s legal code and economic policy do not discriminate against foreign investments, enforcement of contracts remains problematic due to a weak and inefficient judiciary.  Pakistani courts have not upheld some international arbitration awards.

Pakistan maintains investment screening mechanisms for inbound foreign investment.  The BOI is the lead organization for such screening.  Pakistan blocks foreign investments if the screening process determines the investment could negatively affect Pakistan’s national security.

Other Investment Policy Reviews

Pakistan has not undergone any third-party investment policy reviews in last three years.  The International Monetary Fund assessed the nation’s overall macro economy under Article-IV consultation in 2018; however, that review was not specific to investment policy.

Business Facilitation

Pakistan works with the World Bank to improve its overall ease of doing business standing.  The government has simplified pre-registration and registration facilities and automated land records to simplify property registrations.  To improve cross border trade, it has also improved electronic submissions and processing of trade documents.  Even so, Pakistan ranked 130 out of 190 countries in the World Bank Doing Business 2019 report’s “Starting a Business” category.  Pakistan is ranked 26 out of 190 for protecting minority investors.  Starting a business in Pakistan normally involves 10 procedures and takes at least 16.5 days.

The Securities and Exchange Commission of Pakistan (SECP) manages company registrations.  Both foreign and domestic companies begin the registration by providing a company name and paying the requisite registration fees to the SECP.  Companies then supply documentation on the proposed business, including information on corporate offices, location of company headquarters, and a copy of the company charter.  Companies must apply for national tax numbers with the Federal Board of Revenue (FBR) to facilitate payment of income and sales taxes.  Industrial or commercial establishments with five or more employees must register with Pakistan’s Federal Employees Old-Age Benefits Institution (EOBI) for social security purposes.  Depending on the location, registration with provincial governments may be required.

The SECP website (www.secp.gov.pk ) offers the Virtual One Stop Shop (OSS) where companies can register with the SECP, FBR, and EOBI simultaneously.  OSS is also available for foreign investors.

The government’s investment policy provides both domestic and foreign investors the same incentives, concessions, and facilities for industrial development.  Though some incentives are included in the federal budget, the government relies on Statutory Regulatory Orders (SROs) for industry specific taxes or incentives.  For example, an SRO issued in February 2019 imposed additional labeling requirements for imported goods, creating non-tariff barriers.

Outward Investment

Pakistan does not promote or incentivize outward investment.  Although the government does not explicitly prohibit Pakistanis from investing abroad, the process of approvals is so cumbersome it normally takes years, discouraging potential investors.

Policies Towards Foreign Direct Investment

Panama depends heavily on foreign investment and has worked to make the investment process attractive and simple.  With few exceptions, the Government of Panama makes no distinction between domestic and foreign companies for investment purposes.  Panama benefits from stable and consistent economic policies, a dollarized economy, and a government that consistently supports trade and open markets.

The United States runs a multi-billion dollar trade surplus with Panama.  Both countries signed a Trade Promotion Agreement (TPA) that entered into force in October 2012.  The U.S.-Panama TPA has significantly liberalized trade in goods and services, including financial services.  The TPA also includes sections on customs administration and trade facilitation, sanitary and phyto-sanitary measures, technical barriers to trade, government procurement, investment, telecommunications, electronic commerce, intellectual property rights, and labor and environmental protection.

Panama has one of the few Latin American economies that is predominantly services-based.  Services represent nearly 90 percent of Panama’s GDP. The TPA has improved U.S. firms’ access to Panama’s services sector and gives U.S. investors better access than other WTO Members under the General Agreement on Trade in Services.  All services sectors are covered under the TPA, except where Panama has made specific exceptions. Under the agreement, Panama has provided improved access in sectors like express delivery, and granted new access in certain areas that had previously been reserved for Panamanian nationals.  In addition, Panama is a full participant in the WTO Information Technology Agreement.

The office of Panama’s Vice Minister of International Trade within the Ministry of Commerce and Industry is the principal entity responsible for promoting and facilitating foreign investment and exports.  Through its Proinvex service (http://proinvex.mici.gob.pa  ) the government provides investors with information, expedites specific projects, leads investment-seeking missions abroad, and supports foreign investment missions to Panama.  In some cases, other government offices may work with investors to ensure that regulations and requirements for land use, employment, special investment incentives, business licensing, and other requirements are met.  While there is no formal investment screening by the GOP, the government does monitor large foreign investments.

Limits on Foreign Control and Right to Private Ownership and Establishment

The Panamanian government does impose some limitations on foreign ownership in the retail and media sectors where, in most cases, ownership must be Panamanian.  However, foreign investors can continue to use franchise arrangements to own retail within the confines of Panamanian law (under the TPA, direct U.S. ownership of consumer retail is allowed in limited circumstances).

In addition to limitations on ownership, the exercise of approximately 55 professions is reserved for Panamanian nationals.  Medical practitioners, lawyers, accountants, and customs brokers must be Panamanian citizens. Most recently, the Panamanian government instituted a regulation requiring that ride share platforms use drivers that possess commercial licenses, which are available only to Panamanian nationals.  The Panamanian government also requires foreigners in some sectors to obtain explicit permission to work.

With the exceptions of retail trade, the media, and several professions, foreign and domestic entities have the right to establish, own, and dispose of business interests in virtually all forms of remunerative activity.  Foreigners need not be legally resident or physically present in Panama to establish corporations or to obtain local operating licenses for a foreign corporation. Business visas (and even citizenship) are readily obtainable for significant investors.

Other Investment Policy Reviews

N/A

Business Facilitation

Procedures regarding how to register foreign and domestic businesses, as well as how to obtain a notice of operation, can be found at the Ministry of Commerce and Industry’s website (https://www.panamaemprende.gob.pa/  ) where one may register a foreign company, create a branch of a registered business, or register as an individual trader from any part of the world.  Corporate applicants must submit notarized documents to the Mercantile Division of the Public Registry, the Ministry of Trade and Industry and the Social Security Institute.  Panamanian government statistics state that applications for foreign businesses take between one to six days to process.

The process for online business registration is clear and available to foreign companies.  Panama is ranked 48 out of 190 countries for starting a business and 99 out of 190 for protecting minority investors, according to the 2019 World Bank’s Doing Business Report (http://www.doingbusiness.org/en/data/exploreeconomies/panama#DB_rp  ).

Outward Investment

No data is presently available on outward investment.

Policies Towards Foreign Direct Investment

The PNG Government remains focused on fostering an enabling environment for businesses to grow and attract foreign direct investment.

PNG aims to increase Foreign Direct Investments (FDI) in mining and the petroleum/gas sector from USD40.0 million in 2016 to USD100.0 million by 2022. FDI stock reached USD4.2 billion in 2016. The mining, oil, and gas sectors attract most of the FDI. There is a target to increase stock to USD10.0 billion by 2022. The government also aims to increase FDI in the renewable sector.

           The 2017-2032 PNG National Trade Policy (NTP) policy goal is to maximize trade and investment by increasing exports, reducing imports of substitute goods, and increasing FDI that generates wealth and contribute to growing the economy. The NTP envisions a future PNG with “an internationally competitive export-driven economy that is built on and aided by an expanding and efficient domestic market.” The fifteen-year trade policy outlined the following eight policy objectives:

1) To send a strong signal to the international community that PNG is open for business.

2) To expand market access, inclusive of negotiations of terms that will result in market presence for PNG’s products and services in foreign markets, thereby sustaining trade surpluses on both the merchandise and services accounts.

3) To protect consumer welfare through strengthened enforcement of intellectual property rights and ensure national standards and compliance measures are respected.

4) To create an environment in PNG that is conducive for doing business and increasing employment, by ensuring that costs are reduced and are also transparent and predictable.

5) To identify markets where PNG can receive a cost advantage for products of strategic interest and create secure, predictable market access conditions through trade agreements.

6) To advocate for the elimination of large-scale subsidies provided by trading partners that distort international trading prices on products of strategic interest to PNG.

7) To mobilize resources to finance needs of the trade and trade-related sectors.

8) To mainstream the SMEs into trade deals by negotiating clear terms of establishment of foreign firms in PNG’s markets in sectors of strategic interest through goods and services scheduling commitments.

The policy lays out numerous legal, regulatory, and administrative measures to be adopted by the Government of PNG in furtherance of these objectives.  It also sets very ambitious economic targets, including the creation of over 100,000 new jobs, USD 10 billion in foreign investment, increased foreign exchange reserves, reduced government debt to GDP ratio, and a more diversified economy in the next five years.

All these plans’ and priorities’ effectiveness remain to be seen, as plans in PNG can be well set out but lack the Government’s political will and commitment to be implemented.

While investment and labor restrictions have been floated by the government and private sector, there are presently no such restrictions in place.

The Investment Promotion Authority was established by an Act of Parliament in 1992 with the primary mandate to promote and facilitate investment in Papua New Guinea and also to regulate the business industry in the country. The services provided by the Authority include: Business, registration, regulation and certification (under the Business Registration and Certification or Office of the Registrar of Companies), Investor Servicing and Export Promotion (under the Investor Services and Promotion Division), Protection of Intellectual Property Rights (under the Intellectual Property Office of PNG), and regulating capital Markets (under the Securities Commission of PNG).

The mining, petroleum, and gas sectors remain key to the economy of PNG. PNG’s mineral, petroleum, and gas resource projects are owned and operated by foreign investors.

With the important role that the above-mentioned sectors play in the economy, the Cabinet appointed a State Negotiating Team (SNT) in May 2018, comprising heads of various state-owned enterprises, government departments. The SNT leads negotiations between developers and PNG’s key national stakeholders.

In addition, the government of Papua New Guinea (PNG) is a key partner in hosting the annual Petroleum and Energy Summit in Port Moresby. This is the country’s premium petroleum and energy investment forum that brings together international industry experts and investors.

Limits on Foreign Control and Right to Private Ownership and Establishment

Foreign investment in Papua New Guinea is facilitated, regulated and monitored by the Investment Promotion Act.

Section 37 of the Act guarantees that the property of a foreign investor shall not be nationalized or expropriated except in accordance with law, for a public purpose defined by law and in payment of compensation as defined by law.

Foreigners are not allowed to own land in PNG.  Most foreign businesses use long-term leases for land instead of direct purchases.  There are no other specific requirements. PNG recently changed its citizenship laws to allow dual citizenship, which had previously been a limiting factor for Papua New Guineans returning from overseas having naturalized elsewhere.  Another change allows long-term residents to naturalize as PNG citizens with full legal rights and responsibilities.

There are no sector specific restrictions, limitations, or requirements applied to foreign goods.

The Government of Papua New Guinea (GoPNG) screens foreign direct investment. When reviewing an FDI proposal, the Investment Promotion Authority (IPA) may consider a number of factors, including the:

• Potential for positive development of human and natural resources;
• Investor’s past record in Papua New Guinea and elsewhere;
• Creation of additional employment and income-earning opportunities;
• Likelihood the proposal will generate additional government revenue and contribute to economic growth;
• Transfer of technologies and skills and the contribution to training citizens of Papua New Guinea.

There is no specific investment level. The IPA may, however, pursuant to Section 28(7) of the Investment Promotion Act require an applicant for Certification to deposit the prescribed amount prior to a Certificate being issued. The prescribed amounts are per Section 6B of the Investment Promotion Regulation:

• Individual – PGK 50,000 (USD 15,340);
• Partnership – PGK 50,000 (USD 15,340) per partner; and
• Corporate Body – PGK 100,000 (USD 30,680).

The purpose of the screening mechanism is to assess the net economic benefit and alignment with national interest. The possible outcomes of a review are prohibition, divestiture, and imposition of additional requirements. The IPA and other regulatory bodies in particular sectors make the decision on the outcome.

Appeal processes differ among the sectors. For IPA related matters, a company must submit its appeal to the Ministry of Commerce and Industry. An accompanying fee of PGK 200 (USD 61) is required. Appeals may be lodged in response to any decision made by the IPA, including rejection of an application or the cancellation of a registration.

The Bank of Papua New Guinea, PNG’s Central Bank, approves all foreign investment proposals. Such proposals include the issue of equity capital to a non-resident, the borrowing of funds from a non-resident investor or financial intermediary, and the supply of goods and services on extended terms by a non-resident.  In its review, the Bank is mostly concerned that the terms of the investment funds are reasonable in the context of prevailing commercial conditions and that full subscription of loan funds are promptly brought to Papua New Guinea. A debt/equity ratio of 5:1 is generally imposed with respect to overseas borrowings and a ratio of 3:1 with respect to local borrowings.

Other Investment Policy Reviews

The government has not undergone any third party investment policy reviews through a multilateral organization.

Business Facilitation

The Investment Promotion Authority (IPA) through the Companies Office is responsible for the administration of Papua New Guinea’s key business laws.  These include the Companies Act, Business Names Act, Business Groups Incorporation Act and the Associations Incorporation Act.

The services provided by the Authority include: Business, registration, regulation and certification (under the Business Registration and Certification or Office of the Registrar of Companies), investor servicing and export promotion (under the Investor Services and Promotion Division), protection of intellectual property rights (under the Intellectual Property Office of PNG), and regulating capital markets (under the Securities Commission of PNG).

There is comprehensive service information published online (http://www.ipa.gov.pg/business-registration-regulation-and-certification/).

The Investment Promotion Authority (IPA) is the lead agency for GPNG’s business facilitation efforts. It can be reached online at http://www.ipa.gov.pg/  . The new “Do It Online” section allows both overseas and domestic business registration.  Previously, the processing times were substantial, but the current processing time for IPA is seven (7) days.  A foreign company must first register under the Companies Act of 1997. Foreign companies have two options for registration in PNG: to incorporate a new company in PNG or to register an overseas company under the Companies Act of 1997.  In practice, most foreign companies incorporate a new PNG subsidiary when entering the PNG market.

Once incorporated and registered with the IPA, a newly incorporated PNG company or overseas company should also register with the Internal Revenue Commission for tax and employment purposes.  Typically, this process takes nine (9) days.

Outward Investment

Through the IPA, the government has a range of direct and indirect taxation-based incentives for large and small proposals.

There are international treaties, agreements and pacts which give Papua New Guinea’s manufactured goods preferential access to various export markets, including duty free and reduced tariff entry to some of the largest markets in the world, for example the European Union (EU) under the Cotonou Agreement.

The Multilateral Investment Guarantee Agency’s (MIGA) principle responsibility is promotion of investment for economic development in member countries through:

• guarantees to foreign investors against losses caused by non-commercial risks; and
• advisory and consultative services to member countries to assist them in creating a responsive investment climate and information base to guide and encourage flow of capital.

There are no explicit legal restrictions on outward investment. The most likely barrier for this type of investment would be sufficient access to foreign currency.  There have been no recent large-scale outward investments originating from PNG.

Policies Towards Foreign Direct Investment

The Paraguayan government publicly encourages private foreign investment, but U.S. companies often struggle with practices that inhibit or slow their activities.  Paraguay guarantees equal treatment of foreign investors and permits full repatriation of capital and profits. Paraguay has historically maintained the lowest tax burden in the Latin American region, with a 10 percent corporate tax rate and a 10 percent value added tax (VAT) on most goods and services.  Despite these policies, U.S. companies continue to have difficulty with investments in Paraguay, including seemingly frivolous legal entanglements taking multiple years to resolve, non-payment and delayed payments from Paraguayan government customers, and opaque permitting processes that slow project execution.

REDIEX provides useful information for foreign investors, including business opportunities in Paraguay, registration requirements, laws, rules, and procedures.

Limits on Foreign Control and Right to Private Ownership and Establishment

Foreign and domestic private entities may establish and own business enterprises.  Foreign businesses are not legally required to be associated with Paraguayan nationals for investment purposes, though this is strongly recommended, on an unofficial basis, by national authorities.

There is no restriction on repatriation of capital and profits.  Private entities may freely establish, acquire, and dispose of business interests.

Under the Investment Incentive Law (60/90) and the maquila program, the government has an approval mechanism for foreign investments that seeks to estimate the proposed investment’s economic impact in areas including employment, incorporation of new technologies, and economic diversification.

Other Investment Policy Reviews

The WTO conducted an Investment Policy Review in 2017.  Please see following website:

https://docs.wto.org/dol2fe/Pages/FE_Search/FE_S_S009-DP.aspx?language=E&CatalogueIdList=240507,87161,40418,27051&CurrentCatalogueIdIndex=0&FullTextHash=&HasEnglishRecord=True&HasFrenchRecord=False&HasSpanishRecord=False  

Business Facilitation

Paraguay has responded to complaints about its traditionally onerous business registration process — previously requiring new businesses to register with a host of government entities one-by-one — by creating a portal in 2007 that provides one-stop service.  The Sistema Unificado de Apertura y Cierre de Empresas – SUACE (www.suace.gov.py  ) — is the government’s single window for registering a company.  The process takes about 35 days.

Outward Investment

There are no restrictions to Paraguayans investing abroad.  The Paraguayan government does not incentivize or promote outward investment.

Policies Towards Foreign Direct Investment

The GOP seeks to attract investment — both foreign and domestic — in nearly all sectors of the economy.  The GOP prioritized USD 10.3 billion in public-private partnership projects in transportation infrastructure, electricity, mining, broadband expansion, gas distribution, health and sanitation for 2019-2021.  The Ministry of Energy and Mines aims to spur exploration and investment in the mining sector, increase oil and gas exploration, and modernize the Talara refinery.

The 1993 Constitution grants national treatment for foreign investors and permits foreign investment in almost all economic sectors.  Under the Constitution, foreign investors have the same rights as national investors to benefit from investment incentives, such as tax exemptions.  In addition to the 1993 Constitution, Peru has several laws governing foreign direct investment (FDI) including the Foreign Investment Promotion Law (Legislative Decree (DL) 662 of September 1991) and the Framework Law for Private Investment Growth (DL 757 of November 1991).  Other important laws include the Private Investment in State-Owned Enterprises Promotion Law (DL 674), the Private Investment in Public Services Infrastructure Promotion Law (DL 758), and specific laws related to agriculture, fisheries and aquaculture, forestry, mining, oil and gas, and electricity.  Article 6 of Supreme Decree No. 162-92-EF (the implementing regulations of DLs 662 and 757) authorizes private investors to enter all industries except investments in natural protected areas and manufacturing of weapons.

Peruvians and Americans benefit from the United States-Peru Trade Promotion Agreement (PTPA), which entered into force on February 1, 2009.  The PTPA established a secure, predictable legal framework for U.S. investors operating in Peru. The PTPA protects all forms of investment. U.S. investors enjoy the right to establish, acquire, and operate investments in Peru on an equal footing with local investors in almost all circumstances.

The GOP created ProInversion, in 2002, based on an existing, similar investment promotion agency.  ProInversion has completed both privatizations and concessions of state-owned enterprises and natural resource-based industries.  The agency regularly organizes international roadshow events, including in the United States, to attract investors and manages the GOP’s public-private investment project portfolio.  Major recent concession areas include ports, water treatment plants, power generation facilities, mining projects, electrical transmission lines, oil and gas distribution, and telecommunications.  Project opportunities are available on ProInversion’s Project Portfolio page at: http://www.proyectosapp.pe/modulos/JER/PlantillaProyectoEstadoSector.aspx?are=1&prf=2&jer=5892&sec=30  .

The GOP passed legislative decrees in July 2018 to attract and facilitate investment.  These include measures to reform the public-private partnership (PPP) process. The reforms establish the Economy and Finance Ministry (MEF) as the PPP policymaking authority in the country and allows government entities to contract out PMO services throughout all stages of the PPP process, including through the GOP promotion investment agency Proinversion. The regulations also established that Proinversion’s board of directors will be composed of GOP Ministers, reversing an earlier decree that allowed for two private sector representatives on the board. The GOP established an investment research portal within the invierte.pe public investment online database (https://www.mef.gob.pe/es/aplicativos-invierte-pe?id=5455).  While ProInversion does not maintain an ongoing dialogue with investors, it has authority to oversee PPP investments throughout their lifecycles. The GOP plans to publish a National Infrastructure Plan in July 2019, with infrastructure projects keyed to critical sectors outlined in a National Competitveness Plan that will be published by the end of 2019.

To spur project financing, the GOP loosened banking regulations to enable an entity to operate more than one tier-one financial institution in the country.  A new Tourism Entrepreneurship Fund created in 2017 will provide grants to finance or co-finance business ventures that incorporate conservation, sustainable use, and economic development in the tourism industry. The GOP later developed a four-year Tourism Entrepreneurship Program to channel the USD 3 million fund to tourism ventures (http://turismoemprende.pe/  ).  The program aims to fund 24 new tourism ventures worth USD 450,000 in 2018.

Although all Peruvian administrations since the 1990s have vowed to support private investment and abide by Peruvian laws, the GOP occasionally passes measures that some observers regard as a contravention of Peru’s open investment laws.  Furthermore, the GOP in December 2011 signed into law a 10-year moratorium on the entry into Peru of live genetically modified organisms (GMOs) to be used for cultivation. Peru also implemented two sets of rules for importing pesticides, one for commercial importers, which requires importers to file a full dossier with technical information, and another for end-user farmers, which only requires a written affidavit.

Limits on Foreign Control and Right to Private Ownership and Establishment

The Constitution (Article 6 under Supreme Decree No. 162-92-EF) authorizes foreign investors to carry out any economic activity provided investors comply with all constitutional precepts, laws, and treaties.  Exceptions exist, including exclusion of foreign investment activities in natural protected reserves and manufacturing of military weapons, pursuant to Article 6 of Legislative Decree No. 757. While long-term concessions are granted, the law states Peruvians must maintain majority ownership in certain strategic sectors:  media; air, land and maritime transportation infrastructure; and private security surveillance services.

Prior approval is required in the banking and defense-related sectors.  Foreigners are legally prohibited from owning a majority interest in radio and television stations in Peru; nevertheless, foreigners have in practice owned controlling interests in such companies.  Under the Constitution, foreign interests cannot “acquire or possess under any title, mines, lands, forests, waters, or fuel or energy sources” within 50 kilometers of Peru’s international borders. However, foreigners can obtain concessions and rights within the restricted areas with the authorization of a supreme resolution approved by the Cabinet and the Joint Command of the Armed Forces.

The GOP does not screen, review, or approve foreign direct investment outside of those sectors that require a governmental waiver.

Other Investment Policy Reviews

The World Trade Organization (WTO) published a Trade Policy Review on Peru in 2013.  The WTO commented that foreign investors receive the same legal treatment as local investors in general, although foreign investment on maritime services, air transport, and broadcasting is restricted.  The report also noted that the Peruvian government promotes public-private partnerships to build infrastructure and spur economic growth, with tax exemptions and low-cost financing available for domestic and foreign investors alike.

Report available at: https://www.wto.org/english/tratop_e/tpr_e/tp389_e.htm  

Peru aspires to become a member of the Organization for Economic Cooperation and Development (OECD).  Peru launched an OECD Country Program on December 8, 2014, comprising policy reviews and capacity building projects, and allowing it to participate in substantive work of OECD’s specialized committees.  An 18-month OECD review identified economic, social, and political obstacles that could hamper Peru’s OECD membership aspirations. The government noted that the study would act as a “roadmap” for Peru’s goal to achieve membership by 2021.  The OECD published the Initial Assessment of its Multi-Dimensional Review of Peru in October 2015, finding that in spite of economic growth, Peru “still faces structural challenges to escape the middle-income trap and consolidate its emerging middle class.”  In every year since this study was published, Peru has enacted and implemented dozens of governance reforms to modernize its governance practices in line with OECD recommendations.

Report: www.oecd.org/countries/peru/multi-dimensional-review-of-peru-9789264243279-en.htm  

Peru has not had any third-party investment policy review (IPR) through the OECD, WTO, or UNCTAD in the past three years.

Business Facilitation

The GOP does not have a regulatory system to facilitate business operations but the Competition and Consumer Protection Agency (INDECOPI) regulates the enactment of new regulations by government entities that can place burdens on business operations.  INDECOPI’s authority allowing it to block any new business regulations can limit restrictions of businesses. In addition, the GOP passed in 2016 a “sunset law” that requires a review of existing regulations by government agencies.

Peru allows foreign business ownership, provided that a company has at least two shareholders and that its legal representative is a Peruvian resident.  The process takes an average of 43 days and involves 11 procedures. An entrepreneur must reserve the company name through the national registry, SUNARP (www.sunarp.gob.pe  ), and prepare a deed of incorporation through Portal de Servicios al Ciudadano y a las Empresas (http://www.serviciosalciudadano.gob.pe/  ).  The deed is then signed and filed with a Public Notary, with notary fees of up to 1 percent of a company’s capital, before submission to the Public Registry.  The company’s legal representative must obtain a Certificate of Registration and tax identification number from the National Tax Authority. Finally, the company must obtain a license from the municipality of the jurisdiction in which it is located.

All foreign investments must be registered with ProInversion.  The agency helps potential investors navigate investment regulations and provides sector-specific information on the investment process.

Outward Investment

The GOP promotes outward investment by Peruvian entities through the Ministry of Foreign Trade and Tourism (MINCETUR).  Trade Commission Offices of Peru (OCEX’s), under the supervision of Peru’s export promotion agency (PromPeru) are located in numerous countries, including the United States, and promote the export of Peruvian goods and services and inward foreign investment.  The GOP does not restrict domestic investors from investing abroad.

Policies Towards Foreign Direct Investment

The Philippines seeks foreign investment to generate employment, promote economic development, and contribute to sustained growth.  The Board of Investments (BOI) and PEZA are the lead investment promotion agencies (IPAs). They provide incentives and special investment packages to investors.  Noteworthy advantages of the Philippine investment landscape include free trade zones, including PEZAs, and a large, educated, English-speaking, relatively low-cost Filipino workforce.  Philippine law treats foreign investors the same as their domestic counterparts, except in sectors reserved for Filipinos by the Philippine Constitution and the Foreign Investment Act (see details under Limits on Foreign Control section).  Additional information regarding investment policies and incentives are available on the BOI   and PEZA   websites.

Restrictions on foreign ownership, inadequate public investment in infrastructure, and lack of transparency in procurement tenders hinder foreign investment.  The Philippines’ regulatory regime remains ambiguous in many sectors of the economy, and corruption is a significant problem. Large, family-owned conglomerates, including San Miguel, Ayala, and SM, dominate the economic landscape, crowding out other smaller businesses.

Limits on Foreign Control and Right to Private Ownership and Establishment

Foreigners are prohibited from fully owning land under the 1987 Constitution, although the 1993 Investors’ Lease Act allows foreign investors to lease a contiguous parcel of up to 1,000 hectares (2,471 acres) for a maximum of 75 years.  Dual citizens are permitted to own land.

The 1991 Foreign Investment Act (FIA) requires the publishing every two years of the Foreign Investment Negative List (FINL), which outlines sectors in which foreign investment is restricted.  The latest FINL was released in October 2018. The FINL bans foreign ownership/participation in the following investment activities: mass media (except recording and internet businesses); small-scale mining; private security agencies; utilization of marine resources, including the small-scale use of natural resources in rivers, lakes, and lagoons; cooperatives; cockpits; manufacturing of firecrackers and pyrotechnic devices; and manufacturing, repair, stockpiling and/or distribution of nuclear, biological, chemical and radiological weapons and anti-personnel mines.  With the exception of the practices of law, radiologic and x-ray technology, and marine deck and marine engine officers, other laws and regulations on professions allow foreigners to practice in the Philippines if their country permits reciprocity for Philippine citizens, these include medicine, pharmacy, nursing, dentistry, accountancy, architecture, engineering, criminology, teaching, chemistry, environmental planning, geology, forestry, interior design, landscape architecture, and customs brokerage. In practice, however, language exams, onerous registration processes, and other barriers prevent this from taking place.

The Philippines limits foreign ownership to 40 percent in the manufacturing of explosives, firearms, and military hardware.  Other areas that carry varying foreign ownership ceilings include: private radio communication networks (40 percent); private employee recruitment firms (25 percent);  advertising agencies (30 percent); natural resource exploration, development, and utilization (40 percent, with exceptions); educational institutions (40 percent, with some exceptions); operation and management of public utilities (40 percent); operation of commercial deep sea fishing vessels (40 percent); Philippine government procurement contracts (40 percent for supply of goods and commodities); contracts for the construction and repair of locally funded public works (40 percent with some exceptions); ownership of private lands (40 percent); and rice and corn production and processing (40 percent, with some exceptions).

Retail trade enterprises with capital of less than USD 2.5 million, or less than USD 250,000, for retailers of luxury goods, are reserved for Filipinos.  The Philippines allows up to full foreign ownership of insurance adjustment, lending, financing, or investment companies; however, foreign investors are prohibited from owning stock in such enterprises, unless the investor’s home country affords the same reciprocal rights to Filipino investors.

Foreign banks are allowed to establish branches or own up to 100 percent of the voting stock of locally incorporated subsidiaries if they can meet certain requirements.  However, a foreign bank cannot open more than six branches in the Philippines. A minimum of 60 percent of the total assets of the Philippine banking system should, at all times, remain controlled by majority Philippine-owned banks.  Ownership caps apply to foreign non-bank investors, whose aggregate share should not exceed 40 percent of the total voting stock in a domestic commercial bank and 60 percent of the voting stock in a thrift/rural bank.

Other Investment Policy Reviews

The World Trade Organization (WTO) and the Organization for Economic Co-operation and Development (OECD) conducted a Trade Policy Review of the Philippines in March 2018 and an Investment Policy Review of the Philippines in 2016, respectively.  The reviews are available online at the WTO website. (https://www.wto.org/english/tratop_e/tpr_e/tp468_e.htm ) and OECD website (http://www.oecd.org/daf/oecd-investment-policy-reviews-philippines-2016-9789264254510-en.htm ).

Business Facilitation

Business registration in the Philippines is cumbersome due to multiple agencies involved in the process.  It takes an average of 31 days to start a business in Quezon City in Metro Manila, according to the 2019 World Bank’s Ease of Doing Business report.  Touted as one of the Duterte Administrations’ landmark laws, the Republic Act No. 11032 or the Ease of Doing Business and Efficient Government Service Delivery Act amends the Anti-Red Tape Act of 2007, and legislates standardized deadlines for government transactions, a single business application form, a one-stop-shop, automation of business permits processing, a zero contact policy, and a central business databank.

The law was passed in May 2018, and it creates an Anti-Red Tape Authority (ARTA – http://arta.gov.ph/  ) under the Office of the President to carry out the mandate of business facilitation.  ARTA is governed by a council that includes the Secretary’s of Trade and Industry, Finance, Interior and Local Governments, and Information and Communications Technology.  The Department of Trade and Industry serves as interim Secretariat for ARTA. Without the rules and regulations being issued, compliance has not been in effect. The implementing rules and regulations are currently being drafted (http://arta.gov.ph/pages/IRR.html  ).

The Philippines also signed into law the Revised Corporation Code, a business friendly legislation amendment that encourages entrepreneurship, improves the ease of business, and promotes good corporate governance.  This new law amends part of the four-decade-old Corporation Code and allows for existing and future companies to hold a perpetual status of incorporation, compared to the previous 50-year term limit which required renewal.  More importantly, the amendments allow for the formation of one-person corporations, providing more flexibility to conduct business; the old code required all incorporation to have at least five stockholders and provided less protection from liabilities.

Outward Investment

There are no restrictions on outward portfolio investments for Philippine residents, defined to include non-Filipino citizens who have been residing in the country for at least one year; foreign-controlled entities organized under Philippine laws; and branches, subsidiaries, or affiliates of foreign enterprises organized under foreign laws operating in the country.  However, outward investments funded by foreign exchange purchases above USD 60 million or its equivalent per investor per year, or per fund per year for qualified investors, may require prior approval.

Policies Towards Foreign Direct Investment

Poland welcomes foreign investment as a source of capital, growth, and jobs, and as a vehicle for technology transfer, research and development (R&D), and integration into global supply chains.  The government’s Strategy for Responsible Development identifies key goals for attracting investment, including improving the investment climate, a stable macroeconomic and regulatory environment, and high-quality corporate governance, including in state-controlled companies.  By the end of 2017, according to IMF and National Bank of Poland data, Poland attracted around USD 239 billion (cumulative) in foreign direct investment (FDI), principally from Western Europe and the United States. In 2017, reinvested profits dominated the net inflow of FDI to Poland.  The greatest reinvestment of profits occurred in services and manufacturing, reflecting the change of Poland’s economy to a more service-oriented and less capital-intensive structure.

Foreign companies generally enjoy unrestricted access to the Polish market.  However, Polish law limits foreign ownership of companies in selected strategic sectors, and limits acquisition of real estate, especially agricultural and forest land.  Additionally, the current government has expressed a desire to increase the percentage of domestic ownership in some industries such as banking and retail which have large holdings by foreign companies, and has employed sectoral taxes and other measures to advance this aim.  In March 2018, Sunday trading ban legislation went into effect, which is gradually phasing out Sunday retail commerce in Poland, especially for large retailers. In 2019, stores may operate an average of one Sunday a month, and in 2020 a total ban will be in effect (with the exception of seven Sundays).  Polish authorities have publicly favored introducing a digital services tax. Since no draft has been released, the details of such a tax are unknown, but it would affect mainly foreign digital companies.

There is a variety of Polish agencies involved in investment promotion:

• The Ministry of Entrepreneurship and Technology has two departments involved in investment promotion and facilitation: the Investment Development and the Trade and International Relations Departments.  The Deputy Minister supervising the Investment Development Department was appointed in 2019 to be ombudsman for foreign investors. https://www.gov.pl/web/przedsiebiorczosc-technologia/  
• The Ministry of Foreign Affairs (MFA) promotes Poland’s foreign relations including economic relations, and along with the Polish Chamber of Commerce (KIG), organizes missions of Polish firms abroad and hosts foreign trade missions to Poland.   https://www.msz.gov.pl/  ; https://kig.pl/  
• The Polish Investment and Trade Agency (PAIH) is the main institution responsible for promotion and facilitation of foreign investment. The agency is responsible for promoting Polish exports, for inward foreign investment and for Polish investments abroad. The agency operates as part of the Polish Development Fund, which integrates government development agencies.  PAIH coordinates all operational instruments, such as commercial diplomatic missions, commercial fairs and programs dedicated to specific markets and sectors. The Agency has opened offices abroad including in the United States (San Francisco and Washington, D.C, Los Angeles, Chicago, Houston and New York. PAIH’s services are available to all investors. https://www.paih.gov.pl/en  
• The Polish Chamber of Commerce in the United States (POLCHAM USA), located in Washington, D.C., promotes the strengthening of economic and trade relationships between the United States and Poland.  It is an independent, non-profit organization. https://polchamusa.org/  

Limits on Foreign Control and Right to Private Ownership and Establishment

Poland allows both foreign and domestic entities to establish and own business enterprises and engage in most forms of remunerative activity per the Entrepreneurs’ Law which went into effect on April 30, 2018.  Forms of business activity are described in the Commercial Companies Code. Poland does place limits on foreign ownership and foreign equity for a limited number of sectors. Polish law limits non-EU citizens to 49 percent ownership of a company’s capital shares in the air transport, radio and television broadcasting, and airport and seaport operations sectors.  Licenses and concessions for defense production and management of seaports are granted on the basis of national treatment for investors from OECD countries.

Pursuant to the Broadcasting Law, a television broadcasting company may only receive a license if the voting share of foreign owners does not exceed 49 percent and if the majority of the members of the management and supervisory boards are Polish citizens and hold permanent residence in Poland.  In January 2017, a team comprised of officials from the Ministry of Culture and National Heritage, the National Broadcasting Council (KRRiT) and the Office of Competition and Consumer Protection (UOKiK) was created in order to review and tighten restrictions on large media, and limit foreign ownership of the media.  While no legislation has been introduced, there is concern that possible future proposals may limit foreign ownership of media sector.

In the insurance sector, at least two management board members, including the chair, must speak Polish.  The Law on Freedom of Economic Activity (LFEA) requires companies to obtain government concessions, licenses, or permits to conduct business in certain sectors, such as broadcasting, aviation, energy, weapons/military equipment, mining, and private security services.  The LFEA also requires a permit from the Ministry of Entrepreneurship and Technology for certain major capital transactions (i.e., to establish a company when a wholly or partially Polish-owned enterprise has contributed in-kind to a company with foreign ownership by incorporating liabilities in equity, contributing assets, receivables, etc.).  A detailed description of business activities that require concessions and licenses can be found here: https://www.paih.gov.pl/publications/how_to_do_business_in_Poland

Polish law restricts foreign investment in certain land and real estate.  Land usage types such as technology and industrial parks, business and logistic centers, transport, housing plots, farmland in special economic zones, household gardens and plots up to two hectares are exempt from agricultural land purchase restrictions.  Since May 2016, foreign citizens from European Economic Area member states, Iceland, Liechtenstein, and Norway, as well as Switzerland, do not need permission to purchase any type of real estate including agricultural land. Investors from outside of the EEA or Switzerland need to obtain a permit from the Ministry of Internal Affairs and Administration (with the consent of the Defense and Agriculture Ministries), pursuant to the Act on Acquisition of Real Estate by Foreigners, prior to the acquisition of real estate or shares which give control of a company holding or leasing real estate.  The permit is valid for two years from the day of issuance, and the ministry can issue a preliminary document valid for one year. Permits may be refused for reasons of social policy or public security. The exceptions to this rule include purchases of an apartment or garage, up to 0.4 hectares of undeveloped urban land, and “other cases provided for by law” (generally: proving a particularly close connection with Poland). Laws to restrict farmland and forest purchases came into force April 30, 2016, and are addressed in more detail in Section 6: Real Property.

Since September 2015 the Act on the Control of Certain Investments has provided for the national security-related screening of acquisitions in high-risk sectors including: energy generation and distribution; petroleum production, processing and distribution; telecommunications; media and mining; and manufacturing and trade of explosives, weapons and ammunition.  Poland maintains a list of strategic companies that can be amended at any time, but is updated at least once a year, usually in January. The national security review mechanism does not appear to constitute a de facto barrier for investment, and does not unduly target U.S. investment.  According to the Act, prior to the acquisition of shares of strategic companies (including the acquisition of proprietary interests in entities and/or their enterprises) the purchaser must notify the controlling government body and receive approval.  The obligation to inform the controlling government body applies to transactions involving the acquisition of a “material stake” in companies subject to special protection. The Act stipulates that failure to notify carries a fine of up to PLN 100,000,000 (approx. USD 25,575,542) or a penalty of imprisonment between six months and five years (or both penalties together) for a person acting on behalf of a legal person or organizational unit that acquires a material stake without prior notification.

The Polish government has drafted an amendment to extend the list of state companies with restrictions on selling shares and to increase the powers of the Prime Minister in the area of state property management.  The companies slated for additional restrictions are pipeline operator PERN, postal service Poczta Polska, aviation group PGL, railway system  PKP and the Special Purpose Vehicle in charge of building Poland’s planned central airport.  The amendment also sanctions possible mergers of such entities.

Other Investment Policy Reviews

The 2018 OECD Economic Survey of Poland can be found here:

http://www.oecd.org/eco/surveys/economic-survey-poland.htm  

Additionally, the OECD Working Group on Bribery has provided recommendations on the implementation of the OECD Anti-Bribery Convention in Poland:  http://www.oecd.org/daf/anti-bribery/poland-oecdanti-briberyconvention.htm  

In March 2018, the OECD published a Rural Policy Review on Poland.  According to this review, Poland has seen impressive growth in recent years, and yet regional disparities in economic and social outcomes remain large by OECD standards.  The review is available at: http://www.oecd.org/poland/oecd-rural-policy-reviews-poland-2018-9789264289925-en.htm  

Business Facilitation

The Polish government has continued to implement reforms aimed at improving the investment climate with a special focus on the SME sector and innovations.  In 2016-18, Poland reformed its R&D tax incentives with new regulations and changes encouraging wider use of the R&D tax breaks. As of January 1, 2019, a new mechanism reducing the tax rate on income derived from intellectual property rights (IP Box) was introduced.  Please see Section 5 of this report for more information.

A package of five laws referred to as the “Business Constitution”—intended to facilitate the operation of small domestic enterprises—was gradually introduced in 2018.  The main principle of the Business Constitution is the presumption of innocence of business owners in dealings with the government.

Poland made enforcing contracts easier by introducing an automated system to assign cases to judges randomly.  Despite these reforms and others, some investors have expressed serious concerns regarding over-regulation, over-burdened courts and prosecutors, and overly-burdensome bureaucratic processes.  The way tax audits are performed has changed considerably. For instance, in many cases the appeal against the findings of an audit now must be lodged with the authority that issued the initial finding rather than a higher authority or third party.

In Poland, business activity may be conducted in forms of a sole proprietor, civil law partnership, as well as commercial partnerships and companies regulated in provisions of the Commercial Partnerships and Companies Code.  Sole proprietor and civil law partnerships are registered in the Central Registration and Information on Business (CEIDG), which is housed by the Ministry of Entrepreneurship and Technology: 

https://prod.ceidg.gov.pl/CEIDG.CMS.ENGINE/?D;f124ce8a-3e72-4588-8380-63e8ad33621f  

Commercial companies are classified as partnerships (registered partnership, professional partnership, limited partnership, and limited joint-stock partnership) and companies (limited liability company and joint-stock company).  A partnership or company is registered in the National Court Register (KRS) and kept by the competent district court for the registered office of the established partnership or company. Local corporate lawyers report that starting a business remains costly in terms of time and money, though KRS registration in the National Court Register averages less than two weeks according to the Ministry of Justice and four weeks according to the World Bank’s 2019 Doing Business Report.  A 2018 law introduced a new type of company—PSA (Prosta Spółka Akcyjna – Simple Joint Stock Company).  PSAs are meant to facilitate start-ups with simpler and cheaper registration procedures. The minimum initial capitalization is 1 PLN (approx. USD 0.26) while other types of registration require 5,000 PLN (approx. USD 1,315) or 50,000 PLN (approx. USD 13,158).  A PSA has a board of directors, which merges the responsibilities of a management board and a supervisory board. The provision for PSA will enter into force in March 2020.

New provisions of the Public Procurement Law (“PPL”) transposing provisions of EU directives coordinating the rules of public procurement came into force on October 18, 2018.  These regulations apply to proceedings concerning contracts with a value equal to or exceeding the EU thresholds.

Polish lawmakers are gradually digitalizing the services of the KRS.   The first change, which entered into force on March 15, 2018, was the obligation to file financial statements with the Repository of Financial Documents via the Ministry of Finance website.  There is also a new requirement for representatives and shareholders of companies to submit statements on their addresses. A requirement to file financial statements exclusively in electronic form entered into force on October 1, 2018, and, beginning in  March 2020, all applications will have to be filed with the commercial register electronically. A certified e-signature may be obtained from one of the commercial e-signature providers listed on the following website: https://www.nccert.pl/  

• General information, National Court Register (KRS): https://ms.gov.pl/en/national-registers/national-court-register/general-information-on-the-national-court-register/  
• Forms in English, National Court Register (KRS): https://ms.gov.pl/en/national-registers/national-court-register/application-forms-used-in-krs/  ;
• Electronic KRS access: https://ms.gov.pl/en/national-registers/national-court-register/electronic-access-to-the-national-court-register/  

Agencies that a business will need to file with in order to register in the KRS:

• Central Statistical Office to obtain a business identification number (REGON) for civil-law partnership http://bip.stat.gov.pl/en/regon/subjects-and-data-included-in-the-register/ 
• ZUS – Social Insurance Agency
  http://www.zus.pl/pl/pue/rejestracja 
• Ministry of Finance
  http://www.mf.gov.pl/web/bip/wyniki-wyszukiwania/?q=business percent20registration  

Both registers are available in English and foreign companies may use them.

Poland’s Single Point of Contact site for business registration and information is: https://www.biznes.gov.pl/en/  and an online guide to choose a type of business registration is: https://www.biznes.gov.pl/poradnik/-/scenariusz/REJESTRACJA_DZIALALNOSCI_GOSPODARCZEJ  

Outward Investment

The Polish Agency for Investment and Trade (PAIH) under the umbrella of the Polish Development Fund, plays a key role in promoting Polish investment abroad.  More information on PFR can be found in Section 7 and at its website: https://pfr.pl/  

The Minister of Foreign Affairs and the Minister of Entrepreneurship and Technology have   significantly reformed Poland’s economic diplomacy. The Polish Information and Foreign Investment Agency (PAIiIZ) was reformed in February 2017 to be the Polish Agency for Investment and Trade (PAIH).  Trade and Investment Promotion Sections in embassies and consulates around the world have been replaced by PAIH offices. These 70 offices worldwide constitute a global network and include six in the United States.  

PAIH offices offer a range of services to include: finding potential partners for Polish manufacturers/exporters; providing information on business opportunities; assisting in the organization of business trips and study tours; and assisting in initiating first contacts between interested local importers, distributors or wholesalers and Polish manufacturers or service providers.  The Agency implements pro-export projects such as the Polish Tech Bridges dedicated to expansion of innovative Polish SMEs.  PAIH has a number of investment/export-oriented government programs specially developed to promote Polish companies abroad such as Go China, Go India, Go Africa, Go ASEAN and Go Arctic.  Vietnam and Iran are also priority investment and export destinations for Poland, though trade with Iran has dropped off since the re-imposition of U.S. sanctions. Poland is a founding member of the Asian Infrastructure Investment Bank (AIIB).  Poland co-founded and actively supports the Three Seas Initiative, which seeks to improve north-south connections in road, energy and telecom infrastructure in 12 countries on NATO’s and the EU’s eastern flank. . PAIH is responsible for the promotion of Poland at the EXPO Dubai 2020. 

The national development bank BGK (Bank Gospodarstwa Krajowego) offers support for goods with a Polish component and depending on the credit can be a minimum of 30-40 percent of net contract revenue.  BGK offers a number of short-term credit instruments like documentary letters of credit for post-financing. BGK offers direct credit for importers to purchase investment goods and services. The Export Credit Insurance Corporation KUKE insures the BGK-issued credit, including for companies from countries with higher trade risk.

Policies Towards Foreign Direct Investment

The Government of Portugal recognizes the importance of foreign investment and sees it as a driver of economic growth.  Portuguese law is based on a principle of non-discrimination, meaning foreign and domestic investors are subject to the same rules.  Foreign investment is not subject to any special registration or notification to any authority, with exceptions for a few specific activities.

The Portuguese Agency for Foreign Investment and Commerce (AICEP) is the lead for promotion of trade and investment.  AICEP is responsible for the attraction of foreign direct investment (FDI), global promotion of Portuguese brands, and export of goods and services.  It is the primary point of contact for investors with projects over EUR 25 million or companies with a consolidated turnover of more than EUR 75 million.  For foreign investments not meeting these thresholds, AICEP will make a preliminary analysis and direct the investor to assistance agencies such as the Institute of Support to Small- and Medium- Sized Enterprises and Innovation (IAPMEI), a public agency within the Ministry of Economy that provides technical support, or to AICEP Capital Global, which offers technology transfer, incubator programs, and venture capital support.  AICEP does not favor specific sectors for investment promotion. It does, however, provide a “Prominent Clusters” guide on its website where it advocates investment in Portuguese companies by sector: http://www.portugalglobal.pt/EN/SourceFromPortugal/prominent-clusters/Pages/prominent-clusters.aspx  .

The Portuguese government maintains regular contact with investors through the Confederation of Portuguese Business (CIP), the Portuguese Chamber of Commerce and Industry and AICEP.  More information can be found at these websites:

• http://cip.org.pt/en/  ;
• http://www.portugalglobal.pt/EN/Pages/Index.aspx  ;
• http://www.ccip.pt/en/  .

Limits on Foreign Control and Right to Private Ownership and Establishment

There are no legal restrictions in Portugal on foreign investment.  To establish a new business, foreign investors must follow the same rules as domestic investors, including mandatory registration and compliance with regulatory obligations for specific activities.  There are no nationality requirements and no limitations on the repatriation of profits or dividends.

Shareholders not resident in Portugal must obtain a Portuguese taxpayer number for tax purposes.  EU residents may obtain this number directly with the tax administration (in person or by means of an appointed proxy); non-EU residents must appoint a Portuguese resident representative to handle matters with tax authorities.

There are national security limitations on both foreign and domestic investments with regard to certain economic activities.  Portuguese government approval is required in the following sectors: defense, water management, public telecommunications, railway, maritime transportation, and air transport.  Any economic activity that involves the exercise of public authority also requires government approval; private sector companies can operate in these areas only through a concession contract.

Portugal additionally limits foreign investment with respect to the production, transmission, and distribution of electricity, the manufacturing of gas, the pipeline transportation of fuels, wholesale services of electricity, retailing services of electricity and non-bottled gas, and services incidental to electricity and natural gas distribution.  Concessions in the electricity and gas sectors are assigned only to companies with headquarters and effective management in Portugal.

Portugal also limits foreign investment in the provision of executive search services, placement services of office support personnel, and publicly-funded social services.

Investors wishing to establish new credit institutions or finance companies, acquire a controlling interest in such financial firms, and/or establish a subsidiary must have authorization from the Bank of Portugal (for EU firms) or the Ministry of Finance (for non-EU firms).  Non-EU insurance companies seeking to establish an agency in Portugal must post a special deposit and financial guarantee and must have been authorized for such activity by the Ministry of Finance for at least five years.

Portugal enacted a national security investment review framework in 2014, giving the Council of Ministers authority to block specific foreign investment transactions.  Reviews can be triggered on national security grounds in strategic industries like energy, transportation and communication. Investment reviews can be conducted in cases where the purchaser acquiring control is an individual or entity not belonging to the European Union.  In such instances, the review process is overseen by the relevant Portuguese ministry according to the assets in question.

Other Investment Policy Reviews

The OECD presented in February 2019 its latest Economic Survey of Portugal, including an updated macro overview and a set of policy recommendations.  The report can be found at: http://www.oecd.org/economy/surveys/Portugal-2019-economic-survey-overview.pdf 

Business Facilitation

Since 2010, the Portuguese Government has prioritized policies to increase the country’s appeal as a destination for foreign investment.  In 2007, the Government established AICEP, a promotion agency for investment and foreign trade that also, through its subsidiary AICEP Global Parques, manages industrial parks and provides business location solutions for investors.

The government has developed effective warehouse and transport logistics, especially at the Sines Port terminal southwest of Lisbon, and telecommunications infrastructure has improved.  In March 2018, construction began on an 80-kilometer railway line between Evora and Elvas, which will improve commercial transportation between the Portuguese ports of Sines and Lisbon, and the Southwestern European Logistics Platform (PLSWE) in Badajoz, Spain, reducing freight transportation times to the rest of Europe.  On January 11, the Portuguese Government launched a EUR 22 billion infrastructure investment plan for 2019 to 2030, listing 72 projects across transportation, energy and water.

Established in 2012, Portugal’s “Golden Visa” program gives fast-track residence permits to foreign investors meeting certain conditions, including making a capital transfer of at least EUR 1 million, creating at least 10 jobs in Portugal, or acquisition of real estate worth at least EUR 500 million.  Since 2012, Portugal has issued 7,208 golden visas to investors. Visa programs such as Portugal’s “Golden Visa” initiative have recently come under scrutiny in the European Union.

Other measures implemented to help attract foreign investment include the easing of some labor regulations to increase workplace flexibility and the creation of a special EU-funded program, Portugal 2020, for projects above EUR 25 million.  Finally, to combat the perception of a cumbersome regulatory climate, the Government has created a “Cutting Red Tape” website detailing measures taken since 2005 to reduce bureaucracy, and the Empresa na Hora (“Business in an Hour”) program that facilitates company incorporation by citizens and non-citizens in less than 60 minutes.  More information is available at http://www.empresanahora.pt/ENH/sections/EN_homepage   and http://www.cuttingredtape.mj.pt/uk/asp/default.asp  .

Portuguese citizens can alternatively register a business online through the “Citizen’s Portal” available at: https://bde.portaldocidadao.pt/evo/landingpage.aspx  .  Companies must also register with the Directorate General for Economic Activity (DGAE), the Tax Authority (AT), and with the Social Security administration.  The government’s service standard for online business registration is a two to three day turnaround but the online registration process can take as little as one day.

Portugal defines an enterprise as micro-, small-, and medium-sized based on its headcount, annual turnover, or the size of its balance sheet.  To qualify as a micro-enterprise, a company must have less than 10 employees and no more than EUR 2 million in revenues or EUR 2 million in assets.  Small enterprises must have less than 50 employees and no more than EUR 10 million in revenues or EUR 10 million in assets. Medium-sized enterprises must have less than 250 employees and no more than EUR 50 million in revenues or EUR 43 million in assets.  The Small- and Medium-Sized Enterprise (SME) Support Institute (IAPMEI) offers financing, training, and other services for SMEs based in Portugal: http://www.iapmei.pt/  .

More information on laws, procedures, registration requirements, and investment incentives for foreign investors in Portugal is available on AICEP’s website: http://www.portugalglobal.pt/  
EN/InvestInPortugal/investorsguide2/
howtosetupacompany/Paginas/ForeignInvestment.aspx  .

Outward Investment

The Portuguese government does not restrict domestic investors from investing abroad.  On the contrary, it promotes outward investment through AICEP’s Customer Managers, Export Stores and its External Commercial Network that, in cooperation with the diplomatic and consular network, are operating in about 80 markets.  AICEP provides support and advisory services on the best way of approaching foreign markets, identifying international business opportunities of Portuguese companies, particularly SMEs. See more at: http://www.portugalglobal.pt/PT/sobre-nos/
Paginas/sobre-nos.aspx#sthash.aifdjkOs.dpuf  .

Policies Towards Foreign Direct Investment

In pursuit of its National Vision 2030, the government of Qatar has enacted reforms to incentivize foreign investment in the economy.  As Qatar finalizes major infrastructure developments in preparation for hosting the 2022 FIFA World Cup, the government has allocated USD 13.2 billion for new, non-oil sector projects in its FY2019 budget.  The government also plans to increase LNG production by 43 percent by 2024. Significant investment in the upstream and downstream sectors is expected. In February 2019, national oil company Qatar Petroleum announced a localization initiative, Tawteen, which will provide incentives to local and foreign investors willing to establish domestic manufacturing facilities for approximately 100 oil and gas sector inputs.  These economic spending plans create significant opportunities for foreign investors.

In 2019, the government enacted a new foreign investment law (Law 1/2019) to ease restrictions on foreign investment.  The law permits full foreign ownership of businesses in most sectors with full repatriation of profits, protection from expropriation, and several other benefits.  Excepted sectors include banking, insurance, and commercial agencies, where foreign capital investment remains limited at 49 percent, barring special dispensation from the Cabinet.  Qatar’s primary foreign investment promotion and evaluation body is the Invest in Qatar Center within the Ministry of Commerce and Industry. The government is currently in the process of publishing regulations for the implementation of the new law; pending these new regulations, the old law still applies (Law 13/2000).  Qatar is also home to the Qatar Financial Centre, Qatar Science and Technology Park, and the Qatar Free Zones, all of which offer full foreign ownership and repatriation of profits, tax incentives, and investment funds for small- and medium-sized enterprises.

In accordance with Law 24/2015, which was enacted to increase transparency of available investment opportunities, the Qatari government streamlined its procurement processes and the Ministry of Finance launched an online procurement portal to consolidate information on government tenders.  The procurement portal can be accessed via this link: https://monaqasat.mof.gov.qa  

When competing for government contracts, preferential treatment is given to suppliers who use local content in their bids.  To further boost local production amid an economic and political rift with neighboring Gulf countries, the government announced in October 2017 that it will favor bids that use Qatari products that meet necessary specifications and obey tender rules.  Participation in tenders with a value of Qatari riyal (QAR) 5 million or less (USD 1.37 million) is confined to local contractors, suppliers, and merchants registered by the Qatar Chamber of Commerce and Industry. Higher-value tenders sometimes do not require any local commercial registration to participate, but in practice certain exceptions exist. 

Qatar maintains ongoing dialogue with the United States through both official and private sector tracks, including through the annual U.S.-Qatar Strategic Dialogue and official trade missions undertaken in cooperation with both nations’ chambers of commerce.  Qatari officials have repeatedly emphasized their desire to increase both American investments in Qatar and Qatari investments in the United States. 

Limits on Foreign Control and Right to Private Ownership and Establishment

The government has recently reformed its foreign investment legal framework.  As noted above, full foreign ownership is now permitted in all sectors with the exception of banking, insurance and commercial agencies.  Law 1/2019 on Regulating the Investment of Non-Qatari Capital in Economic Activity (replacing Law 13/2000) stipulates that foreigners can invest in Qatar either through partnership with a Qatari investor owning 51 percent or more of the enterprise, or by applying to the Ministry of Commerce and Industry for up to 100 percent foreign ownership.  The Invest in Qatar Center within the Ministry of Commerce and Industry is the entity responsible for vetting full foreign ownership applications. The law includes provisions on the protection of foreign investment from expropriation, the exemption of some foreign investment projects from income tax and customs duties, and the right to transfer profits and ownership without delay.

Another recent foreign investment reform is Law 16/2018 on Regulating Non-Qatari Ownership and Use of Properties, which allows foreign individuals, companies, and real estate developers freehold ownership of real estate in 10 designated zones and ‎usufructuary rights up to 99 years in 16 other zones.  Foreigners may also own villas within residential complexes, as well as retail outlets in certain commercial complexes. Foreign real estate investors and owners will be granted residency in Qatar for as long as they own their property. The Committee on Non-Qatari Ownership and Use of Real Estate, formed in December 2018 under the Ministry of Justice, is the regulator of non-Qatari real estate ownership and use. 

There are also other FDI incentives in the country provided by the Qatar Financial Centre, the Qatar Free Zones, and the Qatar Science and Technology Park.  A draft Public-Private Partnership law to facilitate direct foreign investment in national infrastructure development (currently focused on schools, hospitals, and drainage networks) was approved by the Cabinet on April 4, 2019, and is currently pending the Amir’s final review. 

U.S. investors and companies are not any more disadvantaged by ownership or control mechanisms, sector restrictions, or investment screening mechanisms relative to other foreign investors. 

For more information on FDI in Qatar, visit:

• Ministry of Commerce and Industry’s Invest in Qatar Center:  https://invest.gov.qa    
• Qatar Financial Centre:  http://www.qfc.qa/  
• Qatar Free Zones Authority:  https://fza.gov.qa/   
• Qatar Science and Technology Park:  https://qstp.org.qa/  
• Qatar Petroleum Tawteen Program:  https://www.tawteen.com.qa/  

Other Investment Policy Reviews

Qatar underwent a World Trade Organization (WTO) policy review in April 2014.  The review may be viewed on the WTO website: https://www.wto.org/english/tratop_e/tpr_e/tp396_e.htm  

Business Facilitation

Recent reforms have further streamlined the commercial registration process.  Local and foreign investors may apply for a commercial license through the Ministry of Commerce and Industry’s physical “one-stop-shop” or online through the Invest in Qatar Center’s portal.  Per Law 1/2019, upon submission of a complete application, the Ministry will issue its decision within 15 days. Rejected application can be resubmitted or appealed. For more information on the application and required documentation, visit:  https://invest.gov.qa    

The World Bank’s 2019 Doing Business Report estimates that registering a small-size limited liability company in Qatar takes seven to eight days. For detailed information on business registration procedures, as evaluated by the World Bank, visit:   http://www.doingbusiness.org/data/exploreeconomies/qatar/  

Outward Investment

Qatar does not restrict domestic investors from investing abroad.  According to the latest foreign investment survey from the Planning and Statistics Authority, Qatar’s outward foreign investment stock reached USD 105.8 billion in the third quarter of 2018.  In 2017, sectors that accounted for most of Qatar’s outward FDI were finance and insurance (40 percent of total), transportation, storage, information and communication (33 percent), and mining and quarrying (18 percent).  As of 2017, Qatari investment firms held investments in about 80 countries; the top destinations were the European Union (34 percent of total), the Gulf Cooperation Council (GCC, 24 percent), and other Arab countries (14 percent).

Policies Towards Foreign Direct Investment

Romania actively seeks foreign direct investment, and offers a market of around 19 million consumers, a relatively well-educated workforce at competitive wages, a strategic location, and abundant natural resources.  To date, favored areas for U.S. investment include IT and telecommunications, energy, services, manufacturing – especially in the automotive sector, consumer products, and banking. InvestRomania is the government’s lead agency for promoting and facilitating foreign investment in Romania.  InvestRomania offers assistance and advisory services free of charge to foreign investors and international companies for project implementation and opening new offices or manufacturing facilities.

Romania’s accession to the European Union (EU) on January 1, 2007 has helped solidify institutional reform.  Conversely, legislative and regulatory unpredictability, as well as weak public administration, continue to negatively impact the investment climate.  As in any foreign country, prospective U.S. investors should exercise careful due diligence, including consultation with competent legal counsel, when considering an investment in Romania.  Allegedly, in past cases, governments in Romania have allowed political interests or budgetary imperatives to supersede accepted business practices in harmful ways to investor interests.

The energy sector has suffered from recent changes.  In 2018, offshore companies benefited from a streamlined permitting process, but were hit with a windfall profit tax that previously applied only to onshore production.  Additionally, in February 2018 the reference price for natural gas royalties was changed from the Romanian market price to the Vienna Central European Gas Hub (CEGH) price, resulting in a significant increase in royalties.  Energy producers have expressed concern about additional regulatory requirements in EO114, which caps the price of wholesale natural gas, among other modifications. Business associations, including the American Chamber of Commerce in Romania (AmCham), the Foreign Investor Council (FIC), and the Coalition for Romania’s Development, have criticized EO114’s new taxes and how it reverses natural gas market liberalization.

Investments involving public authorities can be more complicated than investments or joint ventures with private Romanian companies.  Some allegations cite that large deals involving the government – particularly public-private partnerships and privatizations of key SOEs – can be stymied by vested political and economic interests, or delayed due to a lack of coordination between government ministries.

In May 2018, the Public-Private Partnership (PPP) Law was revised through emergency ordinance (EO) and responsibility for PPPs of national interest was shifted to the National Strategy and Prognosis Commission.  PPPs of regional or local interest are governed by local authorities. The initiative of implementing a project through a PPP lies exclusively with the public partner. The contribution of the public partner can be in cash, provided the public contribution complies with state aid rules and with public finance legislation.  The public partner can cover costs for stages prior to project implementation, including feasibility studies, and can assume payment obligations or provide guarantees to the project company. According to the PPP law, the public partner initiates the PPP project and awards it according to public procurement rules. Implementation of the PPP legislation will be of considerable interest to investors over the next few years.  The EO is subject to parliamentary review.

In April 2018, the Foreign Investors Council (FIC) issued an open letter to the government and Parliament underscoring business climate uncertainty from the government’s failure to finalize EO 79.  In 2017, EO 79 shifted the burden of mandatory payroll deductions for pensions, healthcare, and income taxes from employers to employees. Parliament has yet to confirm or modify the law, leaving employers uncertain.  To avoid reductions in employee net pay, many companies voluntarily increased salaries to offset employee losses. Other companies, wary of further possible changes, offered monthly bonuses rather than formally amending contracts.

As an example of changes to the taxation regime and ongoing systemic tax disputes between the government and foreign investors, the Ministry of Health (MOH) announced February 2018 an increase in “the clawback tax” for Q4 2017, from 19.42 percent to 23.45 percent.  Pharmaceutical companies pay the clawback tax on all sales of drugs reimbursed through the public health system. The MOH calculates the tax to recover the cost for reimbursed drug sales in the previous quarter that exceed its budget. The pharmaceutical industry, both generic and innovative, immediately decried the tax increase.  Industry sees itself as financing the growth in drug consumption in Romania while the MOH’s budget has remained flat since 2011. The International Innovative Pharmaceutical Producers Association (ARPIM) issued a press release noting that from 2013-2017, pharmaceuticals paid USD 1.75 billion in clawback taxes, exceeding one year of the MOH’s annual budget for drugs in the public health system.  Since implementation of the clawback tax in 2009, the pharmaceutical industry has suggested numerous solutions to address the lack of predictability and transparency in the National Health Insurance House’s computations, but the GOR has shown no interest in increasing government spending for medicine to reduce the tax burden on private companies.

Limits on Foreign Control and Right to Private Ownership and Establishment

Foreign and domestic private entities are free to establish and own business enterprises, and to engage in all forms of remunerative activity.  Romanian legislation and regulation provide national treatment for foreign investors, guarantee free access to domestic markets, and allow foreign investors to participate in privatizations.  There is no limit on foreign participation in commercial enterprises. Foreign investors are entitled to establish wholly foreign-owned enterprises in Romania (although joint ventures are more typical), and to convert and repatriate 100 percent of after-tax profits.

Romania has taken established legal parameters to resolve contract disputes expeditiously.  Mergers and acquisitions are subject to review by the Competition Council. According to the Competition Law, the Competition Council notifies Romania’s Supreme Defense Council regarding any merger or acquisition of stocks or assets which could impact national security.  The Supreme Defense Council then reviews these referred mergers and acquisitions for potential threats to national security. To date, the Supreme Defense Council has not blocked any merger or acquisition. The Romanian capital account was fully liberalized in 2006, prior to gaining EU membership in 2007.  Foreign firms are allowed to participate in the management and administration of the investment, as well as to assign their contractual obligations and rights to other Romanian or foreign investors.

Other Investment Policy Reviews

Romania has not undergone any third-party investment policy reviews through multilateral organizations in over ten years.  The Heritage Foundation’s 2019 Economic Freedom Report indicates that secured interests in private property are recognized.  The Report also notes declines in judicial effectiveness and investment freedom, which outweigh improvements in property rights, the tax burden, and government spending.  The Report identifies labor shortages and political instability as the greatest economic risks.

According to the World Bank, economic growth rates have increased, but the benefits have not been felt by all Romanians.  Progress on implementing reforms and improving the business environment has been uneven. The World Bank’s 2019 Doing Business Report and Doing Business in the European Union Report indicates that Romania ranks below the EU average in the ease of starting a business, dealing with construction permits and setting up utility services.  Starting a business was made more cumbersome by introducing fiscal risk assessment criteria for value-added tax applications, thereby increasing the time required to register as a value-added taxpayer. Numerous international bodies including the European Commission, the Group of States Against Corruption, the Venice Commission, and Transparency International have expressed concern about what has been seen as an attempt to roll-back anti-corruption efforts and called on the Romanian government to focus on strengthening anti-corruption efforts, including introducing stronger corporate ethics standards and implementing existing anti-corruption legislation.  No substantive progress has been made in these areas.

Business Facilitation

The National Trade Registry has an online service available in Romanian at https://portal.onrc.ro/ONRCPortalWeb/ONRCPortal.portal  .  Romania has a foreign trade department within the Ministry of Business Climate, Trade, and Entrepreneurship and an investment promotion department in the Ministry of Economy.  InvestRomania is the government’s lead agency for promoting and facilitating foreign investment in Romania. InvestRomania offers assistance and advisory services free of charge to foreign investors and international companies for project implementation and opening new offices or manufacturing facilities.  More information is available at http://www.investromania.gov.ro/web/  .

According to the World Bank, it takes 6 procedures and 35 days to establish a foreign-owned limited liability company (LLC) in Romania, compared to the regional average for Europe and Central Asia of 5 procedures and 13 days.  In addition to the procedures required of a domestic company, a foreign parent company establishing a subsidiary in Romania must authenticate and translate its documents abroad. Foreign companies do not need to seek an investment approval.  The Trade Registry judge must hold a public hearing on the company’s application for registration within 5 days of submission of the required documentation. The registration documents can be submitted, and the status of the registration request monitored, online.

Companies in Romania are free to open and maintain bank accounts in any foreign currency, although, in practice, Romanian banks offer services only in certain hard currencies including: Euros, U.S. dollars, Swiss francs and Romanian Leu.  The minimum capital requirement for domestic and foreign LLCs is RON 200 (USD 47). Areas for improvement include making all registration documents available to download online in English. Currently only some are available online, and they are only in Romanian.

Romania defines microenterprises as having less than nine employees, small enterprises as having less than 50 employees, and medium sized enterprises as having less than 250 employees.  Regardless of ownership, microenterprises and SMEs enjoy “de minimis” and other state aid schemes from EU funds or from the state budget. Business facilitation mechanisms provide for equitable treatment of women in the economy.  According to the World Bank Doing Business Report, women are able to register a LLC with the same amount of time, cost, and number of procedures as men.

Outward Investment

There are no restrictions on outward investment.  There are no incentives for outward investment.

Policies Towards Foreign Direct Investment

The Ministry of Economic Development (MED) is responsible for overseeing investment policy in Russia. The Foreign Investment Advisory Council (FIAC), established in 1994, is chaired by the Prime Minister and currently includes 53 international company members and four companies as observers. The FIAC allows select foreign investors to directly present their views on improving the investment climate in Russia, and advises the government on regulatory rule-making. Russia’s basic legal framework governing investment includes 1) Law 160-FZ, July 9, 1999, “On Foreign Investment in the Russian Federation”; 2) Law No. 39-FZ,  February 25, 1999, “On Investment Activity in the Russian Federation in the Form of Capital Investment”; 3) Law No. 57-FZ, April 29, 2008, “Foreign Investments in Companies Having Strategic Importance for State Security and Defense”; and 2) the Law of the RSFSR No. 1488-1, June 26, 1991, “On Investment Activity in the Russian Soviet Federative Socialist Republic (RSFSR).” This framework nominally attempts to guarantee equal rights for foreign and local investors in Russia. However, exemptions are permitted when it is deemed necessary to protect the Russian constitution, morality, health, human rights, and national security or defense, and to promote the socioeconomic development of Russia. Foreign investors may freely use their revenues and profits obtained from Russia-based investments for any purpose provided they do not violate Russian law.

Limits on Foreign Control and Right to Private Ownership and Establishment

Russian law places two primary restrictions on land ownership by foreigners. First are restrictions on foreign ownership of land located in border areas or other “sensitive territories.” The second restricts foreign ownership of agricultural land: foreign individuals and companies, persons without citizenship, and agricultural companies more than 50-percent foreign-owned may hold agricultural land through leasehold right. As an alternative to agricultural land ownership, foreign companies typically lease land for up to 49 years, the maximum legally allowed.

President Vladimir Putin signed in October 2014 the law “On Mass Media,” which took effect on January 1, 2015, and restricts foreign ownership of any Russian media company to 20 percent (the previous law applied a 50 percent limit only to Russia’s broadcast sector). U.S. stakeholders have also raised concerns about similar limits on foreign direct investments in the mining and mineral extraction sectors; they describe the licensing regime as non-transparent and unpredictable as well.  In December 2018, the State Duma approved in its first reading a draft bill introducing new restrictions on online news aggregation services. If adopted, foreign companies, including international organizations and individuals, would be limited to a maximum of 20 percent ownership interest in Russian news aggregator websites.

Russia’s Commission on Control of Foreign Investment (Commission) was established in 2008 to monitor foreign investment in strategic sectors in accordance with the SSL. Between 2008 and 2017, the Commission received 484 applications for foreign investment, 229 of which were reviewed, according to the Federal Antimonopoly Service (FAS). Of those 229, the Commission granted preliminary approval for 216 (94 percent approval rate), rejected 13, and found that 193 did not require approval. (See https://fas.gov.ru/p/presentations/86). In 2018, the Commission reviewed 24 applications and granted approvals for investments worth RUB 400 billion (USD 6.4 billion).  International organizations, foreign states, and the companies they control, are treated as single entities under this law, and with their participation in a strategic business, subject to restrictions applicable to a single foreign entity.

Since January 1, 2019, foreign providers of electronic services to business customers in Russia (B2B e-services) have new Russian value-added tax (VAT) obligations. These include: (1) VAT registration with the Russian tax authorities (even for VAT exempt e-services); (2) invoice requirements; and (3) VAT reporting to the Russian tax authorities and VAT remittance rules.

Other Investment Policy Reviews

The WTO conducted the first Trade Policy Review of the Russian Federation in September 2016. Reports relating to the review are available at: https://www.wto.org/english/tratop_e/tpr_e/tp445_e.htm  .

The United Nations Conference on Trade and Development (UNCTAD) issues an annual review of investment and new industrial policies: https://unctad.org/sections/dite_dir/docs/wir2018/wir18_fs_ru_en.pdf  and an investment policy monitor: https://investmentpolicyhub.unctad.org/IPM 

Business Facilitation

The Agency for Strategic Initiatives (ASI) was created by President Putin in 2011 to increase innovation and reduce bureaucracy. Since 2014, ASI has released an annual ranking of Russia’s regions in terms of the relative competitiveness of their investment climates, and provides potential investors with important information about regions most open to foreign investment. ASI provides a benchmark to compare regions, the “Regional Investment Standard,” and thus has stimulated competition between regions, causing an overall improved investment climate in Russia. See https://asi.ru/investclimate/rating/ (in Russian). The Federal Tax Service (FTS) operates Russia’s business registration website: www.nalog.ru.Per law (Article 13 of Law 129-FZ of 2001), a company must register with a local FTS office within 30 days of launching a new business, and he business registration process must not take more than three days, according to. Foreign companies may be required to notarize the originals of incorporation documents included in the application package. To establish a business in Russia, a company must pay a registration fee of RUB 4,000 and register with the FTS. Starting January 1, 2019, a registration fee waived for online submission of incorporation documents.  See http://www.doingbusiness.org/data/exploreeconomies/russia .

The Russian government established in 2010 an ombudsman for investor rights protection to act as partner and guarantor of investors, large and small, and as referee in pre-court mediation facilitation. The First Deputy Prime Minister was appointed as the first federal ombudsman. In 2011, ombudsmen were established at the regional level, with a deputy of the Representative of the President acting as ombudsman in each of the seven federal districts. The ombudsman’s secretariat, located in the Ministry of Economic Development, attempts to facilitate the resolution of disputes between parties. Cases are initiated with the filing of a complaint by an investor (by e-mail, phone or letter), followed by the search for a solution among the parties concerned. According to the breakdown of problems reported to the ombudsman, the majority of cases are related to administrative barriers, discrimination of companies, exceeding of authority by public officials, customs regulations, and property rights protection.

In June 2012, a new mechanism for protection of entrepreneur’s rights was established. Boris Titov, the head of the business organization “Delovaya Rossia” was appointed as the Presidential Commissioner for Entrepreneur’s Rights.

In 2018, Russia implemented four reforms that increased its score in World Bank’s Doing Business ranking. First, Russia made the process of obtaining a building permit faster by reducing the time needed to obtain construction and occupancy permits.  Russia also increased quality control during construction by introducing risk-based inspections. Second, it made getting electricity faster by imposing new deadlines for connection procedures and by upgrading the utility’s single window as well as its internal processes. Getting electricity was also made cheaper by reducing the costs to obtain a connection to the electric network. Third, Russia made paying taxes less costly by allowing a higher tax depreciation rate for fixed assets. Fourth, Russia made trading across borders easier by prioritizing online customs clearance and introducing shortened time limits for its automated completion.

Outward Investment

The Russian government does not restrict Russian investors from investing abroad. In effect since 2015, Russia’s “de-offshorization law” (376-FZ) requires that Russian tax residents notify the government about their overseas assets, potentially subjecting these to Russian taxes.

While there are no restrictions on the distribution of profits to a nonresident entity, some foreign currency control restrictions apply to Russian residents (both companies and individuals), and to foreign currency transactions. As of January 1, 2018, all Russian citizens and foreign holders of Russian residence permits are considered Russian “currency control residents.” These “residents” are required to notify the tax authorities when a foreign bank account is opened, changed, or closed and when there is a movement of funds in a foreign bank account. Individuals who have spent less than 183 days in Russia during the reporting period are exempt from the reporting requirements and the restrictions on the use of foreign bank accounts.

Policies Towards Foreign Direct Investment

Over the past decade, the GOR has undertaken a series of policy reforms intended to improve the investment climate, wean Rwanda’s economy off foreign assistance, and increase FDI levels.  Rwanda enjoys strong economic growth, averaging over 7 percent annually over the last decade, high rankings in the World Bank’s Doing Business report (29 out of 190 economies in 2019 (and second best in Africa) compared to 41 in 2018), and a reputation for low corruption.  The Rwandan economy grew more than 8 percent in 2018 as higher global prices for traditional exports, improved agricultural output, growth in transport and tourism, and a rebound in construction activities helped the country to recover from drought and a cyclical downturn in 2016.  The Rwandan economy will continue to be susceptible to the whims of climatic conditions and fluctuation in global commodity prices for coffee, tea, and minerals.  

Potential and current investors cite a number of hurdles and constraints to doing business in Rwanda, including its landlocked geography and resulting high freight transport costs; a small domestic market; limited access to affordable financing; payment delays with government contracts; and frequently inconsistent application of tax, investment, and immigration rules.  In order to support export growth, the GOR subsidizes transportation costs for agricultural products. Given Rwanda’s landlocked geopolitical situation, the country must rely on strong levels of economic diplomacy with countries that offer access to ports. Any serious breakdown in political relationships with Kenya, Tanzania, or Uganda, could impinge investors’ ability to obtain the necessary inputs required for sustained levels of commerce in Rwanda. 

RDB was established in 2006 to fast track investment projects by integrating all government agencies responsible for the entire investor experience under one roof.  This includes key agencies responsible for business registration, investment promotion, environmental compliance clearances, export promotion and other necessary approvals.  New investors can register online at the RDB’s website and receive a certificate in as fast as six hours, and the agency’s “one-stop shop” helps investors secure required approvals, certificates, and work permits.  RDB took steps to enhance investor after-care in 2017, launching a weekly Investor Open House and quarterly investor dialogues, events where RDB senior management officials meet and engage with business leaders. RDB states its investment priorities are innovation and technology, particularly ICT and green innovation; tourism and real estate; agriculture and food security; energy and infrastructure; and mining.  

In 2018, the GOR implemented improvements designed to stimulate investments.  Examples of these reforms include reducing the time required to obtain construction permits and to clear exports through customs by exporters and enabling a more timely provision of electricity.  The GOR also introduced several online certification processes, including for certificate of origin and phytosanitary approvals. RRA started issuing electronic certificates of origin free of charge.  The National Agricultural Export Board issues certificates of origin for tea and coffee free of charge. Rwanda Energy Group (REG) reports that reforms, including a new online application process, have reduced the time for new connections to the electricity grid from an average of 34 days to 20.  REG claims that newly introduced automation systems will enable it to better monitor frequency and duration of outages, improving grid stability and uptime. According to RDB, certain construction projects will no longer require geotechnical studies. RDB also says that construction permit applications will no longer require a commencement date.  

Investors broadly express satisfaction with RDB’s investment facilitation efforts.  However, some foreign investors complain that implementation can be less smooth due to delays in government payments for services or goods delivered.  Other investors complain that they perceived there were GOR efforts to change contracts or memoranda of understanding after such items were negotiated.  Others have faced surprising tax assessments with little notice. Some investors have faced difficulty in obtaining or renewing work visas, perhaps a result of the GOR’s demonstrated preference for hiring local or East African Community (EAC) residents over other expatriates.  Rwanda’s Directorate General of Immigration and Emigration does not always honor the employment and immigration commitments of investment certificates and deals, according to some investors.  

A number of investors have said a top concern affecting their operations in Rwanda is that tax incentives included in deals signed by the RDB are not fully honored by the RRA.  Investors further cite the inconsistent application of tax incentives and import duties as a significant challenge to doing business in Rwanda. For example, a few investors have said that local customs officials have attempted to charge them duties based on their perception of the value of an import, regardless of the actual purchase price.  Under Rwandan law, foreign firms should receive equal treatment with regard to taxes, as well as access to licenses, approvals, and procurement. Foreign firms should receive VAT tax rebates within 15 days of receipt by the RRA, but firms complain that the process for reimbursement can take months, and occasionally years. RRA introduced new software in 2018 that should allow these refunds to be processed and delivered in a more timely manner.  VAT refunds may also be held up pending the results of RRA audits. RRA aggressively enforces tax requirements and imposes punitive fines for errors – deliberate or not – in tax payments, according to some investors.

Based on Article 15 of Law nº 76/2013 of 11/09/2013, the Office of the Ombudsman has the authority to request that the Supreme Court reconsider and review judgments rendered at the last instance by ordinary, commercial, and military courts, if there is any persistence of injustice.  More information on the review process can be found at https://ombudsman.gov.rw/en/?Court-Judgement-Review-Unit-1375  .  

Limits on Foreign Control and Right to Private Ownership and Establishment

Rwanda has neither statutory limits on foreign ownership or control nor any official economic or industrial strategy that discriminates against foreign investors.  Local and foreign investors have the right to own and establish business enterprises in all forms of remunerative activity.  The Rwandan constitution stipulates that every person has the right to private property, whether personal or in association with others.  The government cannot violate the right to private ownership except in the public interest, and only then after following procedures that are determined by law and subject to fair compensation. 

The law also allows private entities to acquire and dispose of interests in business enterprises.  Foreign nationals may hold shares in locally incorporated companies. The GOR has continued to privatize state holdings, although the government, ruling party, and military continue to play a dominant role in Rwanda’s private sector.  Foreign investors can acquire real estate but with a general limit on land ownership.  While local investors can acquire land through leasehold agreements that extend to a maximum of 99 years, foreign investors are usually restricted to leases up to 49 years with the possibility of renewal.  The government published a new Investment Code in 2015 aimed at providing tax breaks and other incentives to boost FDI.  The Investment Code includes equal treatment for foreigners and nationals with regard to certain operations, free transfer of funds, and compensation against expropriation. 

Other Investment Policy Reviews

In February 2019, The World Trade Organization (WTO) published a Trade Policy Review for the EAC covering Burundi, Kenya, Rwanda, Tanzania and Uganda.  The report is available at: https://docs.wto.org/dol2fe/Pages/FE_Search/FE_S_S006.aspx?Query=(@Symbol= percent20wt/tpr/s/*) percent20and percent20(( percent20@Title= percent20rwanda percent20) percent20or percent20(@CountryConcerned= percent20rwanda))&Language=ENGLISH&Context=FomerScriptedSearch&languageUIChanged=true#   

The Rwanda annex to the report is available at:  https://docs.wto.org/dol2fe/Pages/FE_Search/ExportFile.aspx?Id=251521&filename=q/WT/TPR/S384-04.pdf  

Business Facilitation

The RDB offers one of the fastest business registration processes in Africa.  New investors can register online at the RDB’s website (http://org.rdb.rw/busregonline  ) or register in person at the RDB in Kigali.  Once a certificate of registration is generated, company tax identification and employer social security contribution numbers are also generated automatically.  The RDB “One Stop Center” assists firms in acquiring visas and work permits, connections to electricity and water, and support in conducting required environmental impact assessments.  

In 2018, RRA distributed a new electronic billing software and electronic billing machines that should improve efficiency and introduce additional flexibilities for customer-facing businesses.  This should also support all customers by allowing vendors to issue official VAT invoices from any computer with the new software. The system submits VAT refund claims directly through the RRA E-Tax Portal, which should reduce the time required to process VAT refunds. To reduce the number of cases subjected to audit, RRA is implementing an automated audit case selection process using a risk-based approach to select taxpayers subjected to audit based on compliance history.  The official announcement of these changes is available at: https://www.rra.gov.rw/index.php?id=286&tx_news_pi1 percent5Bnews percent5D=166&tx_news_pi1 percent5Bcontroller percent5D=News&tx_news_pi1 percent5Baction percent5D=detail&cHash=dfd263b497338982e0a9ebff74d52fdb  

The RDB is prioritizing additional reforms to improve the investment climate.  By 2020, it hopes to amend the land policy to merge issuance of free hold titles and occupancy permits; introduce online notarization of property transfers; implement small claims procedure to allow self-representation in court and reduce attorney costs; launch electronic auctioning to reduce time to enforce judgments, reducing court fees and allowing payments electronically; and establish a commercial division at the Court of Appeal to fast-track commercial dispute resolution. 

Rwanda promotes women and gender equality and has pioneered a number of projects to promote women entrepreneurs, including the creation of the Chamber of Women Entrepreneurs within the Rwanda Private Sector Federation (PSF).  Both men and women have equal access to investment facilitation and protections.     

Outward Investment

The government does not have a formal program to provide incentives for domestic firms seeking to invest abroad, but there are no restrictions in place limiting such investment.

Policies Towards Foreign Direct Investment

The government of St. Kitts and Nevis strongly encourages foreign direct investment (FDI), particularly in industries that create jobs, earn foreign currency, and have a positive impact on its citizens.  The country is home to the ECCB, the Eastern Caribbean Securities Exchange (ECSE), and the Eastern Caribbean Securities Regulatory Commission (ECSRC).

Through the St. Kitts Investment Promotion Agency (SKIPA), the government introduced a number of investment incentives for businesses that consider locating in St. Kitts and Nevis.  SKIPA provides “one-stop shop” facilitation services to investors, helping to guide them through the various stages of the investment process. Government policies provide liberal tax holidays, duty-free import of equipment and materials, and subsidies for training local personnel.

The St. Kitts and Nevis government encourages investment in all sectors, but targeted sectors include financial services, tourism, real estate, agriculture, information and communication technologies, international education services, renewable energy, ship registries, and limited light manufacturing.

Limits on Foreign Control and Right to Private Ownership and Establishment

There are no limits on foreign control in St. Kitts and Nevis.  Foreign investors may hold up to 100 percent of an investment. Local enterprises generally welcome joint ventures with foreign investors in order to access technology, expertise, markets, and capital.  There is no limit on the amount of foreign ownership or control in the establishment of a business.

Foreign investment in St. Kitts and Nevis is generally not subject to any restrictions, and foreign investors receive national treatment.  The only exception to this is the requirement to obtain an Alien Landholders License for foreign investors seeking to purchase property for residential or commercial purposes.

Other Investment Policy Reviews

The OECS, of which St. Kitts and Nevis is a member, has not conducted a trade policy review in the last three years.

Business Facilitation

Established in 2007, SKIPA facilitates domestic and foreign direct investment in priority sectors and advises the government on the formation and implementation of policies and programs to attract investment to St. Kitts and Nevis.  SKIPA provides business support services and market intelligence to all investors.

St. Kitts and Nevis ranks 95th of 190 countries in starting a business, which takes seven procedures and about 18.5 days to complete, according to the World Bank’s 2019 Doing Business Report.  It is not mandatory that an attorney prepare relevant incorporation documents. A business must register with the Financial Services Regulatory Commission, the Registrar of Companies, the Ministry of Finance, the Inland Revenue Department, and the Social Security Board.

The government of St. Kitts and Nevis supports the growth of women–led businesses.  The government encourages equitable treatment and support of women in the private sector through non-discriminatory processes for business registration, fiscal incentives, investment opportunities, and quality assessments.

Outward Investment

There is no restriction on domestic investors seeking to do business abroad.  Local companies in St. Kitts and Nevis are actively encouraged to take advantage of export opportunities specifically related to the country’s membership in the OECS Economic Union and the Caribbean Community Single Market and Economy (CSME), which enhance the competitiveness of the local and regional private sectors across traditional and emerging high-potential markets.

Policies Towards Foreign Direct Investment

The government of St. Vincent and the Grenadines, through Invest SVG, strongly encourages FDI in the country, particularly in industries that create jobs and earn foreign currency.  St. Vincent and the Grenadines is an emerging and developing investment player. The government is open to all investment, but is currently prioritizing investment in niche markets, particularly tourism, international financial services, agro-processing, light manufacturing, creative industries, and information and communication technologies.

Invest SVG’s FDI policy is to attract investment into the aforementioned priority sectors, and advise the government on the formation and implementation of policies and programs that attract and facilitate investment.  The government offers special incentive packages for foreign investments in the hotel industry and light manufacturing. The government offers other incentive packages on an ad hoc basis.

The government’s principal goal in opening the new Argyle International Airport was to increase tourism.  Tourism totals about 6 percent of GDP and is expected to increase over the next ten years. St. Vincent and the Grenadines benefits from a low inflation rate and growing opportunities in the trade and export sectors.

Limits on Foreign Control and Right to Private Ownership and Establishment

There are no limits on foreign control in St. Vincent and the Grenadines, nor are there requirements for local involvement or ownership in locally registered companies, although non-nationals must apply for a license from the Prime Minister’s Office to acquire more than 50 percent of a company.  An attorney must submit the application and Cabinet must approved it. Companies holding at least five acres of land may restrict or prohibit the issue or transfer of their shares or debentures to non-nationals.

Invest SVG evaluates all FDI proposals and offers intelligence, business facilitation, and investment promotion to establish and expand profitable investment projects.  Invest SVG advises the government on issues that are important to the private sector to ensure that the business climate continues to improve and attract further investment.

The government has not officially closed any industries to private enterprise, although some activities such as telecommunications, utilities, broadcasting, banking, and insurance require a government license.

Other Investment Policy Reviews

The OECS, of which St. Vincent and the Grenadines is a member, has not conducted a trade policy review in the last three years.

Business Facilitation

Established in 2003 under the Companies Act, Invest SVG facilitates domestic and foreign direct investment in priority sectors and advises the government on the formation and implementation of policies and programs to attract investment.  Invest SVG provides business support services and market intelligence to all investors. It also reviews all investment projects applying for government incentives to ensure they conform to national interests and provide economic benefits to the country.  Invest SVG offers an online resource that is useful for navigating the laws, rules, procedures, and registration requirements for foreign investors. It is available at http://www.investsvg.org  .

According to the World Bank’s 2019 Doing Business Report, St. Vincent and the Grenadines ranks 88th of 190 countries in the ease of starting a business, which takes seven procedures and 10 days to complete.  The general practice is to retain an attorney to prepare all incorporation documents. A business must register with the Commerce and Intellectual Property Office, the Ministry of Trade, the Inland Revenue Department, and the National Insurance Service.  The Commerce and Intellectual Property Office (CIPO) has an online information portal that describes the steps to register a business in St. Vincent and the Grenadines. There is no online registration process, but the required forms are available online.  These must be printed and submitted to the CIPO. More information is available at http://www.cipo.gov.vc  .

Outward Investment

There is no restriction on domestic investors seeking to do business abroad.  Local companies in are actively encouraged to take advantage of export opportunities specifically related to the country’s membership in the OECS Economic Union and the Caribbean Community Single Market and Economy (CSME), which enhance the competitiveness of the local and regional private sectors across traditional and emerging high-potential markets.

Policies Towards Foreign Direct Investment

The Government of Samoa welcomes business and investors.  Samoa’s fertile soil, English-speaking and educated workforce, and tropical climate offer advantages to focused investors, though the country’s distance from major markets affects the cost of imports and exports.  The main productive sectors of the economy are agriculture and tourism, and the economy depends heavily on overseas remittances.

For investors, Samoa offers a trained, productive and industrially adaptable work force that communicates well in English; competitive wage rates; free repatriation of capital and profits; well-developed, reasonably priced transport infrastructure, telecommunications, water supply, and electricity; industry incentive packages for tourism and manufacturing sectors; a stable financial environment with single-digit inflation, a balanced budget and international reserves; relatively low corporate and income taxes; and a pleasant and safe lifestyle.

All businesses in the greater Apia area have access to broadband and Wi-Fi, which is reasonably reliable and fast, but relatively expensive.  In rural Upolu and on Savaii Island there is limited availability of high speed internet and Wi-Fi. However, Samoa recently completed the installation of a National Broadband Highway which will provide fiber optic data services and 4G LTE cellular data speeds to the entire country.  4G LTE data speeds are operative and commercially available to limited areas. 3G internet accessibility from cellular devices is currently available nationwide.

Samoa’s current connection to the internet is through the fiber optic ASH cable, which runs from American Samoa to Hawaii, with the SAS cable linking the two Samoas, and has an expected lifetime through 2020.  Samoa recently finalized a connection to the Southern Cross Cable, the main existing trans-Pacific fiber optic link between Australia and the mainland United States. Internet service providers are currently in the process of transitioning to this cable.

Foreign investors are permitted 100 percent ownership in all different sectors of industry with the exception of restricted activities below.

The following businesses are reserved for Samoan Citizens only:

1. Bus transport services for the general public;
2. Taxi transport services for the general public;
3. Rental vehicles;
4. Retailing;
5. Saw milling; and
6. Traditional elei garment designing and printing.

Please see Samoa’s Foreign Investment Act 2000 for a more detailed Restricted List.  http://www.paclii.org/ws/legis/consol_act/fia2000219/  

Limits on Foreign Control and Right to Private Ownership and Establishment

Foreign investors are permitted 100 percent ownership in all different sectors of the industry with the exception of conditions for restricted activities below.

• Automotive & Ground Transportation
• Consumer Goods & Home Furnishings
• Environmental Technologies
• Textiles, Apparel & Sporting Goods

Please see Samoa’s Foreign Investment Act 2000 for a more detailed Restricted List.  http://www.paclii.org/ws/legis/consol_act/fia2000219/  

Other Investment Policy Reviews

The IMF completed a financial sector assessment with Samoan authorities in 2015.  Readouts from this visit can be found here: http://www.imf.org/external/country/WSM/  

Samoa’s national investment policy statement can be found here: https://www.mcil.gov.ws/services/investment-promotion-and-industry-development/investment-promotion/  

The Strategy for the Development of Samoa can be found here: http://www.mof.gov.ws/Services/Economy/EconomicPlanning/tabid/5618/Default.aspx  

Samoa’s Trade, Commerce, and Manufacturing Sector Plan 2012-2016 Volumes 1&2 are available here: http://www.mof.gov.ws/Services/Economy/SectorPlans/tabid/5811/Default.aspx  

Business Facilitation

The Ministry of Commerce, Industry and Labor (MCIL) administers Samoa’s foreign investment policy and regulations (https://www.mcil.gov.ws  /).  To open up a branch of an existing corporation in Samoa, one must register the company for about USD 150. For a company to qualify as a “Samoan company,” the majority of shareholders must be Samoan.  The fee to register an overseas company is about USD 150. All businesses with foreign shareholdings must obtain and hold valid foreign investment registration certificates. The application fee is about USD 50 and can be obtained by contacting MCIL.  Certificates are valid until the business terminates activity. If a business does not commence activity within two years after a certificate is issued, the certificate becomes invalid. Upon approval of the FIC, the foreign investor is then required to apply for a business license before operating in Samoa.  Fees range from USD 100-250, depending on the type of business.

Land has a special status in Samoa, as it does in most Pacific Island countries.  Under the country’s land classification system, about 80 percent of all land is customary land, owned by villages, with the remainder either freehold (private) or government owned.  The standard method for obtaining customary land, which cannot be bought or sold, is through long-term leases that must be negotiated with the local communities. A typical lease for business use might be for 30 years, with the option of a further 30 years after that, but longer terms can be negotiated.  It should be noted that customary land cannot be mortgaged, and thus cannot be used as collateral to raise capital or credit. Freehold land, mostly based in and around Apia can be bought, sold and mortgaged. Only Samoan citizens may buy freehold land, unless approval is obtained from Samoa’s Head of State.

The Foreign Investment Act 2000 is the preeminent legislation on foreign investment. http://www.paclii.org/ws/legis/consol_act/fia2000219/  

Business Registration

• Step 1: Register your company and get a Foreign Investment Certificate at MCIL. https://www.businessregistries.gov.ws/  
  https://www.mcil.gov.ws/services/business-registration/foreign-investment-registration/   

• Step 2: Obtain a business license and register for VAGST and PAYE from the Ministry of Revenue. http://www.revenue.gov.ws/business-information-guides  
• Step 3: Register with the National Provident Fund. http://npf.ws/empregistration  

• Step 4: Register with the Accident Compensation Board. http://www.acc.gov.ws/Home/tabid/2793/language/en-US/Default.aspx  

This website explains all of these steps in more detail.  http://www.doingbusiness.org/data/exploreeconomies/samoa/starting-a-business/  

Some parts of these registrations can be done online, but most, if not all, require payment in person.

MCIL has an Industry Development and Investment Promotion Division (IDIPD) with services available to all investors: http://www.mcil.gov.ws/index.php/en/division/industry-development-investment-promotion-idipd  

Samoa’s Ministry of Revenue only distinguishes between small/medium enterprises (less than USD 400K in annual turnover) and large enterprises (over USD 400K in annual turnover).  Priority service is given to large enterprises.

Outward Investment

There is minimal outward investment from Samoa beyond several stationery and apparel stores having branches in New Zealand and American Samoa.  The government and economy is more focused on increasing exports of Samoan products. The government does not appear to restrict investment abroad.

Pacific Islands Trade and Invest (https://pacifictradeinvest.com/about/  ) is a resource for companies looking to establish themselves overseas.

Policies Towards Foreign Direct Investment

Sao Tome and Principe is taking steps toward sustainable economic growth.  Its economic prospects likely depend on the government’s ability to attract sustained FDI.  Therefore, the government is anxious to improve the country’s investment climate to make it a more attractive destination for foreign investors.  Under Article 14 of the Investment Code, the State guarantees equal and non-discriminatory treatment to both foreign and domestic investors operating in the country.  The Trade and Investment Promotion Agency (APCI), housed under the Ministry of Planning, Finance and Blue Economy, promotes and facilitates investment through single-window service and multi-sectoral coordination.

Limits on Foreign Control and Right to Private Ownership and Establishment

According to Article 4 of the Investment Code, both domestic and foreign investors are free to establish and own business enterprises, as well as engage in all forms of business activity in STP, except in the sectors defined by law as reserved for the state, specifically military and paramilitary activities and as well as the Central Bank operations.  STP is gradually moving toward open competition in all sectors of the economy, and competitive equality is the official standard applied to private enterprises in competition with public enterprises with respect to access to markets, credit, and other business operations. The government has eliminated former public monopolies in farming, banking, insurance, airline services, telecommunications, and trade (export and import).

There are no limits on foreign ownership or control except for activities customarily reserved for the state, including military, paramilitary, and central bank activities. The form of public participation, namely the percentage of government ownership in joint ventures, varies with each agreement.  Based on Article 8 of the Regulation of the Investment Code, all inbound investment proposals must be screened and approved by the applicable ministry for the economic sector in coordination with APCI. According to Article 14, an investment proposal can be rejected if it threatens national security, public health, or ecological equilibrium and if the proposal has a negative effect or insufficient contribution to country’s economy.  However, these mechanisms do not go beyond the law’s mandate and are not considered barriers to investment.

Other Investment Policy Reviews

The government has not conducted any investment policy reviews through the Organization for Economic Cooperation and Development (OECD).  Neither the World Trade Organization (WTO) nor United National Conference on Trade and Development (UNCTAD) has conducted a review. STP has observer status with WTO and is a member of UNCTAD.

Business Facilitation

STP has taken steps to facilitate investment and improve the business environment in recent years.  The Millennium Challenge Corporation (MCC) worked with STP from 2007 to 2011 on a Threshold Country Program to improve investment opportunities, including creating a “one-stop shop” to help encourage new investments by making it easier and cheaper to import and export goods, reducing the time required to start a new business and improving STP’s tax and customs clearance administration.  Currently a business can be registered within one to five days. These business facilitation services, including the “one-stop-shop” for business registration, offer equal treatment for women and underrepresented minorities in the economy; however, there is no special assistance provided to these groups. The Single Window website   (http://gue-stp.net/spip.php?article24  ; Portuguese language only) provides information and application form on creating and registering companies in STP.

Outward Investment

While STP’s government does not actively promote outward investment, it does not restrict domestic investors from investing abroad.

Policies Toward Foreign Direct Investment

Attracting foreign direct investment remains a critical component of the SAG’s broader Vision 2030 program to diversify an economy overly dependent on oil and to create employment opportunities for a growing youth population.  As such, the SAG seeks foreign investment that explicitly promotes economic development, transfers foreign expertise and technology to Saudi Arabia, creates jobs for Saudi nationals, and increases Saudi’s non-oil exports. The government encourages investment in nearly all economic sectors, with priority given to transportation, health/biotechnology, information and communications technology (ICT), media/entertainment, industry (mining and manufacturing), and energy.

Saudi Arabia’s economic reform programs are opening up new areas for potential investment.  For example, in a country where most public entertainment was once forbidden, the SAG now regularly sponsors and promotes entertainment programming, including live concerts, dance exhibitions, sports competitions, and other public performances.  Significantly, the audiences for many of those events are now gender-mixed, representing a larger consumer base. In addition to the reopening of cinemas in April 2018, the SAG hosted its first Formula E race in December 2018 in Riyadh, as well as the Saudi International Golf Tournament in Jeddah in early 2019 (a leg of the PGA European Tour).

The SAG is proceeding with “economic cities” and new “giga-projects” that are at various stages of development and welcomes foreign investment in them.  These projects are large-scale and self-contained developments in different regions focusing on particular industries, e.g., technology, energy, tourism, and entertainment.  Principal among these projects are:

• Qiddiya, a new, large-scale entertainment, sports, and cultural complex near Riyadh;
• King Abdullah Financial District, a USD 10 billion commercial center development in Riyadh;
• Red Sea Project, a massive tourism development on the western Saudi coast, which aims to create 70,000 jobs and attract one million tourists per year.
• Amaala, a wellness, healthy living, and meditation resort on the Kingdom’s northwest coast, projected to include more than 2,500 luxury hotel rooms and 700 villas.  
• NEOM, a new USD 500 billion project to build a futuristic “independent economic zone” in northwest Saudi Arabia;

The Saudi Arabian General Investment Authority (SAGIA) governs and regulates foreign investment in the Kingdom, issues licenses to prospective investors, and works to foster and promote investment opportunities across the economy.  Established originally as a regulatory agency, SAGIA has increasingly shifted its focus to investment promotion and assistance, offering potential investors detailed guides and a catalogue of current investment opportunities on its website (www.sagia.gov.sa  ).

Despite Saudi Arabia’s overall welcoming approach to foreign investment, some structural impediments remain.  Foreign investment is currently prohibited in 11 sectors, including:

1. Oil exploration, drilling, and production;
2. Catering to military sectors;
3. Security and detective services;
4. Real estate investment in the holy cities, Makkah and Medina;
5. Tourist orientation and guidance services for religious tourism related to Hajj and Umrah;
6. Recruitment offices;
7. Printing and publishing (subject to a variety of exceptions);
8. Certain internationally classified commission agents;
9. Services provided by midwives, nurses, physical therapy services, and quasi-doctoral services;
10. Fisheries; and
11. Poison centers, blood banks, and quarantine services.

(The complete “negative list” can be found at www.sagia.gov.sa  .)  

In addition to the negative list, older laws that remain in effect prohibit or otherwise restrict foreign investment in some economic subsectors not on the list, including some areas of healthcare.  In 2018, Saudi Arabia began to allow foreign ownership in businesses providing services relating to road transportation, real estate brokerage, labor recruitment, and audiovisual display. At the same time, SAGIA has demonstrated some flexibility in approving exceptions to the “negative list” exclusions.  

Foreign investors must also contend with increasingly strict localization requirements in bidding for certain government contracts, labor policy requirements to hire more Saudi nationals (usually at higher wages than expatriate workers), an increasingly restrictive visa policy for foreign workers, and gender segregation in business and social settings (though gender segregation is becoming more relaxed as the SAG introduces socio-economic reforms).  

Additionally, in a bid to bolster non-oil income, the government implemented new taxes and fees in 2017 and early 2018, including significant visa fee increases, higher fines for traffic violations, new fees for certain billboard advertisements, and related measures.  The government implemented a value-added tax (VAT) in January 2018 at a rate of five percent, in addition to excise taxes implemented in June 2017 on cigarettes (at a rate of 100 percent), carbonated drinks (at a rate of 50 percent), and energy drinks (at a rate of 100 percent).  In January 2018, the government also implemented new fees for expatriate employers ranging between USD 80 and USD 107 per employee per month, as well as increasing levies on expatriates with dependents amounting to a USD 54 monthly fee for each dependent. These expatriate fees are scheduled to increase every year through 2020.  On January 1, 2018, the SAG also reduced previous subsidies on electricity and gasoline, which resulted in a doubling of residential electricity rates and an increase in price of gasoline by more than 80 percent.

Limits on Foreign Control and Right to Private Ownership and Establishment

Saudi Arabia fully recognizes rights to private ownership and the establishment of private business.  As outlined above, the SAG excludes foreign investors from some economic sectors and places some limits on foreign control.  With respect to energy, Saudi Arabia’s largest economic sector, foreign firms are barred from investing in the upstream hydrocarbon sector, but the SAG permits foreign investment in the downstream energy sector, including refining and petrochemicals.  There is significant foreign investment in these sectors. ExxonMobil, Shell, China’s Sinopec, and Japan’s Sumitomo Chemical are partners with Saudi Aramco (the SAG’s state-owned oil firm) in domestic refineries. ExxonMobil, Chevron, Shell, and other international investors have joint ventures with Aramco and/or the Saudi Basic Industries Corporation (SABIC) in large-scale petrochemical plants that utilize natural-gas feedstock from Aramco’s operations.  In Saudi Arabia’s Eastern Province, the Dow Chemical Company and Aramco are partners in a USD 20 billion joint venture to construct, own, and operate the world’s largest integrated petrochemical production complex.

With respect to other non-oil natural resources, the national mining company, Ma’aden, has a USD 12 billion joint venture with Alcoa for bauxite mining and aluminum production and a USD 7 billion joint venture with the leading American fertilizer firm Mosaic and SABIC to produce phosphate-based fertilizers.  

Joint ventures almost always take the form of limited-liability partnerships, to which there are some disadvantages.  Foreign partners in service and contracting ventures organized as limited-liability partnerships must pay, in cash or in kind, 100 percent of their contribution to authorized capital.  SAGIA’s authorization is only the first step in setting up such a partnership.

Professionals, including architects, consultants, and consulting engineers, are required to register with, and be certified by, the Ministry of Commerce and Investment (MCI), in accordance with the requirements defined in the Ministry’s Resolution 264 from 1982.  These regulations, in theory, permit the registration of Saudi-foreign joint-venture consulting firms. As part of its WTO accession commitments, Saudi Arabia generally allows consulting firms to establish a local office without a Saudi partner. The requirement that law firms and engineering consulting firms must have a Saudi partner was rescinded in 2017.  Foreign engineering consulting companies must have been incorporated for at least 10 years and have operations in at least four different countries to qualify. However, offices practicing accounting and auditing, architecture, or civil planning, or providing healthcare, dental, or veterinary services must still have a Saudi partner, and the foreign partner’s equity cannot exceed 75 percent of the total investment.  

In recent years, Saudi Arabia has opened additional service markets to foreign investment, including financial and banking services; aircraft maintenance and repair and computer reservation systems; wholesale, retail, and franchise distribution services (traditionally subject to minimum 25 percent local ownership and minimum 20 million Saudi riyal (USD 5.3 million) foreign investment); both basic and value-added telecom services; and investment in the computer and related services sectors.  In 2016, for example, Saudi Arabia formally approved full foreign ownership of retail and wholesale businesses in the Kingdom, thereby removing the former 25 percent local ownership requirement. While some companies have already received licenses under the new rules, the restrictions attached to obtaining full ownership – including a requirement to invest over USD 50 million during the first five years and ensure that 30 percent of all products sold are manufactured locally – have proven difficult to meet and precluded many investors from taking full advantage of the reform.

Other Investment Policy Reviews

Saudi Arabia completed its second WTO trade policy review in late 2015, which included investment policy (https://www.wto.org/english/tratop_e/tpr_e/tp433_e.htm  ).  

Business Facilitation

In addition to applying for a license from SAGIA as described above, foreign and local investors must register a new business via the MCI, which has begun offering online registration services for limited liability companies at:  http://www.mci.gov.sa/en  .  Though users may submit articles of association and apply for a business name within minutes on MCI’s website, final approval from the ministry often takes a week or longer.  Applicants must also complete a number of other steps in order to start a business, including obtaining a municipality (baladia) license for their office premises and registering separately with the Ministry of Labor and Social Development, Chamber of Commerce, Passport Office, Tax Department, and the General Organization for Social Insurance.  From start to finish, registering a business in Saudi Arabia takes a foreign investor on average three to five months from the time an initial SAGIA application is complete, placing the country at 141 of 190 countries in terms of ease of starting a business, according to the World Bank (2019 rankings).  With respect to foreign direct investment, the investment approval by SAGIA is a necessary, but not sufficient, step in establishing an investment in the Kingdom. There are a number of other government ministries, agencies, and departments regulating business operations and ventures.

Saudi officials have stated their intention to attract foreign small- and medium-sized enterprises (SMEs) to the Kingdom.  The SAG established the Small and Medium Enterprises General Authority in 2015 to facilitate the growth of the SME sector. In 2016, the SAG released a new Companies Law designed in part to promote the development of the SME sector.  The law allows one person, rather than the previous minimum of two, to form a corporation, though in very limited cases. It also substantially reduced the minimum capital and number of shareholders required to form a joint stock company (from five previously to two).

Outward Investment

Saudi Arabia does not restrict domestic investors from investing abroad.  Private Saudi citizens, Saudi companies, and SAG entities hold extensive overseas investments.  The SAG is attempting to transform its Public Investment Fund (PIF), traditionally a holding company for government shares in state-controlled enterprises, into a major international investor and sovereign wealth fund.  In 2016, the PIF made its first high-profile international investment by taking a USD 3.5 billion stake in Uber. The PIF has also announced a USD 400 million investment in Magic Leap, a Florida-based company that is developing “mixed reality” technology, and a USD 1 billion investment in Lucid Motors, a California-based electric car company.  Saudi Aramco and SABIC are also major investors in the United States. In 2017, Aramco acquired full ownership of Motiva, the largest refinery in the United States, in Port Arthur, Texas. SABIC has announced a multi-billion dollar joint venture with ExxonMobil in a petrochemical facility in Texas.

Policies Toward Foreign Direct Investment

The Government of Senegal welcomes foreign investment.  Foreign firms are generally able to invest in Senegal free from systematic discrimination in favor of local firms.  Nevertheless, some U.S. and other foreign firms have noted that, in practice, Senegal’s investment environment seems to favor incumbents and insiders – often other foreign firms – at the expense of new market entrants. Common complaints include excessive and inconsistently applied bureaucratic processes, nontransparent judicial processes, and an opaque decision-making process for public tenders and contracts.

Senegal’s Investment Promotion Agency (APIX), www.investinsenegal.com  , provides a range of administrative services to foreign investors. APIX is working to reduce the administrative burden of starting a business in Senegal, although red tape and slow processes continue to hamper investment.  APIX has launched a one-stop shop, the APIX Administrative Procedures Facilitation Center, with the goal of helping businesses perform all business registration procedures with government, local authorities and public institutions within two days. In practice, however, the World Bank Doing Business 2019 estimates that it takes six days to register a firm. In addition to other bureaucratic and documentary requirements, registering a business requires certification of certain documents by a public notary registered in Senegal. Senegalese law provides special preferences to facilitate investment and business operations by medium and small enterprises, including reduced interest rates for Senegalese-owned companies.

The government conducts ongoing dialogue with the private sector through the Conseil Presidentiel de l’Investissement (Presidential Council on Investment, or “CPI”). Among other activities, the CPI sponsors an annual forum at which investors comment on the government’s policies and actions. Another important venue for dialogue is the annual Assises de l’Entreprises sponsored by the Conseil National du Patronat, the national employers’ association. More information can be found at www.cnp.sn.  Senegal does not have a business ombudsman or other official charged with coordinating complaints about the business climate. In practice, investors must often engage directly at the minister level to resolve business climate concerns.

Limits on Foreign Control and Right to Private Ownership and Establishment

There are no barriers to ownership of businesses by foreign investors in most sectors. There are some exceptions for strategic sectors such as water, electricity distribution, and port services where the government and state-owned companies maintain responsibility for most physical infrastructure but allow private companies to provide services. Senegal allows foreign investors equal access to ownership of property and does not impose any general limits on foreign control of investments.  Senegal’s Investment Code includes guarantees for equal treatment of foreign investors including the right to acquire and dispose of property.

The Government of Senegal does some screening of proposed investments, primarily to verify compatibility with the country’s overall development goals and compliance with environmental regulations. If the government is involved in project financing, the Ministry of Finance and Budget will also review financing arrangements to ensure compatibility with budget and debt policies. APIX can facilitate government review of investment proposals and the project approval process.

Other Investment Policy Reviews

On January 15, 2019, the Executive Board of the International Monetary Fund (IMF) completed the seventh review of Senegal’s economic performance under the program supported by a Policy Support Instrument (PSI) approved on June 24, 2015. For more information, see: https://www.imf.org/en/News/Articles/2019/01/18/pr1905-imf-exec-board-completes-7th-review-psi-senegal-concludes-2018-article-iv  .

Business Facilitation

The point of entry for business registration is the website of Senegal’s Investment Promotion Agency (APIX) at www.investinsenegal.com  . In 2018, the World Bank’s Doing Business Index ranked Senegal 64 out of 190 for “Starting a Business,” acknowledging significant improvement on this indicator over the past several years. APIX has launched a one-stop shop, the APIX Administrative Procedures Facilitation Center, with the goal of helping businesses perform all business registration procedures with government, local authorities and public institutions. The World Bank Doing Business 2019 estimates that it takes an average of six days to register a firm, with four separate administrative procedures, some of which require certification by a registered lawyer or notary.

Senegal’s Agency for the Development and Supervision of Small and Medium-sized Enterprises (ADEPME) has launched initiatives to support small and medium-sized enterprises (defined in Senegal as companies with fewer than 50 employees and annual revenues of less than 5 billion CFA (about USD 9 million)). These include tax incentives, grants for capacity building and for feasibility studies, and technical assistance to help firms operating in the informal sector formalize and register. ADEPME has also launched a program to certify the creditworthiness of SMEs, making them eligible for loans at preferential rates.

Outward Investment

The government neither promotes nor restricts outward investment.

Policies towards Foreign Direct Investment

Serbia is open to FDI, and attracting FDI is a priority for the government. Even during its socialist past, Serbia prioritized international commerce and attracted a sizeable international business community. This trend continues, and the Law on Investments extends national treatment to and eliminates discriminatory practices against foreign investors. The law also allows the repatriation of profits and dividends, provides guarantees against expropriation, allows customs duty waivers for equipment imported as capital in kind, and enables foreign investors to qualify for government incentives.

The Government’s investment promotion authority is the Development Agency of Serbia (Razvojna agencija Srbije – RAS: http://ras.gov.rs/  ). RAS offers a wide range of services, including support of direct investments, export promotion, and coordinating the implementation of investment projects. RAS serves as a one-stop-shop for both domestic and international companies. The government maintains a dialogue with businesses through associations such as the Serbian Chamber of Commerce, American Chamber of Commerce in Serbia, Foreign Investors’ Council (FIC), and Serbian Association of Managers (SAM).

Limits on Foreign Control and Right to Private Ownership and Establishment

Foreign and domestic private entities have the right to establish and own businesses, and to engage in all forms of remunerative activity.

For some business activities, licenses are required, e.g. financial institutions must be licensed by the National Bank of Serbia prior to registration. Licensing limitations apply to both domestic and foreign companies active in finance, energy, mining, pharmaceuticals, medical devices, tobacco, arms and military equipment, road transportation, customs processing, land development, electronic communications, auditing, waste management, and production and trade of hazardous chemicals.

Serbian citizens and foreign investors enjoy full private property ownership rights. Private entities can freely establish, acquire, and dispose of interests in business enterprises. By law, private companies compete equally with public enterprises in the market and for access to credit, supplies, licenses, and other aspects of doing business. Serbia does not maintain investment screening or approval mechanisms for inbound foreign investment. U.S. investors are not disadvantaged or singled out by any rules or regulations.

Agribusiness: Foreign citizens and foreign companies are prohibited from owning agricultural land in Serbia. EU citizens are exempt from this ban, as of August 28, 2017, although they may only buy up to two hectares of agricultural land under certain conditions. They must permanently reside in the municipality where the land is located for at least 10 years, practice farming on the land in question for at least three years, and own adequate agriculture machinery and equipment. Foreign ownership restrictions on farmland do not apply to companies registered in Serbia, even if the company is foreign-owned. Unofficial estimates suggest that Serbian subsidiaries of foreign companies own some 20,000 hectares of farmland in the country.

Defense: The Law on Investments adopted in 2015 ended discriminatory practices that prevented foreign companies from establishing companies in the production and trade of arms (for example, the defense industry) or in specific areas of the country. Further liberalization of investment in the defense industry continued via a new Law on the Production and Trade of Arms and Ammunition, adopted in May 2018. The law enables total foreign ownership of up to 49 percent in seven state-owned companies, collectively referred to as the “Defense Industry of Serbia,” as long as no single foreign shareholder exceeds 15 percent ownership. The law also cancels limitations on foreign ownership for arms and ammunition manufacturers.

Other Investment Policy Reviews

Serbia has not conducted an investment policy review through the Organization for Economic Cooperation and Development (OECD), World Trade Organization (WTO), or United Nations Conference on Trade and Development (UNCTAD).

Business Facilitation

According to the World Bank’s 2019 Doing Business report, it takes five procedures and 5.5 days to establish a foreign-owned limited liability company in Serbia. This is faster than the average for Europe and Central Asia. In addition to the procedures required of a domestic company, a foreign parent company establishing a subsidiary in Serbia must translate its corporate documents into Serbian.

Under the Business Registration Law, the Serbian Business Registers Agency (SBRA) oversees company registration. SBRA’s website is available in English at www.apr.gov.rs/home.1435.html  . All entities applying for incorporation with SBRA can use a single application form and are not required to have signatures on applications notarized.

Companies in Serbia can open and maintain bank accounts in foreign currency, although they must also have an account in Serbian dinars (RSD). The minimum capital requirement is symbolic at RSD 100 (less than USD 1) for limited liability companies, rising to RSD 3 million (approximately USD 31,000) for a joint stock company. A single-window registration process enables companies that register with SBRA to obtain a tax registration number (poreski identifikacioni broj – PIB) and health insurance number concurrently with registration. In addition, companies must register employees with the Pension Fund at the Fund’s premises. Since December 2017, the Labor Law requires employers to register new employees before they start their first day at work; previously, the deadline was registration within 15 days of employment. These amendments represent an attempt by the government to decrease the grey labor market by allowing labor inspectors to penalize employers if they find unregistered workers.

Some U.S. companies that have ownership by investment funds have reported challenges opening a local bank account due to concerns over compliance requirements on reporting ultimate beneficial ownership. This comes as Serbia has increased its efforts to comply with international best practices to combat money laundering, and is working to implement new procedures.

Pursuant to the Law on Accounting, companies in Serbia are classified as micro, small, medium, and large, depending on the number of employees, operating revenues, and value of assets.

RAS supports direct investment and promotes exports. It also implements projects aimed at improving competitiveness, supporting economic development, and supporting small-and medium-sized enterprises (SMEs) and entrepreneurs. More information is available at http://ras.gov.rs  .

Serbia’s business facilitation mechanisms provide for equitable treatment of both men and women when a registering company, according to the World Bank’s 2019 Doing Business report. The government has declared 2017-2027 a Decade of Entrepreneurship, with special programs to support entrepreneurship by women.

Outward Investment

The Serbian government neither promotes nor restricts outward direct investment. Restrictions on short-term capital transactions—i.e. portfolio investments—were lifted in April 2018 through amendments to the Law on Foreign Exchange Operations. Prior to this, residents of Serbia were not allowed to purchase foreign short-term securities, and foreigners were not allowed to purchase short-term securities in Serbia. Now, Serbian residents are allowed to purchase foreign short-term securities issued in the European Union, or by international financial organizations. Also, foreigners are now allowed to purchase Serbian short-term securities. There are no restrictions on payments related to long-term securities.

Capital markets are not fully liberalized for individuals. Citizens of Serbia are not allowed to have currency accounts abroad, or to keep accounts abroad, except in exceptional situations listed in the Law on Foreign Exchange Operations (such situations may include work or study abroad).

Policies Towards Foreign Direct Investment

Seychelles has a favorable attitude toward most foreign direct investment, though the GOS reserves certain types of business activities for domestic investors only.  The Seychelles Investment (Economic Activities) Regulations provide a detailed list of 65 types of business in which only Seychellois may invest, available here: https://www.investinseychelles.com/component/edocman/si-71-seychelles-investment-economic-activities/download?Itemid=0  .  The Seychelles Investment Board (SIB) is the national single gateway agency for the promotion and facilitation of investment in Seychelles.  The government’s objective is to promote economic and commercial relationships to diversify the economy, as well as to sustain its tourism and fishing industries, which are currently the main drivers of economic growth.

Limits on Foreign Control and Right to Private Ownership and Establishment

The Seychelles Investment Act of 2010 and Seychelles Investment (Economic Activities) Regulations 2014 govern foreign direct investment (FDI) in Seychelles and are available at:  https://www.investinseychelles.com/investors-guide/policies-guidelines-acts  .  Since the financial crisis of 2008 and the implementation of subsequent IMF reforms, Seychelles has successfully attracted FDI.  According to the Central Bank of Seychelles, gross FDI inflows in 2018 amounted to USD 102 million, down from USD 129 million in 2017.  The Seychelles Investment Board (SIB), the investment promotion agency for Seychelles, advises foreign investors on the laws, regulations, and procedures for their activities in Seychelles.

The Seychelles Investment (Economic Activities) Regulations of 2014 list the economic activities in which only Seychellois are allowed to invest.  Seychelles also places financial limits on foreign equity in certain types of resident companies – these limits are detailed in the Seychelles Investment (Economic Activities) Regulations 2014.  While SIB and the government of Seychelles encourage foreign investors to collaborate with a local partner, there is no formal requirement.

SIB also assists in screening potential investment projects in cooperation with other government agencies.  For a business to operate, investors need to apply for a license from the Seychelles Licensing Authority. The GOS established an Investment Appeal Panel in 2012 to provide an appeal mechanism for investors to challenge GOS decisions regarding investments or proposed investments in Seychelles.  More information is available in the Seychelles Investment Act 2010.

Other Investment Policy Reviews

To date, Seychelles has not conducted an investment policy review through the Organization for Economic Cooperation and Development (OECD) or the United Nations Conference on Trade and Development (UNCTAD).  Seychelles became the 161st World Trade Organization (WTO) member in April 2015.

Business Facilitation

The Government has committed to improving the business environment through measures such as using public-private partnerships (PPPs) to upgrade the country’s infrastructure.  The Government announced a draft PPP law in 2018; as of mid-2019, the National Assembly had not yet voted on the measure. In his 2018 budget speech, the Minister of Finance announced that the Customs Department will be restructured to modernize its activities and facilitate trade.  Seychelles has reviewed its Customs Management Tariff Classification of Goods Regulations and adopted the 2017 version of the Harmonized System of classification in 2018.

Seychelles is ranked 96th in the World Bank’s 2019 Ease of Doing Business Report.  On average, it takes eight days to obtain a certificate of incorporation and 14 days to obtain a business license.  Details on starting a business in Seychelles are available on the World Bank website: http://www.doingbusiness.org/data/exploreeconomies/seychelles.

Information on registering a business in Seychelles can be obtained on the SIB website:   https://www.investinseychelles.com/investors-guide/start-your-business.  Companies, including foreign ones, can register online through the business registration portal:  http://www.sqa.sc/BizRegistration/WebBusinessRegsitration.aspx  .

The Enterprise Seychelles Agency (ESA) is responsible for providing business development services to improve the performance of micro, small, and medium enterprises in Seychelles.  Services provided by ESA include business planning, training, marketing expertise, and identification of business opportunities for SMEs.

Outward Investment

The GOS does not promote or incentivize outward investment.  However, it does not restrict local investors from investing abroad.

Policies Towards Foreign Direct Investment

Singapore maintains a heavily trade-dependent economy characterized by an open investment regime, with some licensing restrictions in the financial services, professional services, and media sectors. The World Bank’s Doing Business 2018 report ranked Singapore as the world’s second-easiest country in which to do business. The 2018 Global Competitiveness Report ranks Singapore as the second -most competitive economy globally. The 2004 USSFTA expanded U.S. market access in goods, services, investment, and government procurement, enhanced intellectual property protection, and provided for cooperation in promoting labor rights and the environment.

The Government of Singapore is committed to maintaining a free market, but it also actively plans Singapore’s economic development, including through a network of government-linked corporations (GLCs). As of February 2019, the top three Singapore-listed GLCs accounted for 13.1 percent of total capitalization of the Singapore Exchange (SGX). Some observers have criticized the dominant role of GLCs in the domestic economy, arguing that they have displaced or suppressed private sector entrepreneurship and investment.

Singapore’s legal framework and public policies are generally favorable toward foreign investors. Foreign investors are not required to enter into joint ventures or cede management control to local interests, and local and foreign investors are subject to the same basic laws. Apart from regulatory requirements in some sectors (reference Limits on National Treatment and Other Restrictions), eligibility for various incentive schemes depends on investment proposals meeting the criteria set by relevant government agencies. Singapore places no restrictions on reinvestment or repatriation of earnings or capital. The judicial system, which includes international arbitration and mediation centers and a commercial court, upholds the sanctity of contracts, and decisions are generally considered to be transparent and effectively enforced.

Singapore’s Economic Development Board (EDB) is the lead investment promotion agency that facilitates foreign investment into Singapore (https:www.edb.gov.sg). EDB undertakes investment promotion and industry development and works with international businesses, both foreign and local, by providing information and facilitating introductions and access to government incentives. The government maintains close engagement with investors through the EDB, which provides feedback to other government agencies to ensure that infrastructure and public services remain efficient and cost-competitive.

Exceptions to Singapore’s general openness to foreign investment exist in telecommunications, broadcasting, the domestic news media, financial services, legal and accounting services, and ports and airports sectors, as well as property ownership. Under Singapore law, articles of incorporation may include shareholding limits that restrict ownership in corporations by foreign persons.

Telecommunications

Since 2000, the Singapore telecommunications market has been fully liberalized. This move has allowed foreign and domestic companies seeking to provide facilities-based (e.g. fixed line or mobile networks) or services-based (e.g. local and international calls and data services over leased networks) telecommunications services to apply for licenses to operate and deploy telecommunication systems and services. Singapore Telecommunications (SingTel) – a GLC that is majority owned by Temasek, a state-owned investment company with the Singapore Minister for Finance as its sole shareholder – faces competition in all market segments. However, its main competitors, M1 and StarHub, are also GLCs. In December 2018, Australian telco TPG Telecom announced a limited, free mobile service to run through 2019. TPG offers only subscriber identity module (SIM) services in Singapore. In the past three years, four Singapore start-ups offering mobile virtual network operator services (MVNOs) have also entered the market. The three established Singapore telecommunications competitors are expected to strengthen their partnerships with the MVNOs in a defensive move against TPG’s entry.

As of November 2018, Singapore has 69 facilities-based operators and 257 services-based (individual) operators offering prepaid services. Since 2007, SingTel has been exempted from dominant licensee obligations for the residential and commercial portions of the retail international telephone services. SingTel is also exempted from dominant licensee obligations for wholesale international telephone services, international managed data, international IP transit, leased satellite bandwidth (VSAT, DVB-IP, satellite TV Downlink, and Satellite IPLC), terrestrial international private leased circuit, and backhaul services. The info-communications Media Development Authority (IMDA) granted Singtel’s exemption after assessing that the market for these services had effective competition.

In April 2017, Singapore held a General Spectrum Auction for mobile airwaves, the largest such auction in 16 years, allocating additional blocks of spectrum to accommodate increasing demand for mobile data services. Singtel, Starhub, M1, and TPG paid a combined total of USUSD 870 million (SUSD 1.15billion) in this heavily-bid auction for additional frequency bands.  To facilitate 5G technology and service trials, IMDA has waived frequency fees for companies interested in conducting 5G trials for equipment testing, research, and assessment of commercial potential.

Singapore’s IMDA operates as both the regulatory agency and the investment promotion agency for the country’s telecommunications sector. IMDA conducts public consultations on major policy reviews and provides decisions on policy changes to relevant companies.

Media

The local free-to-air broadcasting, cable, and newspaper sectors are effectively closed to foreign firms. Section 44 of the Broadcasting Act restricts foreign equity ownership of companies broadcasting in Singapore to 49 percent or less, although the Act does allow for exceptions. Individuals cannot hold shares that would make up more than five percent of the total votes in a broadcasting company without the government’s prior approval. The Newspaper and Printing Presses Act (NPPA) restricts equity ownership (local or foreign) of newspaper companies to less than five percent per shareholder and requires directors to be Singapore citizens. Newspaper companies must issue two classes of shares, ordinary and management, with the latter available only to Singapore citizens or corporations approved by the government. Holders of management shares have an effective veto over selected board decisions.

Singapore regulates content across all major media outlets. The government controls the distribution, importation, and sale of any newspaper and has curtailed or banned the circulation of some foreign publications. Singapore’s leaders have also brought defamation suits against foreign publishers, which have resulted in the foreign publishers issuing apologies and paying damages. Several dozen publications remain prohibited under the Undesirable Publications Act, which restricts the import, sale, and circulation of publications that the government considers contrary to public interest. Examples include pornographic magazines, publications by banned religious groups, and publications containing extremist religious views. Following a routine review in 2015, the then-Media Development Authority lifted a ban on 240 publications, ranging from decades-old anti-colonial and communist material to adult interest content.

Singaporeans generally face few restrictions on the internet. However, the IMDA has blocked various websites containing material that the government deems objectionable, such as pornography and racist and religious hatred sites. Online news websites that report regularly on Singapore and have a significant reach are individually licensed, which requires these sites to submit a bond of USD 40,000 (SGD 50,000) and to adhere to requirements to remove prohibited content within 24 hours of notification from IMDA. Some view this regulation as a way to censor online critics of the government. In December 2018 authorities charged the editor of an online news site with criminal defamation following the publication of a contributor’s allegedly defamatory letter, although the editor had removed the post when advised to do so by the authorities.

In April 2019, the government introduced legislation in Parliament to counter “deliberate online falsehoods.” The legislation, called the Protection from Online Falsehoods and Manipulation Bill, would require websites to run corrections alongside “online falsehoods” and would impose penalties on sites or individuals that spread “misinformation,” as determined by the government.

Pay-Television

MediaCorp TV is the only free-to-air TV broadcaster and is 100 percent owned by the government via Temasek Holdings (Temasek). Local Pay-TV providers are StarHub and Singtel, which are both partially owned by Temasek or its subsidiaries. Local free-to-air radio broadcasters are MediaCorp Radio Singapore, which is also owned by Temasek Holdings, SPH Radio, owned by the publically-held Singapore Press Holdings, and So Drama! Entertainment, owned by the Singapore Ministry of Defense. BBC World Services is the only foreign free-to-air radio broadcaster in Singapore.

To rectify the high degree of content fragmentation in the Singapore pay-TV market, and shift the focus of competition from an exclusivity-centric strategy to other aspects such as service differentiation and competitive packaging, the MDA implemented cross-carriage measures in 2011 requiring pay-TV companies designated by MDA to be Receiving Qualified Licensees (RQL) – currently SingTel and StarHub – to cross-carry content subject to exclusive carriage provisions. Correspondingly, Supplying Qualified Licensees (SQLs) with an exclusive contract for a channel are required to carry that content on other RQL pay-TV companies. In February 2019, the IMDA proposed to continue the current cross-carriage measures. The Motion Picture Association of America (MPAA) has expressed concern that this measure restricts copyright exclusivity. Content providers consider the measures an unnecessary interference in a competitive market that denies content holders the ability to negotiate freely in the marketplace, and an interference with their ability to manage and protect their intellectual property. More common content is now available across the different pay-TV platforms, and the operators are beginning to differentiate themselves by originating their own content, offering subscribed content online via PCs and tablet computers, and delivering content via fiber networks.

Streaming services have entered the market, which MPAA has found leads to a significant reduction in intellectual property infringements. StarHub and Singtel have both partnered with multiple content providers, including U.S. companies, to provide streaming content in Singapore and around the region.

Banking and Finance

The Monetary Authority of Singapore (MAS) regulates all banking activities as provided for under the Banking Act. Singapore maintains legal distinctions between foreign and local banks and the type of license (i.e. full service, wholesale, and offshore banks) held by foreign commercial banks. As of March 2019, 28 foreign full-service licensees and 97 wholesale banks operated in Singapore. An additional 27 merchant banks are licensed to conduct corporate finance, investment banking, and other fee-based activities. Offshore and wholesale banks are not allowed to operate Singapore dollar retail banking activities. Only Full Banks and “Qualifying Full Banks” (QFBs) can operate Singapore dollar retail banking activities but are subject to restrictions on the number of places of business, ATMs, and ATM networks. Additional QFB licenses may be granted to a subset of full banks, which provide greater branching privileges and greater access to the retail market than other full banks. As of March 2019, there are ten banks operating QFB licenses.

Except in retail banking, Singapore laws do not distinguish operationally between foreign and domestic banks. Currently, all banks in Singapore are required to maintain a Domestic Banking Unit (DBU) and an Asian Currency Unit (ACU), separating international and domestic banking operations from each other. Transactions in Singapore dollars can be booked only in the DBU whereas transactions in foreign currency are typically booked in the ACU. The ACU is an accounting unit that the banks use to book all their foreign currency transactions conducted in the Asian Dollar Market (ADM). This enables additional prudential requirements to be imposed on banks’ domestic businesses in Singapore, while also avoiding undue restrictions on the offshore activities of banks. Following public consultations, MAS initiated a 30-month implementation timeline from February 2017 for the removal of the DBU-ACU divide, which will be aligned with the revisions made to MAS 610 (Submission of Statistics and Returns).

The government initiated a banking liberalization program in 1999 to ease restrictions on foreign banks and has supplemented this with phased-in provisions under the USSFTA, including removal of a 40 percent ceiling on foreign ownership of local banks and a 20 percent aggregate foreign shareholding limit on finance companies. The Minister in charge of the Monetary Authority of Singapore must approve the merger or takeover of a local bank or financial holding company, as well as the acquisition of voting shares in such institutions above specific thresholds of five percent, 12 percent, or 20 percent of shareholdings.

Although Singapore’s government has lifted the formal ceilings on foreign ownership of local banks and finance companies, the approval of controllers of local banks ensures that this control rests with individuals or groups whose interests are aligned with the long-term interests of the Singapore economy and Singapore’s national interests. Of the 29 full-service licenses granted to foreign banks, three have gone to U.S. banks. U.S. financial institutions enjoy phased-in benefits under the USSFTA. Since 2006, U.S.-licensed full-service banks that are also QFBs, which is only one as of March 2019, have been able to operate at an unlimited number of locations (branches or off-premises ATMs) versus 25 for non-U.S. full-service foreign banks with QFB status. U.S. and foreign full-service banks with QFB status can freely relocate existing branches and share ATMs among themselves. They can also provide electronic funds transfer and point-of-sale debit services and accept services related to Singapore’s compulsory pension fund. In 2007, Singapore lifted the quota on new licenses for U.S. wholesale banks.

Locally and non-locally incorporated subsidiaries of U.S. full-service banks with QFB status can apply for access to local ATM networks. However, no U.S. bank has come to a commercial agreement to gain such access. Despite liberalization, U.S. and other foreign banks in the domestic retail-banking sector have reported to still face barriers. Under the enhanced QFB program launched in 2012, MAS requires QFBs it deems systemically significant to incorporate locally. If those locally incorporated entities are deemed “significantly rooted” in Singapore, with a majority of Singaporean or permanent resident members, Singapore may grant approval for an additional 25 places of business, of which up to ten may be branches. Local retail banks do not face similar constraints on customer service locations or access to the local ATM network. As noted above, U.S. banks are not subject to quotas on service locations under the terms of the USSFTA.  Holders of credit cards issued locally by U.S. banks incorporated in Singapore cannot access their accounts through the local ATM networks. They are also unable to access their accounts for cash withdrawals, transfers, or bill payments at ATMs operated by banks other than those operated by their own bank or at foreign banks’ shared ATM network. Nevertheless, full-service foreign banks have made significant inroads in other retail banking areas, with substantial market share in products like credit cards and personal and housing loans.

In January 2019, MAS announced the passage of the Payment Services Bill after soliciting public feedback for design of the bill. The bill requires more payment services such as digital payment tokens, dealing in virtual currency and merchant acquisition, to be licensed and regulated by MAS. It also limits the amount of money stored in personal mobile wallets and how much can be transferred to another user’s bank accounts in a year. Regulations are tailored to the type of activity preformed and address issues related to terrorism financing, money laundering, and cyber risks.

Singapore has no trading restrictions on foreign-owned stockbrokers. There is no cap on the aggregate investment by foreigners regarding the paid-up capital of dealers that are members of the SGX. Direct registration of foreign mutual funds is allowed provided MAS approves the prospectus and the fund. The USSFTA has relaxed conditions foreign asset managers must meet in order to offer products under the government-managed compulsory pension fund (Central Provident Fund Investment Scheme).

Legal Services

The Legal Services Regulatory Authority (LSRA) under the Ministry of Law oversees the regulation, licensing, and compliance of all law practice entities and the registration of foreign lawyers in Singapore. Foreign law firms with a licensed Foreign Law Practice (FLP) may offer the full range of legal services in foreign law and international law but cannot practice Singapore law except in the context of international commercial arbitration. U.S. and foreign attorneys are allowed to represent parties in arbitration without the need for a Singapore attorney to be present. To offer Singapore law, FLPs require either a Qualifying Foreign Law Practice (QFLP) license, a Joint Law Venture (JLV) with a Singapore Law Practice (SLP), or a Formal Law Alliance (FLA) with a SLP. The vast majority of Singapore’s 127 foreign law firms operate FLPs, while QFLPs and JLVs each number in the single digits.

The QFLP licenses allow foreign law firms to practice in permitted areas of Singapore law, which excludes constitutional and administrative law, conveyancing, criminal law, family law, succession law, and trust law. As of March 2019 there are nine QFLPs in Singapore, including five U.S. firms. In January 2019, the Ministry of Law announced the deferral to 2020 of the decision to renew the licenses of five QFLPs, which were set to expire in 2019 so that the government can better assess their contribution to Singapore along with the other four firms whose licenses were also extended to 2020. Decisions on the renewal considers the firms’ quantitative and qualitative performance such as the value of work that the Singapore office will generate, the extent to which the Singapore office will function as the firm’s headquarter for the region, the firm’s contributions to Singapore, and the firm’s proposal for the new license period.

A Joint Law Venture (JLV) is a collaboration between a Foreign Law Practice and Singapore Law Practice, which may be constituted as a partnership or company. The Director of Legal Services in the Legal Services Regulatory Authority (LSRA) will consider all the relevant circumstances including the proposed structure and its overall suitability to achieve the objectives for which JLV are permitted to be established. There is no clear indication on the percentage of shares that each JLV partner may hold in the JLV.

Law degrees from designated U.S., British, Australian, and New Zealand universities are recognized for purposes of admission to practice law in Singapore. Under the USSFTA, Singapore recognizes law degrees from Harvard University, Columbia University, New York University, and the University of Michigan. Singapore will admit to the Singapore Bar law school graduates of those designated universities who are ranked among the top 70 percent of their graduating class or have obtained lower-second class honors (under the British system).

Engineering and Architectural Services

Engineering and architectural firms can be 100 percent foreign-owned. Engineers and architects are required to register with the Professional Engineers Board and the Board of Architects, respectively, to practice in Singapore. All applicants (both local and foreign) must have at least four years of practical experience in engineering or two years of practical training in architectural works, and pass written and oral examinations set by the respective Board.

Accounting and Tax Services

Major international accounting firms operate in Singapore. Registration as a public accountant under the Accountants Act is required to provide public accountancy services (i.e. the audit and reporting on financial statements and other acts that are required by any written law to be done by a public accountant) in Singapore, although registration as a public accountant is not required to provide other accountancy services, such as accounting, tax, and corporate advisory work. All accounting entities that provide public accountancy services must be approved under the Accountants Act and their supply of public accountancy services in Singapore must be under the control and management of partners or directors who are public accountants ordinarily resident in Singapore. In addition, if the accounting entity firm has two partners or directors, at least one of them must be a public accountant. If the business entity has more than two partners or directors, two-thirds of the partners or directors must be public accountants.

Energy

Singapore further liberalized its gas market with the amendment of the Gas Act and implementation of a Gas Network Code in 2008, which were designed to give gas retailers and importers direct access to the onshore gas pipeline infrastructure. However, key parts of the local gas market, such as town gas retailing and gas transportation through pipelines remain controlled by incumbent Singaporean firms. Singapore has sought to grow its supply of Liquefied Natural Gas (LNG), and BG Singapore Gas Marketing Pte Ltd (acquired by Royal Dutch Shell in February 2016) was appointed in 2008 as the first aggregator with an exclusive franchise to import LNG to be sold in its re-gasified form in Singapore. In October 2017, Shell eastern Trading Pte Ltd and Pavilion Gase Pte Ltd were awarded import licenses to market up to 1 Million Tonnes Per Annum (Mtpa) or for three years, whichever occurs first. This also marked the conclusion of the first exclusive franchise awarded to BG Singapore Gas Marketing Pte Ltd.

In November 2018, Singapore began a progressive launch of an Open Electricity Market that will be completed in May 2019. Over 1.4 million households and business accounts will have the option of buying electricity from a retailer licensed by the Energy Market Authority (EMA). To participate in the Open Electricity Market licensed retailers must satisfy additional credit, technical, and financial requirements set by EMA in order to sell electricity to households and small businesses. There are two types of electricity retailers: Market Participant Retailers (MPRs) and Non-Market Participant Retailers (NMPRs). MPRs have to be registered with the Energy Market Company (EMC) to purchase electricity from the National Electricity Market of Singapore (NEMS) to sell to contestable consumers. NMPRs need not register with EMC to participate in the NEMS since they will purchase electricity indirectly from the NEMS through the Market Support Services Licensee (MSSL). As of April 2019, there were 13 firms in the market, including foreign and local.

Limits on Foreign Control and Right to Private Ownership and Establishment

Foreign and local entities may readily establish, operate, and dispose of their own enterprises in Singapore subject to certain requirements. A foreigner who wants to incorporate a company in Singapore is required to appoint a locally resident director; foreigners may continue to reside outside of Singapore.  Foreigners who wish to incorporate a company and be present in Singapore to manage its operations are strongly advised to seek approval from the Ministry of Manpower (MOM) before incorporation. Except for representative offices (where foreign firms maintain a local representative but do not conduct commercial transactions in Singapore) there are no restrictions on carrying out remunerative activities. As of October 2017, foreign companies may seek to transfer their place of registration and be registered as companies limited by shares in Singapore under Part XA (Transfer of Registration) of the Companies Act. Such transferred foreign companies are subject to the same requirements as locally-incorporated companies.

All businesses in Singapore must be registered with the Accounting and Corporate Regulatory Authority (ACRA). Foreign investors can operate their businesses in one of the following forms: sole proprietorship, partnership, limited partnership, limited liability partnership, incorporated company, foreign company branch or representative office. Stricter disclosure requirements were passed in March 2017 requiring foreign company branches registered in Singapore to maintain public registers of their members, while locally incorporated companies. Foreign company branches registered in Singapore as well as limited liability partnerships will be required to maintain registers of controllers (generally defined as individuals or legal entities with more than 25 percent interest or control of the companies and foreign companies) aimed at preventing money laundering.

While there is currently no cross-sectional screening process for foreign investments, investors are required to seek approval from specific sector regulators for investments into certain firms. These sectors include energy, telecommunications, broadcasting, the domestic news media, financial services, legal services, public accounting services, ports and airports, and property ownership. Under Singapore law, Articles of Incorporation may include shareholding limits that restrict ownership in corporations by foreign persons.

Singapore does not maintain an investment screening mechanism for inbound foreign investment. There are no reports of U.S. investors being especially disadvantaged or singled out relative to other foreign investors.

Other Investment Policy Reviews

Singapore underwent a trade policy review with the World Trade Organization (WTO) in July 2016. No major policy recommendations were raised. This was the country’s only policy review in the past three years. (https://www.wto.org/english/tratop_e/tpr_e/tp443_e.htm)

The OECD and United Nations Industrial Development Organization (UNIDO) released a joint report in February 2019 on the ASEAN-OECD Investment Program. The Program aims to foster dialogue and experience sharing between OECD countries and Southeast Asian economies on issues relating to the business and investment climate. It is implemented through regional policy dialogue, country investment policy reviews, and training seminars. (http://www.oecd.org/countries/singapore/seasia.htm  )

The OECD released a Transfer Pricing Country Profile for Singapore in June 2018. The country profiles focus on countries’ domestic legislation regarding key transfer pricing principles, including the arm’s length principle, transfer pricing methods, comparability analysis, intangible property, intra-group services, cost contribution agreements, transfer pricing documentation, administrative approaches to avoiding and resolving disputes, safe harbors and other implementation measures. (http://www.oecd.org/countries/singapore/transfer-pricing-country-profile-singapore.pdf )

The OECD released a peer review report in March 2018 on Singapore’s implementation of internationally agreed tax standards under Action Plan 14 of the base erosion and profit shifting (BEPS) project. Action 14 strengthens the effectiveness and efficiency of the mutual agreement procedure, a cross-border tax dispute resolution mechanism.

The UNCTAD has not conducted an IPR of Singapore.

Business Facilitation

Singapore’s online business registration process is clear and efficient and allows foreign companies to register branches. All businesses must be registered with the Accounting & Corporate Regulatory Authority (ACRA) through Bizfile, its online registration and information retrieval portal (http://bizfile.gov.sg  ), including any individual, firm or corporation that carries out business for a foreign company. Applications are typically processed immediately after the application fee is paid, but may take between 14 days to two months if the application is referred to another agency for approval or review. The process of establishing a foreign-owned limited liability company in Singapore is among the fastest of the countries surveyed by IAB.

ACRA provides a single window for business registration. However, additional regulatory approvals (e.g. licensing or visa requirements) are obtained via individual applications to the respective Ministries or Statutory Boards. Additional information and business support on registering a branch of a foreign company is available through the EDB (https://www.edb.gov.sg/en/how-we-help/setting-up.html  ). Furthermore, GuideMeSingapore by corporate services firm Hawskford provides details on setting up a business in Singapore (https://www.guidemesingapore.com/).

Foreign companies may lease or buy privately or publicly held land in Singapore, though there are some restrictions on foreign ownership of property. Foreign companies are free to open and maintain bank accounts in foreign currency. There is no minimum paid-in capital requirement, but at least one subscriber share must be issued for valid consideration at incorporation.

At GER (ger.co), Singapore’s online business registration process scores 7/10 in Online Single Windows (https://www.bizfile.gov.sg/).

Business facilitation processes provide for fair and equal treatment of women and minorities, and there are no mechanisms that provide special assistance to women and minorities.

Outward Investment

Singapore places no restrictions on domestic investors investing abroad. The government promotes outward investment through Enterprise Singapore, a statutory board under the Ministry of Trade and Industry (MTI). It provides market information, business contacts, and financial assistance and grants for internationalizing companies. While it has a global reach and runs overseas centers in major cities across the world, a large share of its overseas centers are located in major trading and investment partners and regional markets like China, India, and ASEAN.

Slovakia is one of the most open economies in the EU.  The government’s overall attitude toward foreign direct investment (FDI) is positive, and the government does not limit or discriminate against foreign investors.  FDI plays an important role in the country’s economy, with major foreign investments in manufacturing and industry, banking, information and communication technologies (ICT), and Business Service Centers, where U.S. companies have a significant presence.

Slovakia’s assets, including skilled labor, EU and Eurozone membership, and location at the crossroads of Europe, have attracted a significant U.S. commercial presence, including Hewlett-Packard, Cisco, IBM, Dell, AT&T, Oracle, Accenture, Whirlpool, Adient, Amazon, GlobalLogic, and U.S. Steel.

The government supports foreign investors and offers investment incentives based on specific criteria, usually delivered in the form of tax allowances, or grants to support employment, regional development, and training.  The Act on Regional Investment Aid (57/2018) specifies eligibility criteria. Section four of this report covers investment incentives in more detail.

According to the National Bank of Slovakia, in 2017, inward FDI flows to Slovakia reached EUR 2 billion, and inward FDI stock was EUR 46.5 billion.  EU member states are the largest foreign investors in Slovakia, including the Netherlands, Austria, the Czech Republic, Luxemburg, and Germany. South Korea remains an important investor among non-EU countries, given its importance in global automotive supply chains.

Improving the business climate is an inter-agency effort involving a number of state institutions and other actors.  The Ministry of Economy coordinates efforts to improve the business environment, innovation intensity, and support for least-developed regions.  Within the Ministry of Economy, the Slovak Investment and Trade Development Agency (SARIO) is responsible for identifying and advising potential investors on the Slovak political, business, and investment climate.  The National Investment Plan 2018-2030, drafted by the Deputy Prime Minister’s Office for Investments and Digitalization, focuses on investment programs in the areas of green economy, including transport, ICT, energy, green infrastructure, waste management, climate change mitigation, R&D and innovation, healthcare, and education.

Limits on Foreign Control and Right to Private Ownership and Establishment

Foreign and domestic private entities have the right to establish and own business enterprises and engage in all forms of remunerative activity in Slovakia (Commercial Code, 98/1991   Coll.).  Businesses can contract directly with foreign entities.  Private enterprises are free to establish, acquire, and dispose of business interests, but must pay all Slovak obligations of liquidated companies before transferring any remaining funds out of Slovakia.  Non-residents from the EU and OECD member countries can acquire real estate for commercial purposes.

Slovakia has no formal performance requirements for establishing, maintaining, or expanding foreign investments.  Large-scale privatizations are possible via direct sale or public auction.

The Slovak government treats foreign entities established in Slovakia in the same manner as domestic entities, and foreign entities face no impediments in participating in R&D programs financed and/or subsidized by the Slovak government.  R&D spending is 100 percent tax deductible, set to increase to 150 percent in 2019, and 200 percent in 2020. According to the OECD, total R&D investment in 2016 represented just 0.8 percent of GDP (compared to the OECD average of 2.3 percent).  A large percentage of R&D spending is financed though EU funds, and private R&D intensity remains low at 0.4 percent of GDP. The European Commission continues to criticize the persistent lack of transparency in allocating EU funds.

The Slovak government holds stakes in a number of energy companies.  It has historically been less open to private investment in energy assets that it considers to be in the national security interest, and has even expressed interest in increasing state ownership of some key energy assets.  There are no domestic ownership requirements for telecommunications and broadcast licenses. The Act on Civil Air Transport (143/1998 Coll.) sets out rules for foreign operators seeking to operate in Slovakia.

There are no formal requirements to approve FDI, though the Government ultimately approves investment incentives.  If investment incentives apply, the Economy Ministry manages the associated legislative process. The Act on Regional Investment Aid (57/2018) specifies eligibility requirements.

Please consult the following websites for more information:

Office of Deputy Prime Minister:  https://www.vicepremier.gov.sk/index.html  

R&D Tax-Deductible:  https://superodpocet.sk/  

Other Investment Policy Reviews

The OECD produced a 2019 Economic Forecast Summary for Slovakia: http://www.oecd.org/economy/surveys/Slovak-Republic-2019-OECD-economic-survey-overview.pdf 

The European Commission published its regular Country Report – Slovakia 2019, addressing various aspects of the Slovak economy:  https://ec.europa.eu/info/sites/info/files/file_import/2019-european-semester-country-report-slovakia_en_0.pdf 

The World Trade Organization’s data on Slovakia is available here: https://www.wto.org/english/thewto_e/countries_e/slovak_republic_e.htm  

Business Facilitation

According to the World Bank’s Doing Business 2019 report, Slovakia ranks 127th out of 190 countries surveyed on the ease of starting a business (down from 83rd in the 2018 edition).  It takes around 26.5 days to start a business in Slovakia (versus 12.5 days in 2018), and involves eight procedures.  Slovak officials commented that the drop in ranking was due to a lack of consideration of all relevant country specific indicators and did not indicate a deterioration in the business climate.

The Central Government Portal “slovensko.sk” provides useful information on e-Government services in the area of starting and running a business, citizenship, justice, registering vehicles, social security, etc.  Checklists of procedures necessary for registrations, applications for permits, etc., are currently available on websites of individual institutions, and the Economy Ministry is working on streamlining the information into one common platform.

Please consult the following websites for more information:

• Central Government Portal:  https://www.slovensko.sk/en/title/  
• Commercial Register:  http://www.orsr.sk/Default.asp?lan=en  
• Slovak Business Agency:  http://www.sbagency.sk/en/national-business-center#.WrzvnNtMS9I  
• Slovak Investment and Trade Development Agency:  https://www.sario.sk/en  
• World Bank Doing Business 2019:
  http://www.doingbusiness.org/content/dam/
  doingBusiness/media/Profiles/Regional/DB2019/EU.pdf 
  http://www.doingbusiness.org/en/reports/subnational-reports/eu-croatia-czechrepublic-portugal-slovakia  

Outward Investment

Several state agencies share responsibilities for supporting investment (inward and outward) and trade.  SARIO is officially responsible for export facilitation and attracting investment. The Slovak Export-Import Bank (EXIM BANKA) supports exports and outward investments with financial instruments to reduce risks related to insurance, credit, guarantee, and financial activities; it assists both large companies and small- and medium-sized enterprises (SMEs), and is the only institution in Slovakia authorized to provide export and outward investment-related government assistance.  The Ministry for Foreign and European Affairs runs a Business Center that provides services in the area of export and investment opportunities. Slovakia’s diplomatic missions, the Ministry of Finance’s Slovak Guarantee and Development Bank, and the Deputy Prime Minister’s Office for Investments and Digitalization also play a role in facilitating external economic relations.

The majority of Slovak exports go to fellow EU countries.  Slovak companies have made limited outward foreign direct investments.

Policies Toward Foreign Direct Investment

Although Slovenia has no formal business roundtable or foreign investment ombudsman, the Slovenian Public Agency for the Promotion of Entrepreneurship, Innovation, Development, Investment and Tourism (SPIRIT) promotes FDI and advocates for foreign investors in Slovenia.  Its mission is to enhance Slovenia’s economic competitiveness through technical and financial assistance to entrepreneurs, businesses, and investors.

Foreign companies conducting business in Slovenia have the same rights, obligations, and responsibilities as domestic companies.  The principles of commercial enterprise, which include free operation and national treatment, apply to the operations of foreign companies as well.  The Law on Commercial Companies and the Law on Foreign Transactions guarantee their basic rights.

According to SPIRIT’s annual survey on foreign investors’ perceptions of Slovenia’s business environment, investors cite the high quality of Slovenia’s labor force as the deciding factor in choosing the country as an investment destination, followed by widespread knowledge of foreign languages, employees’ technical expertise, innovation potential, and strategic geographic position offering easy access to EU and Balkan markets.

While generally welcoming greenfield investments, Slovenia presents a number of informal barriers that challenge foreign investors.  According to SPIRIT’s survey, the most significant disincentives to FDI are high taxes, high labor costs, lack of payment discipline, an inefficient judicial system, difficulties in firing employees, and excessive bureaucracy.

Foreign companies doing business in Slovenia and the local American Chamber of Commerce have also cited additional factors that adversely affect the local investment climate, including the lack of a high-level FDI promotion strategy, a sizable judicial backlog, difficulties in obtaining building permits, labor market rigidity, and disproportionately high social contributions and personal income taxes coupled with excessive administrative tax burdens.  Businesses have also reported a lack of transparency in public procurement, unnecessarily complex and time-consuming bureaucracy, frequent changes in regulation, relatively high real estate prices, and confusion over lead responsibility or jurisdiction regarding foreign investment among government agencies.

Limits on Foreign Control and Right to Private Ownership and Establishment

Both foreign and domestic private entities have the right to establish and own business enterprises and engage in different forms of remunerative activity.  Slovenia has relatively few formal limits on foreign ownership or control.

Sector-specific restrictions:

• Professional services:  There are limits on banking and investment services, private pensions, insurance services, asset management services, and settlement, clearing, custodial, and depository services provided in Slovenia by companies headquartered in non-EU countries.  Companies from non-EU countries can operate freely only through an affiliate with a license granted by an appropriate Slovenian or EU institution.
• Gaming:  There is a 20 percent cap on private ownership of individual companies.
• Air transport:  Aircraft registration is only possible for aircraft owned by Slovenian or EU nationals or companies controlled by such entities.  Companies controlled by Slovenian nationals or carriers complying with EU regulations on ownership and control are the only entities eligible for Air Operator’s Certificates (AOC) for performing airline services.
• Maritime transport:  The law forbids majority ownership by non-EU residents of a Slovenian-flagged maritime vessel unless the operator is a Slovenian or other EU national.

Slovenia has an open economy, and no screening or review process is necessary for FDI.

Other Investment Policy Reviews

Slovenia underwent an OECD Investment Policy Review   and a WTO Trade Policy Review   in 2002.  The Economist Intelligence Unit and World Bank’s “Doing Business 2019” provide current economic profiles of Slovenia.

Business Facilitation

Individuals or businesses may adopt a variety of different legal and organizational forms to conduct economic activities.  Businesses most commonly incorporate legally as limited liability companies (LLC or d.o.o.) and public limited companies (PLC or d.d.).

Non-residents of the Republic of Slovenia must obtain a Slovenian tax number   before beginning the process of establishing a business.  Slovenia’s Companies Act, which is fully harmonized with EU legislation, regulates the establishment, management, and organization of companies.

Generally, bureaucratic procedures and practices for foreign investors wishing to start a business in Slovenia are sufficiently streamlined and transparent.  Start-up costs for businesses are among the lowest in the EU. In order to establish a business in Slovenia, a foreign investor must produce capital of at least EUR 7,500 (USD 8,444) for a limited liability company and EUR 25,000 (USD 28,147) for a stock company.  The investor must also establish a business address and file appropriate documentation with the courts. The entire process usually takes three weeks to one month, but may take longer in Ljubljana due to court backlogs.

Individuals or legal entities may establish businesses through a notary, one of several VEM (Vse na Enem Mestu or “all in one place”) point offices designated by the Slovenian government, or online.  A list of VEM points is available at http://www.podjetniski-portal.si/ustanavljam-podjetje/vem-tocke/seznam-vstopnih-tock-vem  .

More information on how to invest and register a business in Slovenia is available at http://www.investslovenia.org/business-environment/establishing-a-company/   and http://www.eugo.gov.si/en/starting/business-registration/  .

Outward Investment

Slovenia does not restrict domestic investors from investing abroad, nor are there any incentives for outward investments.  The majority of Slovenia’s outward investments are in the Western Balkans. Croatia is the most popular destination for Slovenian outward investment, constituting 30.7 percent of Slovenia’s investments abroad, followed by Serbia (16 percent), Bosnia and Herzegovina (eight percent), and North Macedonia (6.1 percent).