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FSM National and States Governments review their existing Foreign Investment Laws and Regulations in view of improving the business climate in the FSM

Palikir, Pohnpei (FSM Information Services): May 4, 2009 - Following a three day symposium that ended Friday, April 30^th in Palikir, Pohnpei, the FSM National and States Governments agreed to further review their existing foreign investment laws and regulations applicable in the FSM, in order to improve the business climate in the FSM in general, and make it more conducive to attract foreign investors, with the ultimate objective of enhancing FSM economic development.

Participants to the symposium agreed to:

• Standardize the definitions of concepts in Foreign Investment Acts and Regulations applicable in the FSM;

• Review economic sectors prohibited in the FSM, those reserved for local entrepreneurs (Red list) and those opened to foreign investors (Amber list);

• Review and clearly specify conditions for economic sectors listed in their Amber list;

• Continue and complete the land registration process commenced under the ADB Private Sector Development Project;

• Review the applicable fee structures in view of developing a multi-tier fee structure depending on the size of the investment;

• Review process within the period of 20 working days;

• Review their penalties and fines' structures in view of developing a multi-tier penalty structure that would take into account the size of the investment.

• Review their penalties and fines' structures in view of developing a multi-tier penalty structure that would take into account the size of the investment;

• Review and link existing minimum capital requirement to economic sectors listed in their Amber lists.

More specifically, Pohnpei State expressed its wishes to adopt the same competent authority structure to review foreign investment permit applications as other jurisdictions. It was also encouraged to adopt and incorporate provisions on confidentiality and transparency in its legislation and regulations similar to those of the other entities.

Chuuk State was required to review its legislation in view of removing the restriction on repatriation of capital and profits, to make its legislations similar to those of other entities.

A follow-up meeting would be convened in July 2009 to assess the implementation of recommendations.

This symposium was opened by FSM President, H.E Manny Mori. Representatives from the FSM National and States Government, Members of state legislatures, and representatives from the private sector attended the symposium, which featured various presentations including those from Ambassador Liu Fei, of the P.R. China, Ms. Janet Whitaker, Second Secretary at the Australian Embassy, Mr. Carl-Heinz "Jason" Wemhoener-Cuite, Economic/Consular Officer of the US Embassy, Mr. Okean Ehmes from the UN Joint Presence Mission in the FSM, and Mr. Don Jacobson, Head of the PSD Unit at the Pacific Islands Forum Secretariat (PIFS).

For more information, please contact the Department of Resources and Development at telephone number (691) 320-5133.