New Foreign Investment Act reserves certain businesses for Tongans only [1]
Thursday, May 10, 2007 - 20:16. Updated on Tuesday, May 20, 2014 - 19:24.
Tonga's first Foreign Investment Act that came into force in April has reserved 13 business activities for Tongan operators only, including certain types of farming and fishing, as well as wholesaling, baking, taxi operation, and other activities.
The Foreign Investment Regulations 2006 were gazetted with the Foreign Investment Act 2002 that came into force on April 2, 2007.
The Act regulates the activities that foreign investors may undertake in Tonga. The Reserved List includes taxis; passenger vehicles for hire; used motor vehicle dealers; retailing activity which consists of distribution of grocery products (food and household provisions); wholesaling activity; baking of white loaf bread; Tongan cultural activities; raising of chickens for the production of eggs; security business; export of green and mature coconuts; wiring and installation of residential and commercial buildings with capital investment of less than $500,000.
The production or farming of root crops such as yams, taro, sweet potato, and cassava, as well as farming squash, paper mulberry, pandanus and kava is also reserved for Tongans only.
Fishing activities on the Reserved List include reef fishing, inshore fishing within 12nm (Zone C) in water less than 1000 meters and bottom fishing in water depth less than 500m.
Certificates required
Masieni Fukofuka an Industrial officer at the Industry Division of the Ministry of Labour said today, that this the first time that such an act has been established for Tonga to regulate foreign investors and to clearly identify certain activities reserved for Tongans.
She said that prior to the act there was nothing in place to regulate foreign investors and they did not have to seek permission, now under the new act they are legally required to get a certificate from the Ministry.
But any activities that are not on the Reserved List remain open for foreign investors but they still have to get a certificate, she said.
Masieni said that there is also a Restricted List identified in the act, which consists of business activities that foreign investors can operate but there are certain restrictions that they have comply with first.
This applies to commercial fishing like tuna fishing, bottom fishing, deep-water fishing and aquaculture. Other activities include agricultural supply stores that are distributing seeds, fertilisers and chemicals. Education facilities and medical and health activity is also subject to certain restrictions.