For international businesspersons and investors exploring the opportunities to invest wisely and trade equitably in an island paradise, the Federated States of Micronesia is such a place.
The FSM became fully self-governing in the fall of 1986 and was admitted to the United Nations in September of 1991. As a matter of choice, the FSM opted to maintain a close relationship with the United States by entering into a long-term treaty agreement called the Compact of Free Association. With the implementation of the treaty, the Federated States fulfilled its collective will to take charge of its own destiny.
Under the Compact Treaty and separate Bilateral Agreements, the United States agreed to defend the FSM as it would defend itself and its citizens and to provide unique packages of financial assistance and investment incentives.
The potential for development in the FSM is immense. The FSM's 200 mile EEZ encompasses more than 1 million square miles of ocean, teeming with the world's largest tuna stock, and a total land area of 281.3 square miles.
Sitting gem-like in the vast setting of the Pacific Ocean - some 2,400 miles north of Australia, 2,000 miles southeast of Japan, and 2,500 miles southwest of Hawaii, the FSM is relatively unheard of. The islands of the Federated States of Micronesia remain to this day an almost virgin territory - one of the last real frontiers on the planet.
Both local and international investors are offered a unique blend of advantages: clean environment, favorable economic and social circumstances and a sincere commitment to free market enterprise philosophy. Investment incentives and other packages of financial assistance under the treaty with the United States reinforce the commitment to free enterprise and help pave the way to self-sufficiency.
In short, the Federated States of Micronesia is definitely the place to invest, live and work.
18 Reasons to Invest in the FSM
FSM Policy on Foreign Investment
The Federated States of Micronesia welcomes foreign investments, aware that foreign capital, management, and technology are critical to the country's development. Preference is given to investments that are constructive and healthy.
Within the National and State Development Plans, the FSM is committed to the acceleration of industrial development. It seeks to encourage capital inflow from abroad, and to ensure that both the foreign and domestic investors and the country profit through the processes of growth and expansion. Investment in the FSM should:
The development plan for the FSM places high emphasis on the role of the private sector in the development of the country. This emphasis is reinforced by the objective set forth in the plan for manufacturing and industrial sectors. The plan mandates that the government will work to:
Establishing a Business in the FSM
Conducting business in the FSM is similar to operating a business in the US because FSM business laws have been modeled after those in the US.
Businesses may operate as sole proprietorships, partnerships or corporations. Whatever its form, FSM laws do not require local citizens to share in the ownership of the business if a foreign investor prefers 100% ownership. The preferred approach, however, is for outside investors to enter into joint ventures with local partners. Foreign investment permit regulations, for example, require that consideration be given during the review process to the extent of local ownership in the business.
The reality of the situation is that participation of a FSM citizen partner will, in all but the most unusual situation, be beneficial to the outside investor.
The FSM Government will assist investors who request for assistance in identifying prospective local citizen partners, although investors are also free to do so on their own.
Investors to choose to manage their investments in the FSM will need foreign investment permits to reside in the country for the duration of their investment. If ownership in the business is 20% or less, such an investor is required to secure work permits.
For more information on investing or establishing a business in the FSM, please contact the following national or state agencies: