HomeReportsInvestment Climate Statements...Custom Report - 5f7b78aa4d hide Investment Climate Statements Custom Report Excerpts: Kenya, Kyrgyzstan, Liechtenstein, Mali, Mauritius, Micronesia, Nicaragua, Saudi Arabia +4 more Bureau of Economic and Business Affairs Sort by Country Sort by Section In this section / Kenya 1. Openness To, and Restrictions Upon, Foreign Investment Kyrgyz Republic 1. Openness To, and Restrictions Upon, Foreign Investment Mali 1. Openness To, and Restrictions Upon, Foreign Investment Mauritius 1. Openness To, and Restrictions Upon, Foreign Investment Micronesia 1. Openness To, and Restrictions Upon, Foreign Investment Nicaragua 1. Openness To, and Restrictions Upon, Foreign Investment Saudi Arabia 1. Openness To, and Restrictions Upon, Foreign Investment Sierra Leone 1. Openness To, and Restrictions Upon, Foreign Investment Switzerland and Liechtenstein 1. Openness To, and Restrictions Upon, Foreign Investment Tunisia 1. Openness To, and Restrictions Upon, Foreign Investment Ukraine 1. Openness To, and Restrictions Upon, Foreign Investment Kenya 1. Openness To, and Restrictions Upon, Foreign Investment Policies Towards Foreign Direct Investment Kenya has enjoyed a steadily improving environment for foreign direct investment (FDI). Foreign investors seeking to establish a presence in Kenya generally receive the same treatment as local investors, and multinational companies make up a large percentage of Kenya’s industrial sector. The government’s export promotion programs do not distinguish between goods produced by local or foreign-owned firms. The major regulations governing FDI are found in the Investment Promotion Act (2004). Other important documents that provide the legal framework for FDI include the 2010 Constitution of Kenya, the Companies Ordinance, the Private Public Partnership Act (2013), the Foreign Investment Protection Act (1990), and the Companies Act (2015). GOK membership in the World Bank’s Multilateral Investment Guarantee Agency (MIGA) provides an opportunity to insure FDI against non-commercial risk. In November 2019, KenInvest launched the Kenya Investment Policy (KIP) and the County Investment Handbook (CIH) (http://www.invest.go.ke/publications/) which aim to increase foreign direct investment in the country. The investment policy intends to guide laws being drafted to promote and facilitate investments in Kenya. The Central Bank has successfully maintained macroeconomic stability with relatively low inflation and stable exchange rates. The National Treasury is increasingly focused on efforts to ensure prudent debt management. Kenya puts significant effort into assuring the health and growth of its tourism industry. To strengthen Kenya’s manufacturing capacity, the government offers incentives to produce goods for export. Investment Promotion Agency Kenya Investment Authority (KenInvest), the country’s official investment promotion agency, is viewed favorably by international investors (http://www.invest.go.ke/). KenInvest’s mandate is to promote and facilitate investment by assisting investors in obtaining the licenses necessary to invest and by providing other assistance and incentives to facilitate smoother operations. To help investors navigate local regulations, KenInvest has developed an online database known as eRegulations, designed to provide investors and entrepreneurs with full transparency on Kenya’s investment-related regulations and procedures (https://eregulations.invest.go.ke/?l=en ). KenInvest is part of the National Business and Economic Response of the GOK and has been instrumental in assessing and relaying information about the private sector effects of Covid-19 to inform policy measures during the pandemic. The agency is also tracking post-Covid-19 investment sectors. The GOK prioritizes investment retention and maintains an ongoing dialogue with investors. All proposed legislation must pass through a period of public consultation in which investors have an opportunity to offer feedback. Private sector representatives can serve as board members on Kenya’s state-owned enterprises. Since 2013, the Kenya Private Sector Alliance (KEPSA), the apex private sector business association, has had bi-annual round table meetings with President Kenyatta and his cabinet. Investors’ concerns are considered by a Cabinet committee on the ease of doing business, chaired by President Kenyatta. The American Chamber of Commerce has also taken an increasingly active role in engaging the GOK on Kenya’s business environment, often providing a forum for dialogue. Limits on Foreign Control and Right to Private Ownership and Establishment The government provides the right for foreign and domestic private entities to establish and own business enterprises and engage in all forms of remunerative activity. In an effort to encourage foreign investment, the GOK in 2015 repealed regulations that imposed a 75 percent foreign ownership limitation for firms listed on the Nairobi Securities Exchange, allowing such firms to be 100 percent foreign-owned. Also in 2015, the government established regulations requiring Kenyans own at least 15 percent of the share capital of derivatives exchanges, through which derivatives such as options and futures can be traded. Kenya considered imposing “local content” requirements on foreign investments under the Companies Act (2015), which initially contained language requiring all foreign companies to demonstrate at least 30 percent of shareholding by Kenyan citizens by birth. United States business associations, however, raised concerns over the bill, pointing to its lack of clarity and the possibility such measures could run afoul of Kenya’s commitments under the WTO. After the U.S. government also raised the issue with the Kenyan government, the clause was repealed. Kenya’s National Information and Communications Technology (ICT) policy guidelines, published in August 2020, increase the requirement for Kenyan ownership in foreign companies providing ICT services from 20% to 30%, and broadens its applicability within the telecommunications, postal, courier, and broadcasting industries. The foreign entities will have 3 years to comply with the increased local equity participation rule. The Mining Act (2016) restricts foreign participation in the mining sector and reserves the acquisition of mineral rights to Kenyan companies, requiring 60 percent Kenyan ownership of mineral dealerships and artisanal mining companies. The Private Security Regulations Act (2016) restricts foreign participation in the private security sector by requiring that at least 25 percent of shares in private security firms be held by Kenyans. The National Construction Authority Act (2011) imposes local content restrictions on “foreign contractors,” defined as companies incorporated outside Kenya or with more than 50 percent ownership by non-Kenyan citizens. The act requires foreign contractors to enter into subcontracts or joint ventures assuring that at least 30 percent of the contract work is done by local firms. Regulations implementing these requirements remain in process. The Kenya Insurance Act (2010) restricts foreign capital investment to two-thirds, with no single person controlling more than 25 percent of an insurers’ capital. Other Investment Policy Reviews In 2019, the World Trade Organization conducted a trade policy review for the East Africa Community (EAC), of which Kenya is a member (https://www.wto.org/english/tratop_e/tpr_e/tp484_e.htm). Business Facilitation In 2011, the GOK established a state agency called KenTrade to address trading partners’ concerns regarding the complexity of trading regulations and procedures. KenTrade is mandated to facilitate cross-border trade and to implement the National Electronic Single Window System. In 2017, KenTrade launched InfoTrade Kenya, located at infotrade.gov.ke, which provides a host of investment products and services to prospective investors in Kenya. The site documents the process of exporting and importing by product, by steps, by paperwork, and by individuals, including contact information for officials’ responsible relevant permits or approvals. In February 2019, Kenya implemented a new Integrated Customs Management System (iCMS) which includes automated valuation benchmarking, automated release of green-channel cargo, importer validation and declaration, and linkage with iTax. The iCMS features enable Customs to efficiently manage revenue and security related risks for imports, exports and goods on transit and transshipment. The Movable Property Security Rights Bill (2017) enhanced the ability of individuals to secure financing through movable assets, including using intellectual property rights as collateral. The Nairobi International Financial Centre Act (2017) seeks to provide a legal framework to facilitate and support the development of an efficient and competitive financial services sector in Kenya. The act created the Nairobi Financial Centre Authority to establish and maintain an efficient operating framework to attract and retain firms. The Kenya Trade Remedies Act (2017) provides the legal and institutional framework for Kenya’s application of trade remedies consistent with World Trade Organization (WTO) law, which requires a domestic institution to both receive complaints and undertake investigations in line with the WTO Agreements. To date, however, Kenya has implemented only 7.5 percent of its commitments under the WTO Trade Facilitation Agreement, which it ratified in 2015. In 2020, Kenya launched the Kenya Trade Remedies Agency for the investigation and imposition of anti-dumping, countervailing duty, and trade safeguards, to protect domestic industries from unfair trade practices. The Companies Amendment Act (2017) amended the prior Companies Act clarifying ambiguities in the act and conforms to global trends and best practices. The act amends provisions on the extent of directors’ liabilities, on the extent of directors’ disclosures, and on shareholder remedies to better protect investors, including minority investors. The amended act eliminates the requirement for small enterprises to have lawyers register their firms, the requirement for company secretaries for small businesses, and the need for small businesses to hold annual general meetings, saving regulatory compliance and operational costs. The Business Registration Services (BRS) Act (2015) established a state corporation known as the Business Registration Service to ensure effective administration of the laws relating to the incorporation, registration, operation and management of companies, partnerships, and firms. The BRS also devolves to the counties business registration services such as registration of business names and promoting local business ideas/legal entities, thus reducing costs of registration. The Companies Act (2015) covers the registration and management of both public and private corporations. In 2014, the GOK established a Business Environment Delivery Unit to address challenges facing investors in the country. The unit focuses on reducing the bureaucratic steps related to setting up and doing business in the country. Separately, the Business Regulatory Reform Unit operates a website (http://www.businesslicense.or.ke/ ) offering online business registration and providing information on how to access detailed information on additional relevant business licenses and permits, including requirements, costs, application forms, and contact details for the relevant regulatory agency. In 2013, the GOK initiated the Access to Government Procurement Opportunities program, requiring all public procurement entities to set aside a minimum of 30 percent of their annual procurement spending facilitate the participation of youth, women, and persons with disabilities (https://agpo.go.ke/ ). An investment guide to Kenya, also referred to as iGuide Kenya, can be found at http://www.theiguides.org/public-docs/guides/kenya/about# . iGuides designed by UNCTAD and the International Chamber of Commerce provide investors with up-to-date information on business costs, licensing requirements, opportunities, and conditions in developing countries. Kenya is a member of UNCTAD’s international network of transparent investment procedures. Outward Investment The GOK does not promote or incentivize outward investment. Despite this, Kenya is evolving into an outward investor in tourism, manufacturing, retail, finance, education, and media. Outward investment has been focused in the East Africa Community and select central African countries, taking advantage of the EAC preferential access between the EAC member countries. The EAC advocates for free movement of capital across the six member states – Burundi, Kenya, Rwanda, South Sudan, Tanzania, and Uganda. Kyrgyz Republic 1. Openness To, and Restrictions Upon, Foreign Investment Policies Towards Foreign Direct Investment The Kyrgyz Republic is open to foreign direct investment and the government publicly recognizes that foreign direct investment is an important component to economic development. While the government has implemented laws to entice foreign investment, application of these laws, however, inconsistent application and onerous bureaucracy continue to deter foreign investors. In particular, government activities, including demands for renegotiation of operating contracts, invasive and time-consuming audits, levies of large retroactive fines, and disputes over licenses, pose significant impediments to attracting foreign investment. Since 1993, the United States has a bilateral investment treaty with the Kyrgyz Republic that encourages and offers reciprocal protection of investment. The Kyrgyz Republic has an Investment and Trade Promotion and Protection Agency of the Kyrgyz Republic under the Ministry of Economy (IPPA). The IPPA serves as a vehicle for maintaining an ongoing dialogue with foreign investors and advocates for investing in the Kyrgyz Republic. The agency participates in the development and implementation of measures to attract and stimulate investment activity. Its mandate is to coordinate with state bodies, local municipalities, business entities, and non-state actors to promote investment and support investors in the Kyrgyz Republic, including private investment and public-private partnerships, as well as assist local exporters to promote Kyrgyz goods to external markets, and develop Free Economic Zones (FEZ). The IPPA has investor support programs to help guide investors through the registration process and conducts outreach aimed at helping create an environment conducive to foreign investment. The IPPA often coordinates with international donor organizations on hosting round- tables discussions, exchanges, and capacity building workshops in the field of economic development. In August 2019, the Supervisory Board of the Institute of the Business Ombudsman appointed former UK Ambassador to the Kyrgyz Republic, Robin Ord-Smith, as Business Ombudsman. The Institute of Business Ombudsman was created in January 2019 is a non-state body, funded by external donor sources, to protect the rights, freedoms and legitimate interests of business entities, both local and foreign. The selection of a foreigner to head the Institute sends a positive signal to business associations and foreign investors of the country’s commitment to improving transparency mechanisms for regulating business activities. The government has established several committees and councils to coordinate cooperation between the business associations and government bodies. Since 2017, the Business and Entrepreneurship Development Council regularly convenes MPs, business community representatives from various sectors of the economy to discuss measures to improve the investment, promotion of entrepreneurship, and legislation to facilitate doing business in the Kyrgyz Republic. The Committee on Development of Industry and Entrepreneurship under the President of the Kyrgyz Republic serves as a platform for entrepreneurs to turn to in case if their grievances are not addressed by the government. The respective presidential decree to establish the Committee under the National Council on Sustainable Development of the Kyrgyz Republic was signed on December 24, 2019 with the Provisions and the following amendment to include Vice-Prime-Minister on economic development, Business Ombudsman and heads of business associations. Once this structure fully launches, there will be platforms to raise investment climate and other business concerns at the offices of the President, Parliament and Prime Minister. The Kyrgyz government also interacts with the business community via a number of local associations that serve as a voice for entrepreneurs and corporations, including the American Chamber of Commerce in the Kyrgyz Republic (AmCham), and the International Business Council (IBC), among others. The Ministry of Economy, Parliamentary Business and Entrepreneurship Development Council, and other government bodies often seek the opinion of these associations during the formulation of policy. Limits on Foreign Control and Right to Private Ownership and Establishment While there are still no official limits on foreign control, a large investor in a politically sensitive industry may find that the government imposes investor-specific requirements such as a high percentage of local workforce employment or a minimum number of local seats on a board of directors. Foreigners have the right to establish and own businesses, and there have been no allegations on market access restrictions from U.S. investors since 2016. By law, the Kyrgyz Republic guarantees equal treatment to investors and places no limit on foreign ownership or control. In the last two years, there were no known cases of sector-specific restrictions, limitations or requirements applied to foreign ownership and control. In April 2017, amendments to the “Law on Mass Media” to limit foreign ownership of television (excluding radio and print media) broadcasters to 35 percent, was signed by the President and entered into force in June 2017. Post is unaware of any formal investment screening processes in the Kyrgyz Republic. Other Investment Policy Reviews In 2016, the International Finance Corporation (IFC), a member of the World Bank Group, released a report on the Kyrgyz investment climate in January 2016. The report is available at: https://documents.worldbank.org/en/publication/documents-reports/documentdetail/259411467997285741/investment-climate-in-kyrgyz-republic-views-of-foreign-investors-results-of-the-survey-of-foreign-investors-operating-and-non-operating here. The Investment Policy Review (IPR) of The Kyrgyz Republic for 2016 by UNCTAD is available at https://unctad.org/en/pages/PublicationWebflyer.aspx?publicationid=1436 . Business Facilitation Starting a business in the Kyrgyz Republic has become easier in the elimination of the minimum capital requirement for business registration, abolishment of certain registration fees, and reduced registration time. The Kyrgyz Republic does not have a business registration website. Registration of legal entities, branches, or representative offices in the Kyrgyz Republic is based on “registration by notification” and the “one stop-shop” practice. State registration of a legal entity is completed within three business days from the date of filing the necessary documents for a specified fee. The Kyrgyz Republic ranked in the top quintile of the World Bank’s 2019 Doing Business report (42nd out of 190 countries surveyed) in “Starting a Business.” From May 2, 2018 to May 1, 2019, 115 economies implemented 294 business regulatory reforms across the 10 areas measured by Doing Business. Outward Investment Post is not aware of host government efforts to promote outward investment from the Kyrgyz Republic, nor of any instances in which the government sought to restrict domestic investors from investing abroad. Mali 1. Openness To, and Restrictions Upon, Foreign Investment Policies Towards Foreign Direct Investment The Government of Mali encourages foreign investment. In general, the law treats foreign and domestic investment equally. In practice, U.S. investors report facing many of the same challenges as other foreign investors do, including allegedly unfair application of tax collection laws, difficulties clearing goods through customs, and requests for bribes. Corruption in the judiciary is common and foreign companies may find themselves at a disadvantage vis-à-vis Malian investors in enforcing contracts and competing for public procurement tenders. The Malian government has instituted policies promoting direct investment and export-oriented businesses. Foreign investors go through the same screening process as domestic investors. Criteria for authorizing an investment under Mali’s 2012 investment code include the size of the proposed capital investment, the use of locally produced raw materials, and the level of job creation. Mali’s Investment Promotion Agency (API-Mali) serves as a one-stop shop for prospective investors and serves both Malian and foreign enterprises of all sizes. API-Mali’s website (https://apimali.gov.ml/ ) provides information on business registration, investment opportunities, tax incentives, and other topics relevant to prospective investors. Mali maintains an office in charge of business climate reform (Cellule Technique des Réformes du Climat des Affaires or CTRCA). Since 2015, Mali has also had a committee for monitoring business environment reforms that includes both government and private sector members. Mali adopted a law governing public-private partnerships (PPPs) in 2016 and has a dedicated PPP unit charged with reviewing and facilitating implementation of PPP projects in a multitude of sectors. 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 with no restriction to forms of remunerative activities. There are some specific limits on ownership in the mining and media sector: Malian law requires that the owners and primary shareholders of media companies be Malian nationals. Foreign investors in the mining sector can own up to 90 percent of a mining company. The West African Economic and Monetary Union (WAEMU), of which Mali is a member, requires Malian and foreign companies to report if they will hold foreign currency reserves in their Malian business accounts and to receive approval from the Ministry of Economy and Finances and from the Central Bank for West African States (BCEAO). Other Investment Policy Reviews The World Trade Organization (WTO) reviewed the trade and investment policies of WAEMU members, including Mali, in 2017. The review can be accessed at https://www.wto.org/english/tratop_e/tpr_e/tp462_e.htm . Business Facilitation Mali’s Investment Promotion Agency, API-Mali (https://apimali.gov.ml/ ), serves as a one-stop shop to facilitate both foreign and local investment. In 2020, the World Bank’s Doing Business Report ranked Mali 124th out of 190 countries for ease of starting a business (a separate indicator that feeds into the overall ease of doing business ranking). The 2020 Doing Business Report estimates that it takes an average of 11 days and five separate administrative procedures to register a firm. There is no discrimination based on gender, age, or ethnicity in the process of business registration. Foreign companies wishing to register in Mali may receive tax and customs benefits depending on the size of investment. Small and medium-sized enterprises (for which there is no common definition across Government of Mali entities) are also eligible for some fiscal advantages. Outward Investment The Government of Mali has no policy to promote outward investment. Mauritius 1. Openness To, and Restrictions Upon, Foreign Investment Policies Towards Foreign Direct Investment Mauritius actively seeks foreign investment. The Investment Office (formerly the Board of Investment) of the Economic Development Board (EDB) is the single-gateway government agency responsible for promoting investment in Mauritius, and for helping guide investors through the country’s legal and regulatory requirements. According to a number of surveys and metrics, Mauritius is among the freest and most business-friendly countries in Africa. The 2020 Index of Economic Freedom, published by the Heritage Foundation, ranks Mauritius first in the Sub-Saharan Africa region among 43 countries and 21st globally. For the 12th consecutive year, the World Bank’s 2020 Doing Business report ranked Mauritius first among African economies, and 13th worldwide, in terms of overall ease of doing business. There is no formal ongoing dialogue with investors. However, one-to-one meetings are usually held with investors while the government prepares its annual budget. Limits on Foreign Control and Right to Private Ownership and Establishment A non-citizen can hold, purchase, or acquire real property under the Non-Citizens (Property Restriction) Act, or NCPRA, subject to government approval. A foreigner can acquire residential property and apartments under the government-regulated Property Development Scheme (PDS) http://www.edbmauritius.org/schemes/property-development-scheme . The NCPRA was amended in December 2016 to allow foreigners to purchase certain types of properties, as long as the amount paid is over six million Mauritian rupees (approximately USD 172,000). A non-citizen is eligible for a residence permit upon the purchase of a house under the PDS if the investment made is more than USD 500,000. More information is available at http://dha.pmo.govmu.org/English/Mandate/Pages/Non-Citizens-Property-Restriction.aspx. Regarding business activities, the GoM generally does not discriminate between local and foreign investment. There are, however, some business activities where foreign involvement is restricted. These include television broadcasting, sugar production, newspaper or magazine publishing, and certain operations in the tourism sector. In 2019, the Independent Broadcasting Authority (IBA) Act was amended to increase the allowable equity participation of a foreign company investing in broadcasting to 49.9 percent from 20 percent. Similarly, control by foreign nationals in broadcasting was limited to 49.9 percent. Furthermore, a foreign investor cannot hold 20 percent or more of a company that owns or controls any newspaper or magazine, or any printing press publishing such publications. The IBA Act can be accessed via http://www.iba.mu/legal.htm. In the sugar sector, no foreign investor is allowed to make an investment that would result in 15 percent or more of the voting capital of a Mauritian sugar company being held by foreign investors. More information can be accessed at https://www.stockexchangeofmauritius.com/media/2124/securities-investment-by-foreign-investors-rules-2013.pdf. In the tourism sector, there are conditions on investment by non-citizens in guesthouse/tourist accommodation, pleasure crafts, scuba diving, and tour operators. Generally, the limitations refer to a minimum investment amount, number of rooms, or a maximum equity participation, depending on the business activity. Details of the restrictions can be accessed via http://www.tourismauthority.mu/en/licence-categories-11/tourist-accommodation-certificate-30.html. In the construction sector, foreign consultants or contractors are required to register with the Construction Industry Development Board (CIDB). Details on registration procedures are available at https://www.cidb.mu/registration/contractors . The Investment Office of the EDB screens foreign investment proposals and provides a range of services to potential investors. The EDB is a useful resource for investors exploring business opportunities in Mauritius and provides assistance with occupation permits, licenses, and clearances by coordinating with relevant local authorities. In 2019, U.S. Embassy Port Louis did not receive negative comments from U.S. businesses regarding the fairness of the government’s investment screening mechanisms. The Investment Office of the EDB reviews proposals for economic benefit, environmental impact, and national security concerns. EDB then advises the potential investor on specific permits or licenses required, depending on the nature of the business. Foreign investors can also apply through the EDB for necessary permits. In the event an investment fails review, the prospective investor may appeal the decision within the EDB or to the relevant government ministry. Other Investment Policy Reviews Mauritius’ most recent third-party investment policy reviews through multilateral organizations were completed in 2014. In June 2014, the GoM conducted an investment policy review with the Organization for Economic Cooperation and Development (OECD). The review can be accessed via http://www.oecd.org/daf/inv/investment-policy/mauritius-investment-policy.htm . The review concluded that, while policies and legislation in Mauritius support private sector development, incentive schemes tend to bias investment towards real estate and property development. In October 2014, the GoM also conducted a trade policy review with the World Trade Organization (WTO), which can be accessed at https://www.wto.org/english/tratop_e/tpr_e/tp404_e.htm . A new trade policy review was expected to start in May 2020. Business Facilitation The GoM recognizes the importance of a good business environment to attract investment and achieve a higher growth rate. In 2019, the Business Facilitation (Miscellaneous Provisions) Act entered into force. The main reforms brought about by this legislation were expediting trade fee payments, reviewing procedures for construction permits, reviewing fire safety compliance requirements, streamlining of business licenses, and implementing numerous trade facilitation measures. The act can be accessed at https://www.edbmauritius.org/resources/legislations. The incorporation of companies and registration of business activities falls under the provisions of The Companies Act of 2001 and The Business Registration Act of 2002 . All businesses must register with the Registrar of Companies. As a general rule, a company incorporated in Mauritius can be 100 percent foreign-owned with no minimum capital. According to the World Bank 2020 Doing Business report, while the procedures for registering a company takes less than a day, actually starting a business takes between four and five days. After the Registrar of Companies issues a certificate of incorporation, foreign-owned companies must register their business activities with the EDB. The company can then apply for occupation permits (work and residence permits) and incentives offered to investors. EDB’s investment facilitation services are available to all investors, domestic and foreign. In partnership with the Corporate and Business Registration Department (a division of the Ministry of Finance and Economic Development), the Mauritius Network Services (MNS) has implemented the Companies and Business Registration Integrated System, a web-based portal that allows electronic submission for incorporation of companies and application for the Business Registration Number, file statutory returns, pay yearly fees, register businesses, and search for business information. Applicants can register with MNS at https://portalmns.mu/cbris. In March 2019, the National Electronic Licensing System (NELS), which is co-financed by the European Union, was officially launched. NELS is a single point of entry for the processing of permits and licenses needed to start and operate a business. It can be accessed at https://business.edbmauritius.org . Outward Investment The GoM imposes no restrictions on capital outflows. Due to the small size of the Mauritian economy, the government encourages Mauritian entrepreneurs to invest overseas, particularly in Africa, to expand and grow their businesses. As part of its Africa Strategy, the government has established the Mauritius Africa Fund: a public company with USD 13.8 million capitalization to support Mauritian investment in Africa. Through the Fund, the government participates as an equity partner up to 10 percent of the seed capital invested by Mauritian investors in projects targeted towards Africa. The government has signed agreements with Senegal, Madagascar, and Ghana establishing and managing Special Economic Zones (SEZ) in these countries and has invited local and international firms to set up operations in the SEZs. As per the 2018 Finance Act, Mauritian companies collaborating with the Mauritius-Africa Fund for development of infrastructure in the SEZs benefit from a five-year tax holiday. To further facilitate investment, Mauritius has also signed Investment Promotion and Protection Agreements and Double Taxation Avoidance Agreements with African states. Since 2012, the Board of Investment (now restructured as the Investment Office of the EDB) has been operating an Africa Center of Excellence, a special office dedicated to facilitating investment from Mauritius into Africa. It acts as a repository of business information for Mauritian entrepreneurs about investment opportunities in different sectors in Africa. In 2018, the most recent year for which the Central Bank of Mauritius has published data, gross direct investment flows abroad (excluding the global business sector) amounted to USD 106 million. The top three sectors for outward investment were manufacturing (38 percent), finance and insurance activities (30 percent), and accommodation and food service activities (10 percent). Investment abroad was mainly geared toward developing countries, and Africa was the biggest recipient region of foreign direct investment, amounting to USD 44 million. Kenya was the top recipient country with USD 31 million. Data on outward investment can be obtained at https://www.bom.mu/publications-and-statistics/statistics/external-sector-statistics/direct-investment-flows . Micronesia 1. Openness To, and Restrictions Upon, Foreign Investment Policies Towards Foreign Direct Investment There were many structural impediments to increasing foreign investment in the FSM. The FSM had no department dedicated to promoting investment or an ongoing dialogue with investors. These challenges, both regulatory and political, affected foreign investment and economic progress in general, and addressing them would require a constitutional and political will to change that is unlikely in the foreseeable future. Some political leaders at the state and national levels were owners of the largest businesses on the islands and strongly opposed the required structural changes that would result in increased competition. The FSM scored in the lowest quintile in almost all measures and international indices of economic activity and climate for doing business. In theory, the country’s courts supported contractual agreements, but enforcement of judicial decisions was weak. Foreign firms doing business in the FSM had difficulty collecting debts owed by FSM governments, companies, and individuals, even after obtaining favorable judgments. For these reasons, the World Bank ranked the FSM very low in protecting minority investors (185th of 190 countries) and enforcing contracts (183rd of 190 countries). U.S. companies and individuals considering doing business with parties in the FSM should exercise due diligence and negotiate minimal credit and payment arrangements that fully protect their interests. Limits on Foreign Control and Right to Private Ownership and Establishment All four of the FSM states had limits on foreign ownership of small- and medium-size businesses. Large projects were assessed by the respective state government on a case-by-case basis. Each state required a separate application for foreign investment permits. Foreign investment was strictly limited by local ownership requirements (51-60 percent) and residency requirements of more than five years. Financing through bank loans was not possible due to a weak financial sector. Local small- and medium-size businesses were protected from foreign competition through law. Larger projects in a business sector already owned by public figures faced strong political opposition. Large and unrealistic development proposals were received enthusiastically by politicians, but did not move forward primarily due to land issues and traditional land owner disputes. The FSM does not maintain an investment screening mechanism for inbound foreign investment Other Investment Policy Reviews N/A Business Facilitation Micronesia lacked a single window for online business registration or information portals providing comprehensive business registration information. The FSM Department of Resources and Development (R&D) maintained information on trade and investment on their website. It was reported that obtaining licenses and permits in a timely manner may depend more on the relationship of the investor (or local legal counsel) with the official in charge, rather than any clear procedure or timeline. The World Bank’s 2018 Ease of Doing Business report ranked the FSM as 158th of 190 countries globally in terms of procedures to register a business. Outward Investment The FSM government did not promote, incentivize or restrict outward investment. The FSM government did not restrict domestic investors from investing abroad. Nicaragua 1. Openness To, and Restrictions Upon, Foreign Investment Policies Towards Foreign Direct Investment The Nicaraguan government seeks foreign direct investment to project normalcy and international support in a time when foreign investment has all but stopped following the government’s violent suppression of peaceful protests starting in April 2018. As traditional sources of foreign direct investment fled the ongoing political crisis, the government has increasingly pursued foreign investment from other countries such as Iran and China. Investment incentives target export-focused companies that require large amounts of unskilled or low-skilled labor. In general, there are many laws and practices that harm foreign investors, but few that target foreign investors in particular. Investors should be aware that local connections, in particular with the government, are vital to success. Investors have raised concerns that regulatory authorities act arbitrarily and often favor one competitor over another. Foreign investors report significant delays in receiving residency permits, requiring frequent travel out of the country to renew visas. ProNicaragua, the country’s investment and export promotion agency, has all but halted its investment promotion activities. It has virtually no clients due to the ongoing political crisis. ProNicaragua, already heavily politicized, became more so after President Ortega installed his son, Office of Foreign Assets Control (OFAC)-designated Laureano Ortega, as the organization’s primary public face. ProNicaragua formerly provided information packages, investment facilitation, and prospecting services to interested investors. 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 through a series of roundtable and regular meetings. 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. Nicaragua allows foreigners to be shareholders of local companies, but the company representative must be a Nicaraguan citizen 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 can limit foreign ownership for national security or public health reasons under the Foreign Investment Law. The government previously required that all investments in the petroleum sector include the state-owned enterprise Petronic as a partner. That requirement is now in flux following the government’s creation of four new state-owned energy companies to bypass U.S. sanctions against the petroleum distribution company DNP. The government 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 is not transparent. Other Investment Policy Reviews In the past three years, 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 The government is eager to draw more foreign investment to Nicaragua. Its business facilitation efforts focus primarily on one-on-one engagement with potential investors, rather than a systematic whole-of-government approach. Nicaragua does not have an online business registration system. Companies must typically register with the national tax administration, social security administration, and local municipality to ensure the government can collect taxes. Those registers are typically not available to the public. According to the Ministry of Growth, Industry, 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 takes eight procedures and 42 days. Outward Investment Nicaragua does not promote or incentivize outward investment and does not restrict domestic investors from investing abroad. Saudi Arabia 1. Openness To, and Restrictions Upon, Foreign Investment 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 Arabia’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 reforms 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 2018, the SAG has hosted Formula E races, PGA European Tour professional golf tournaments, a world heavyweight boxing title match, and a professional tennis tournament. Saudi Arabia launched the Saudi Seasons initiative in 2019 with 11 tourism seasons held in each region of the Kingdom. The program includes events and activities specifically designed to complement the cultural, touristic, and historical touchstones of Saudi Arabia. As part of the Riyadh Season, the Kingdom organized a first-ever car exhibition and auction in Riyadh, which attracted 350 U.S. exhibitors. The SAG is proceeding with “economic cities” and new “giga-projects” that are at various stages of development and is seeking foreign investment in them. In 2020, the Kingdom announced the opening of a NEOM Airport, an important milestone for opening the northwest territory for development. 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 commercial center development with nearly 60 skyscrapers in Riyadh; Red Sea Project, a massive tourism development on the archipelago of islands along 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 $500 billion long-term development project to build a futuristic “independent economic zone” in northwest Saudi Arabia. Pressure on Saudi Arabia’s fiscal situation from the sharp downturn in oil prices and unexpected spending needed to respond to COVID-19 will have a negative impact on the budgets of ministries and state-owned entities. While it is unclear what the impact on specific development projects will be, fiscal pressure is likely to dampen the SAG’s ambitious plans in the near term. The Ministry of Investment of Saudi Arabia (MISA), formerly 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, MISA 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 (https://investsaudi.sa/en/sectors-opportunities/). MISA has introduced e-licenses for the first time as part of its ongoing efforts to provide a more efficient and user-friendly process. An online “instant” license issuance or renewal service is now being offered by MISA to foreign investors that are listed on a local or international stock market and meet certain conditions. Saudi Arabia recently opened the following additional sectors to foreign investors: (i) road transport, (ii) real estate brokerage, (iii) audiovisual services and (iv) recruitment and related services. Despite Saudi Arabia’s overall welcoming approach to foreign investment, some structural impediments remain. Foreign investment is currently prohibited in 10 sectors on the Negative List, including: Oil exploration, drilling, and production; Catering to military sectors; Security and detective services; Real estate investment in the holy cities, Mecca and Medina; Tourist orientation and guidance services for religious tourism related to Hajj and umrah; Printing and publishing (subject to a variety of exceptions); Certain internationally classified commission agents; Services provided by midwives, nurses, physical therapy services, and quasi-doctoral services; Fisheries; and Poison centers, blood banks, and quarantine services. 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. At the same time, MISA 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. On July 1, 2020, the SAG will increase the value-added tax (VAT) from five percent to 15 percent. The VAT was originally introduced in January 2018, 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). 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. The Dow Chemical Company and Aramco are partners in a $20 billion joint venture for the world’s largest integrated petrochemical production complex. With respect to other non-oil natural resources, the national mining company, Ma’aden, has a $12 billion joint venture with Alcoa for bauxite mining and aluminum production and a $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 in Saudi Arabia, 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. MISA’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. In theory, these regulations permit the registration of Saudi-foreign joint venture consulting firms. As part of its WTO commitments, Saudi Arabia generally allows consulting firms to establish a local office without a Saudi partner. Foreign engineering consulting companies, however, must have been incorporated for at least 10 years and have operations in at least four different countries to qualify. Foreign entities practicing accounting and auditing, architecture, or civil planning, or providing healthcare, dental, or veterinary services, must still have a Saudi partner. In recent years, Saudi Arabia has opened additional service markets to foreign investment, including financial and banking services; aircraft maintenance and repair; computer reservation systems; wholesale, retail, and franchise distribution services; both basic and value-added telecom services; and investment in the computer and related services sectors. In 2016, Saudi Arabia formally approved full foreign ownership of retail and wholesale businesses in the Kingdom. While some companies have already received licenses under the new rules, the restrictions attached to obtaining full ownership – including a requirement to invest over $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 MISA, foreign and local investors must register a new business via the Ministry of Commerce (MOC), which has begun offering online registration services for limited liability companies at: https://mc.gov.sa/en/ . Though users may submit articles of association and apply for a business name within minutes on MOC’s website, final approval from the ministry often takes a week or longer. Applicants must also complete a number of other steps 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 MISA application is completed, 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 MISA 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. In 2019, MISA established offices in the United States, starting in Washington D.C., to further facilitate investment in Saudi Arabia. Saudi officials have stated their intention to attract foreign small- and medium-sized enterprises (SMEs) to the Kingdom. To facilitate and promote the growth of the SME sector, the SAG established the Small and Medium Enterprises General Authority in 2015 and released a new Companies Law in 2016. It also substantially reduced the minimum capital and number of shareholders required to form a joint stock company from five to two. Additionally, as of 2019, women no longer need a male guardian to apply for a business license. 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 has been transforming 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 $3.5 billion stake in Uber. The PIF has also announced a $400 million investment in Magic Leap, a Florida-based company that is developing “mixed reality” technology, and a $1 billion investment in Lucid Motors, a California-based electric car company. In the first half of 2020, the PIF made a number of new investments, including in Facebook, Starbucks, Disney, Boeing, Citigroup, LiveNation, Marriott, several European energy firms, and Carnival Cruise Lines. Saudi Aramco and SABIC are also major investors in the United States. In 2017, Aramco acquired full ownership of Motiva, the largest refinery in North America, in Port Arthur, Texas. SABIC has announced a multi-billion dollar joint venture with ExxonMobil in a petrochemical facility in Corpus Christi, Texas. Sierra Leone 1. Openness To, and Restrictions Upon, Foreign Investment Policies toward Foreign Direct Investment The Government of Sierra Leone has a favorable attitude toward foreign direct investment (FDI), which it sees as critical to revitalizing the country’s economic growth. The Ministry of Trade and Industry oversees trade policies and programs, and supervises the Sierra Leone Investment and Export Promotion Agency (SLIEPA), the government’s lead agency in implementing initiatives to stimulate exports and investments, improve the investment climate, and promote the development of small and medium-sized enterprises (SMEs). The government has a variety of initiatives to remove constraints on trade and improve the investment climate. In recent years, Sierra Leone has constructed major roads leading to district headquarter towns and rehabilitated a network of trunk and feeder roads, linking agricultural suppliers with urban markets in mainly district headquarter towns. The government has also prioritized improvements to the country’s trade facilitation infrastructure, including simplifying the customs clearance procedures at ports and land borders, and extending the major seaport to accommodate more vessels. While the government’s message is that the country is open to foreign investment, investors perceive corruption as a primary obstacle. The Bio administration has taken efforts to address corrupt practices affecting procurements, land rights, customs, law enforcement, judicial proceedings, and other governance and economic sectors. The legal system generally treats foreign investors in a non-discriminatory fashion, although investors have noted that the judicial application of the laws is often subject to financial and political influences. The legal framework is largely in place, but consistent enforcement is a challenge. Moreover, the government has failed to abide by international arbitral rulings related to a U.S.-owned mining company. 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 activities. Foreigners are free to establish, acquire, and dispose of interests in business enterprises. However, foreign investors cannot invest in arms and ammunition, cement block manufacturing, granite and sandstone excavation, manufacturing of certain consumer durable goods, and military, police, and prison guards’ apparel and accoutrements. Furthermore, there are limits to land ownership by foreign entities and individuals; the limitations vary depending on the location of the land being used and are discussed below in the “Real Property” section. Business Facilitation Sierra Leone has made progress in recent years in simplifying its business registration process. The Corporate Affairs Commission (CAC) now manages the registration of limited liability companies and provides a “one stop shop” including an online business registration system. The entire process involves five steps and takes on average ten days. Additional information is available from the CAC’s website at http://www.cac.gov.sl/ . SLIEPA also provides useful guidance on starting a business, sector-specific business licenses, mining licensing and certification fees, and marine resources and fisheries at http://sliepa.org/starting-a-business/ . Outward Investment Sierra Leone has no program to promote or incentivize outward investment, but also places no restrictions on such activity. Switzerland and Liechtenstein 1. Openness To, and Restrictions Upon, Foreign Investment Policies Towards Foreign Direct Investment With the exception of its agricultural sector, foreign investment into Switzerland is generally not hampered by significant barriers, with no reported discrimination against foreign investors or foreign-owned investments. Incidents of trade discrimination do exist, for example with regards to agricultural goods such as bovine genetics products. A Swiss government-affiliated non-profit organization, Switzerland Global Enterprise (SGE), has a nationwide mandate to attract foreign business to Switzerland on behalf of the Swiss Confederation. SGE promotes Switzerland as an economic hub and fosters exports, imports, and investments. Some city and cantonal governments offer access to an ombudsman, who may address a wide variety of issues involving individuals and the government, but does not focus exclusively on investment issues. Limits on Foreign Control and Right to Private Ownership and Establishment Foreign and domestic enterprises may freely establish, acquire, and dispose of interests in business enterprises in Switzerland. Switzerland does not maintain an investment screening mechanism for inbound foreign investment; the Federal Assembly instructed the Federal Council to prepare one in March 2020, a process expected to take two years. There are some investment restrictions in areas under state monopolies, including certain types of public transportation, postal services, alcohol and spirits, aerospace and defense, certain types of insurance and banking services, and the trade in salt. Restrictions (in the form of domicile requirements) also exist in air and maritime transport, hydroelectric and nuclear power, operation of oil and gas pipelines, and the transportation of explosive materials. Additionally, the following legal restrictions apply within Switzerland: Corporate boards: The board of directors of a company registered in Switzerland must consist of a majority of Swiss citizens residing in Switzerland; at least one member of the board of directors who is authorized to represent the company (i.e. to sign legal documents) must be domiciled in Switzerland. If the board of directors consists of a single person, this person must have Swiss citizenship and be domiciled in Switzerland. Foreign-controlled companies usually meet these requirements by nominating Swiss directors who hold shares and perform functions on a fiduciary basis. Mitigating these requirements is the fact that the manager of a company need not be a Swiss citizen and company shares can be controlled by foreigners. The establishment of a commercial presence by persons or enterprises without legal status under Swiss law requires a cantonal establishment authorization. These requirements do not generally pose a major hardship or impediment for U.S. investors. Hostile takeovers: Swiss corporate equity can be issued in the form of either registered shares (in the name of the holder) or bearer shares. Provided the shares are not listed on a stock exchange, Swiss companies may, in their articles of incorporation, impose certain restrictions on the transfer of registered shares to prevent hostile takeovers by foreign or domestic companies (article 685a of the Code of Obligations). Hostile takeovers can also be annulled by public companies under certain circumstances; the company must cite in its statutes significant justification (relevant to the survival, conduct, and purpose of their business) to prevent or hinder a takeover by a foreign entity. Furthermore, public corporations may limit the number of registered shares that can be held by any shareholder to a percentage of the issued registered stock. In practice, many corporations limit the number of shares to 2-5 percent of the relevant stock. Under the public takeover provisions of the 2015 Federal Act on Financial Market Infrastructures and Market Conduct in Securities and Derivatives Trading and its 2019 amendments, a formal notification is required when an investor purchases more than 3 percent of a Swiss company’s shares. An “opt-out” clause is available for firms that do not want to be taken over by a hostile bidder, but such opt-outs must be approved by a super-majority of shareholders, and must take place well in advance of any takeover attempt. Banking: Those wishing to establish banking operations in Switzerland must obtain prior approval from the Swiss Financial Market Supervisory Authority (FINMA), a largely independent agency administered under the Swiss Federal Department of Finance. FINMA promotes confidence in financial markets and works to protect customers, creditors, and investors. FINMA approval of bank operations is generally granted if the following conditions are met: reciprocity on the part of the foreign state; the foreign bank’s name must not give the impression that the bank is Swiss; the bank must adhere to Swiss monetary and credit policy; and a majority of the bank’s management must have their permanent residence in Switzerland. Otherwise, foreign banks are subject to the same regulatory requirements as domestic banks. Banks organized under Swiss law must inform FINMA before they open a branch, subsidiary, or representation abroad. Foreign or domestic investors must inform FINMA before acquiring or disposing of a qualified majority of shares of a bank organized under Swiss law. If exceptional temporary capital outflows threaten Swiss monetary policy, the Swiss National Bank, the country’s independent central bank, may require other institutions to seek approval before selling foreign bonds or other financial instruments. Government deposit insurance of individual current accounts held in Swiss banks is limited to CHF 100,000 per client per bank. Insurance: A federal ordinance requires the placement of all risks physically situated in Switzerland with companies located in the country. Therefore, it is necessary for foreign insurers wishing to provide liability coverage in Switzerland to establish a subsidiary or branch in-country. U.S. investors have not identified any specific restrictions that create market access challenges for foreign investors. Other Investment Policy Reviews The World Trade Organization’s (WTO) September 2017 Trade Policy Review of Switzerland and Liechtenstein includes investment information. Other reports containing elements referring to the investment climate in Switzerland include the OECD Economic Survey of November 2017. Link to the WTO report: https://www.wto.org/english/tratop_e/tpr_e/tp_rep_e.htm#bycountry Link to the OECD reports / papers: https://www.oecd-ilibrary.org/economics/oecd-economic-surveys-switzerland_19990464;jsessionid=174m5wrgvwd7j.x-oecd-live-02 Business Facilitation The Swiss government-affiliated non-profit organization Switzerland Global Enterprise (SGE) has a mandate to attract foreign business to Switzerland on behalf of the Swiss Confederation. SGE promotes Switzerland as an economic hub and fosters exports, imports, and investments. Larger regional offices include the Greater Geneva-Berne Area (which covers large parts of Western Switzerland), the Greater Zurich Area, and the Basel Area. Each canton has a business promotion office dedicated to helping facilitate real estate location, beneficial tax arrangements, and employee recruitment plans. These regional and cantonal investment promotion agencies do not require a minimum investment or job-creation threshold in order to provide assistance. However, these offices generally focus resources on attracting medium-sized entities that have the potential to create between 50 and 249 jobs in their region. References: The Swiss government’s online portal (“easygov”) is Switzerland’s online registration website and includes links to the main local interlocutors for business related questions: https://www.easygov.swiss/easygov/#/ Switzerland Global Enterprise connects companies with potential host regions: https://www.s-ge.com/en/investment-promotion Some of the larger promotion offices are: Invest Western Switzerland Area: https://www.ggba-switzerland.ch/ Greater Zurich Area: https://www.greaterzuricharea.com Basel Area: https://www.baselarea.swiss/ Switzerland has a dual system for granting work permits and allowing foreigners to create their own companies in Switzerland. Employees who are citizens of the EU/EFTA area can benefit from the EU Free Movement of Persons Agreement. U.S. citizens who are not citizens of an EU/EFTA country and want to become self-employed in Switzerland must meet Swiss labor market requirements. The criteria for admittance, usually not creating a hindrance for U.S. persons, are contained in the Federal Act on Foreign Nationals (FNA), the Decree on Admittance, Residence and Employment (VZAE) and the provisions of the FNA and the VZAE. The Federal Act on Foreign Nationals (FNA) (unofficial English translation): https://www.admin.ch/opc/en/classified-compilation/20020232/index.html Decree on Admittance, Residence and Employment (VZAE) (not available in English): https://www.admin.ch/opc/de/classified-compilation/20070993/index.html Provisions of the FNA and the VZAE (not available in English): https://www.ejpd.admin.ch/dam/data/bfm/rechtsgrundlagen/weisungen/auslaender/weisungen-aug-d.pdf Setting up a company in Switzerland requires registration at the relevant cantonal Commercial Registry. The cost for registering a company is typically USD 1,300 – USD 15,200, depending on the company type. These costs mainly cover the Public Notary and entry into the Commercial Registry. Other steps/procedures for registration include: 1) placing paid-in capital in an escrow account with a bank; 2) drafting articles of association in the presence of a notary public; 3) filing a deed certifying the articles of association with the local commercial register to obtain a legal entity registration; 4) paying the stamp tax at a post office or bank after receiving an assessment by mail; 5) registering for VAT; and 6) enrolling employees in the social insurance system (federal and cantonal authorities). The World Bank Doing Business Report 2020 ranks Switzerland 36th in the ease of doing business among the 190 countries surveyed, and 81st in the ease of starting a business, with a six-step registration process and 10 days required to set up a company. Outward Investment While Switzerland does not explicitly promote or incentivize outward investment, Switzerland’s export promotion agency Switzerland Global Enterprise facilitates overseas market entry for Swiss companies through its Swiss Business Hubs in several countries, including the United States. Switzerland does not restrict domestic investors from investing abroad. Tunisia 1. Openness To, and Restrictions Upon, Foreign Investment Policies Towards Foreign Direct Investment The GOT is working to improve the business climate and attract FDI. The GOT prioritizes attracting and retaining investment, particularly in the underdeveloped interior regions, and reducing unemployment. More than 3,350 foreign companies currently operate in Tunisia, and the government has historically encouraged export-oriented FDI in key sectors such as call centers, electronics, aerospace and aeronautics, automotive parts, textile and apparel, leather and shoes, agro-food, and other light manufacturing. In 2019, the sectors that attracted the most FDI were energy (37 percent), services (12 percent), the electrical and electronic industry (20.6 percent), the mechanical industry (8.5 percent), and agro-food products (4 percent). Inadequate infrastructure in the interior regions results in the concentration of foreign investment in the capital city of Tunis and its suburbs (40.4 percent), the northern coastal region (20.5 percent), and the eastern coastal region (26.1 percent). Internal western and southern regions attracted only 13 percent of foreign investment despite special tax incentives for those regions. The Tunisian Parliament passed an Investment Law (#2016-71) in September 2016 that went into effect April 1, 2017 to encourage the responsible regulation of investments. The law provided for the creation of three major institutions: The High Investment Council, whose mission is to implement legislative reforms set out in the investment law and decide on incentives for projects of national importance (defined as investment projects of more than 50 million dinars and 500 jobs). The Tunisian Investment Authority, whose mission is to manage investment projects of more than 15 million dinars and up to 50 million dinars. Investment projects of less than 15 million dinars are managed by the Foreign Investment Promotion Agency (FIPA). The Tunisian Investment Fund, which will fund foreign investment incentive packages. These institutions were all launched in 2017. However, the Foreign Investment Promotion Agency (FIPA) continues to be Tunisia’s principal agency to promote foreign investment. FIPA is a one-stop shop for foreign investors. It provides information on investment opportunities, advice on the appropriate conditions for success, assistance and support during the creation and implementation of the project, and contact facilitation and advocacy with other government authorities. Under the 2016 Investment Law (article 7), foreign investors have the same rights and obligations as Tunisian investors. Tunisia encourages dialogue with investors through FIPA offices throughout the country. Limits on Foreign Control and Right to Private Ownership and Establishment Foreign investment is classified into two categories: “Offshore” investment is defined as commercial entities in which foreign capital accounts for at least 66 percent of equity, and at least 70 percent of the production is destined for the export market. However, investments in some sectors can be classified as “offshore” with lower foreign equity shares. Foreign equity in the agricultural sector, for example, cannot exceed 66 percent and foreign investors cannot directly own agricultural land, but agricultural investments can still be classified as “offshore” if they meet the export threshold. “Onshore” investment caps foreign equity participation at a maximum of 49 percent in most non-industrial projects. “Onshore” industrial investment may have 100 percent foreign equity, subject to government approval. Pursuant to the 2016 Investment Law (article 4), a list of sectors outlining which investment categories are subject to government authorization (the “negative list”) was set by decree on May 11, 2018. The sectors include natural resources; construction materials; land, sea and air transport; banking, finance, and insurance; hazardous and polluting industries; health; education; and telecommunications. Per the decree, if the relevant government decision-making body does not respond to an investment request within a specified period, typically 60 days, the authorization is automatically granted to the applicant. The decree went into effect on July 1, 2018. Other Investment Policy Reviews The WTO completed a Trade Policy Review for Tunisia in July 2016. The report is available here: https://www.wto.org/english/tratop_e/tpr_e/tp441_e.htm . The OECD completed an Investment Policy Review for Tunisia in November 2012. The report is available here: http://www.oecd.org/daf/inv/investment-policy/tunisia-investmentpolicyreview-oecd.htm . Business Facilitation In May 2019, the Tunisian Parliament adopted law 2019-47, a cross-cutting law that impacts legislation across all sectors. The law is designed to improve the country’s business climate and further improve its ranking in the World Bank’s Doing Business Report. Moreover, the law simplified the process of creating a business, permitted new methods of finance, improved regulations for corporate governance, and provided the private sector the right to operate a project under the framework of a public-private partnership (PPP). This legislation and previous investment laws are all referenced on the United Nations Conference on Trade and Development (UNCTAD) website: https://investmentpolicy.unctad.org/country-navigator/221/tunisia . The World Bank Doing Business 2020 report ranks Tunisia 19 in terms of ease of starting a business. In the Middle East and North Africa, Tunisia ranked second after the UAE, and first in North Africa ahead of Morocco (53), Egypt (114), Algeria (157), and Libya (186): https://www.doingbusiness.org/en/data/exploreeconomies/tunisia#DB_sb . The Agency for Promotion of Industry and Innovation (APII) and the Tunisia Investment Authority (TIA) are the focal point for business registration. Online project declaration for industry or service sector projects for both domestic and foreign investment is available at: www.tunisieindustrie.nat.tn/en/doc.asp?mcat=16&mrub=122 . The new online TIA platform allows potential investors to electronically declare the creation, extension, and renewal of all types of investment projects. The platform also allows investors to incorporate new businesses, request special permits, and apply for investment and tax incentives. https://www.tia.gov.tn/ . APII has attempted to simplify the business registration process by creating a one-stop shop that offers registration of legal papers with the tax office, court clerk, official Tunisian gazette, and customs. This one-stop shop also houses consultants from the Investment Promotion Agency, Ministry of Employment, National Social Security Authority (CNSS), postal service, Ministry of Interior, and the Ministry of Trade. Registration may face delays as some agencies may have longer internal processes. Prior to registration business must first initiate an online declaration of intent, to which APII provides a notification of receipt within 24 hours. The World Bank’s Doing Business 2020 report indicates that business registration takes an average of 9 days and costs about USD 90 (253 Tunisian dinars): http://www.doingbusiness.org/en/data/exploreeconomies/tunisia#DB_sb . For agriculture and fisheries, business registration information can be found at: www.apia.com.tn . In the tourism industry, companies must register with the National Office for Tourism at: http://www.tourisme.gov.tn/en/investing/administrative-services.html . The central point of contact for established foreign investors and companies is the Foreign Investment Promotion Agency (FIPA): http://www.investintunisia.tn . Outward Investment The GOT does not incentivize outward investment, and capital transfer abroad is tightly controlled by the Central Bank. Ukraine 1. Openness To, and Restrictions Upon, Foreign Investment Policies Towards Foreign Direct Investment The government of Ukraine actively seeks FDI. In 2014, the National Investment Council was established as a consultative and advisory body under the president, and in 2016 the Ukrainian government established an investment promotion office UkraineInvest, with a mandate to attract and support FDI. Ukraine also established a Business Ombudsman in 2015 to provide a forum for domestic or foreign businesses to file complaints about unjust treatment by state or municipal authorities, state-owned or controlled companies, or their officials. Ukraine has made attracting investment a top priority for 2020. Accordingly, this year it launched various incentive programs to increase investment. President Zelenskyy has remarked on multiple occasions about his desire to have an ongoing dialogue with investors and has arranged various meetings with Ukrainian businesses and foreign business associations such as the American Chamber of Commerce and the European Business Association. Limits on Foreign Control and Right to Private Ownership and Establishment The regulatory framework for the establishment and operation of business in Ukraine by foreign investors is generally similar to that for domestic investors. Registering a foreign investment is governed by “The Law on Foreign Investments” (2013). Before registering their business, non-Ukrainian citizens must register with the Office of Immigration in the Ministry of Foreign Affairs and receive a taxpayer identification number through the State Fiscal Service. The accreditation process for representative offices of foreign companies and their branches is has been historically slower and more costly than the simplified registration process for Ukrainian businesses. Legislation was adopted in November 2019, however, that reduced the cost of accreditation for foreign representative offices (excluding Russian businesses) from $2,500 to one minimum monthly wage (which in 2019 was approximately $70) and the timeframe from 60 to 20 days. The Ministry of Economic Development, Trade, and Agriculture issues these accreditations. Foreign and domestic private entities can engage in all forms of remunerative activity, with some exceptions: foreign companies are restricted from owning agricultural land, producing bio-ethanol, and some publishing activities. In addition, Ukrainian law authorizes the government to set limits on foreign participation in state-owned enterprises, although the definition of “foreign participation” is vague, and the law is rarely used in practice. Certain critical infrastructure, especially in the energy sector, is precluded by law from private ownership and therefore not available to foreign investors. This includes the gas transmission system, electricity grids, and various plants and factories. Ukraine currently reviews merger and acquisition investments only on competition grounds, but is considering a mechanism for investment review on security grounds. According to Ukraine’s investment promotion office, UkraineInvest, foreign direct investments are reviewed on an ad hoc basis by the Cabinet of Ministers if concerns arise, but there is no formal process in place. Other Investment Policy Reviews The Organization for Economic Cooperation and Development (OECD) and the World Trade Organization (WTO) conducted formal reviews in 2016, and can be found at OECD: http://www.oecd.org/investment/oecd-investment-policy-reviews-ukraine-2016-9789264257368-en.htm ; WTO: https://www.wto.org/english/tratop_e/tpr_e/tp434_e.htm . Business Facilitation Ukraine has taken major steps forward to facilitate the ease of doing business, and it moved up seven spots in the World Bank’s 2020 Doing Business Ranking from 71th place in 2019 to 64th. This is Ukraine’s largest annual leap since 2014 and the highest ranking the country has ever received. The country demonstrated improvements in six out of the ten indicators the World Bank assesses, scoring the highest in categories such as “starting a business” and “dealing with construction permits.” Legislation adopted in October 2019 on “Encouraging Investment Activity in Ukraine,” which abolished outdated and inefficient regulations, improved the protection of minority investors’ rights, and increased lending options for businesses is expected to further facilitate doing business in Ukraine. Private entrepreneurs and legal entities can register online at https://poslugy.gov.ua/ and https://online.minjust.gov.ua/dokumenty/choise/ . These online registrations systems are not commonly used because it is difficult to submit the required documents online. Once a company is registered with the State Registrar, its data is transferred by the registrar to the relevant state authorities, such as the State Committee of Statistics of Ukraine, the State Pension Fund, State Fiscal Service, the Employment Insurance Fund, the Social Security Fund, and the Fund for Social Insurance. Registering a joint-stock company or a limited liability company takes approximately six days. Outward Investment As of December 1, 2019, Ukraine’s investments in foreign countries totaled approximately $6.5 billion, according to data provided by the State Statistics Service of Ukraine. Individuals are limited to investing a maximum of EUR 50,000 ($56,000) abroad per year, and any investment exceeding this cap requires a license from the National Bank of Ukraine. Legal entities and private entrepreneurs registered in Ukraine have a cap of EUR 2 million ($2.24 million) per year. Edit Your Custom Report