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Executive Report on Strategies in Fiji
ICON Group International, June 2007, Pages: 388
How to Strategically Evaluate Fiji
Perhaps the most efficient way of evaluating Fiji is to consider key dimensions which themselves are composites of multiple factors. Composite portfolio approaches have long been used by strategic planners. The biggest challenge in this approach is to choose the appropriate factors that are the most relevant to international planning. The two measures of greatest relevance are “latent demand” and “market accessibility”. The figure below summarizes the key dimensions and recommendations of such an approach. Using these two composites, one can prioritize all countries of the world. Countries of high latent demand and high relative accessibility (e.g. easier entry for one firm compared to other firms) are given highest priority. The figure below shows two different scenarios. Accessibility is defined as a firm’s ease of entering or supplying from or to a market (the “supply side”), and latent demand is an indicator of the potential in serving from or to the market (the “demand side”).
Framework for Prioritizing Countries
Demand/Market Potential Driven Firm
Relative Accessibility
Accessibility/Supply Averse Firm
Relative Accessibility
In the top figure, the firm is driven by market potential, whereas the bottom figure represents a firm that is driven by costs or by an aversion to difficult markets. This report treats the reader as coming from a “generic firm” approaching the global market - neither a market-driven nor a cost-driven company. Planners must therefore augment this report with their own company-specific factors that might change the priorities.
Latent Demand and Accessibility in Fiji
This report provides an extremely detailed overview of factors driving latent demand and accessibility in Fiji. Latent demand is largely driven by economic fundamentals. But, latent demand only represents half of the picture. A country may at first sight appear to be attractive due to a high latent demand, but it is often less attractive when one considers at the macro level how easy it might be to serve that entire potential and/or general business risks.
Chapter 2 deals with macro-accessibility. While accessibility will always vary from one company to another for a given country, the following domains are typically considered when evaluating macro-accessibility in Fiji:
Openness to Trade in Fiji
Openness to Direct Investment in Fiji
Local Marketing and Entry Strategy Alternatives
Local Human Resources
Local Risks
Across these domains, a number of not-so-obvious factors can affect accessibility and risk. These are also covered in Chapter 2, which is presented from the perspective of an American firm, though it is equally applicable to most firms entering Fiji. This chapter has been authored by local offices of the U.S. Government. I have included a number of edits to clarify the provided information as it relates to the general strategic framework.
In Chapter 3, I summarize the economic potential for Fiji over the next five years for hundreds of industries, categories, and products. The goal of this chapter is to report my findings on the real economic potential, or latent demand, represented by Fiji when defined as an area of dominant influence. The data presented are the result of various spatial econometric and time-series forecasting models which, for each category presented, are applied to forecast and allocate latent demand across all countries of the world and major distribution centers or centers of dominant influence within each country. This is accomplished knowing that economic fundamentals (e.g. income) generally vary from one country to another within a given country over time. In this chapter, I report the allocation for each category for Fiji as an area of dominant influence in Oceana and, potentially, the world.
The report concludes with trade indicators for Fiji. Often, the amount of trade flowing into and out of a country is a strong indicator of trading partners, trade openness, and related latent demand. Trade indicators are purely statistical in nature. Although international trade is not a direct measure of latent demand, it does provide an indicator of general market conditions with respect to trade flows and trade openness in Fiji.
As a whole, this report presents a strategic assessment of Fiji by considering an extremely broad set of factors affecting both latent demand and accessibility, as outlined in the following chapters.
MACRO-ACCESSIBILITY IN FIJI
Economic Fundamentals and Dynamics
Government Intervention Risks
Marginal income taxes have been reduced. Top individual and corporate income tax rates are around 35%. A value-added tax of 10% was introduced in 1992 to reposition the tax base to a consumption-based approach, eliminating a wide variety of different general and specific excise and sales taxes. Wage policy has been reoriented to allow wage setting to occur at the establishment level, with the overall objective of enhancing Fiji’s international competitiveness. Subsidies and concessions largely have been reduced, though some tax holidays for export industries and the tourism sector continue.
Infrastructure Development
Infrastructure support is fairly reliable in Fiji. There are numerous air and sea connections to the U.S., Asia, and the Pacific Region, as well as local air and sea transport to all major centers on the larger islands in the country. The power generating capacity on the two main islands has been increased with the installation of diesel generators in the capital city, Suva. The Fiji Electricity Authority (FEA), in anticipation of higher future demand for energy, has budgeted an estimated F$350 million (US$202.5million) investment to be utilized over 2005-2010. Independent power production is planned for isolated regions. All new power generating sources must be renewable and must be accomplished in cooperation with the government electric, sugar or timber authorities. Fiji is exploring hydro, solar, wind and wave energy generation, and hybrids.
Domestic and international communication links are relatively reliable, although fax, Internet and paging services are expensive and sometimes subject to intermittent disconnections. Other services, such as travel, insurance, banking, accounting, local transport, sewage and real estate are available in urban centers.
Major infrastructure projects under way in Fiji are led by highway and major bridge construction. The telecommunication industry has been enhanced with a cellular telephone network (a US$7.1 million investment) by the Fiji-British joint venture operation of Vodafone (Fiji) Limited. Generally, the state of infrastructure for goods and services distribution is good.
Marketing Strategies
Market entry strategies include direct marketing, participation in major nationally funded projects, agent/distributorship, license/technology transfers, franchise arrangements, joint ventures and wholly owned subsidiaries/branches.
The most common strategies used by U.S. firms are direct marketing and/or the use of sales representatives. Various U.S. firms are represented through independent contractors who act as distributors. There are a few firms operating under license and franchise agreements, e.g., McDonalds, Coca-Cola and Johnson & Johnson. Marketing under license and franchise arrangements, however, is not common because of the limited size of the market.
In formulating a proposal to set up business in Fiji, U.S. firms need to determine which form of business is the most appropriate to their needs. The following are the primary forms of business organization used in Fiji: -- companies, including branch offices; -- joint ventures; -- partnerships; and -- trading trusts. U.S. firms may elect either to incorporate a subsidiary or establish a branch office by registering itself as a foreign company. Both approaches are regulated under Fiji’s Company Law. U.S. firms may wish to enter into joint venture arrangements with one or more parties on an unincorporated or incorporated basis.
Advertising and trade promotions through the media are effective sales techniques.
Agents and Distributors
The Fiji Government and some local companies are interested in establishing arrangements with foreign companies.
The General Contract Law governs agreements between foreign suppliers and local agents and distributors. It establishes a buyer-seller relationship under a sale of goods contract between the two parties. It is the responsibility of the local agent or distributor to apply for necessary licenses and import permits.
New market entrants should seek an established agent/distributor with good local contacts, market expertise and technical know-how. U.S. exporters must often provide training, marketing and technical support. Frequent contact with local representatives is critical, especially at the outset, in order to build a good working relationship based on shared values and objectives, and to ensure there is no misunderstandings or communication problems.
The Commercial Section at the U.S. Embassy in Suva can provide valuable assistance in locating potential representatives and acquiring preliminary market data. The staff can also help companies identify agents and distributors.
Creating a Sales Office
The primary forms of business organizations in Fiji are: companies, including branch offices; joint ventures; partnerships; and trading trusts.
U.S. firms may elect either to incorporate a subsidiary or establish a branch office by registering itself as a foreign company. Both approaches are regulated under Fiji’s Company Law. U.S. firms may wish to enter into joint-venture arrangements with one or more parties on an unincorporated or incorporated basis.
Fiji Islands Trade & Investment Bureau (FTIB)
Chief Executive
P.O. Box 2303
Government Buildings Suva
Telephone: (679) 3315-988
Fax: (679) 3301-783
E-mail: ftibinfo@ftib.org.fj
Franchising Activities
There are no restrictions placed by the Fiji government on franchising arrangements. McDonalds, KFC, Coca-Cola and Johnson & Johnson are firms operating in Fiji under franchise agreements. Market size imposes some limitations in Fiji, but many companies use Fiji as an export base to other Pacific Island countries.
Direct Marketing Options
Direct marketing is used widely in the sale of cosmetics, health products, cleaning and household consumer goods, electrical appliances, and in service businesses. Major U.S. brands in Fiji are Tupperware, Amway, Nu-Skin and Avon.
Joint Ventures and Licensing Options
Joint ventures are encouraged in Fiji to stimulate local entrepreneurship.
Joint ventures and licensing agreements are important market entry strategies for American exporters. Joint-venture partnerships offering technology transfer, specialized expertise, and training opportunities are effective mechanisms to reduce costs.
Some Fiji firms are actively seeking U.S. joint-venture partners, who can provide much needed capital, as well as technical, marketing and management skills to a business relationship. Fiji firms generally offer assets, local vendor and government contacts, and established business relationships throughout the Pacific region.
The Commercial Section at the U.S. Embassy in Suva can provide assistance in locating potential joint-venture partners for American companies.
Public Sector Marketing
All requests for proposals and tenders are offered in newspapers and in government publications. Multilateral lending institutions, such as the ADB and World Bank, also sometimes sponsor projects, all open to U.S. bidders.
Distribution Channel Options
Two major channels of distribution are available to U.S. exporters. The first is via large, well-established trading companies with strong financial resources and sales volumes, as well as an extensive presence in many industrial sectors. in many cases, these large traders form marketing or production joint ventures with foreign firms when import volumes are sufficient to justify local investment. in highly specialized markets, these companies rely on agents who have appropriate contacts or expertise.
The second available channel is through small importers. These importers generally specialize in one line of business where they have proven networks and market know-how.
It is advisable for U.S. companies to perform careful due diligence to assure that a potential agent or distributor is financially healthy and able to fulfill obligations.
Selling Strategies
To differentiate themselves from local and third-country competitors, U.S. firms should emphasize their strengths in quality, innovation, technology and customer service.
Fijians have come to expect more and better styles and designs, regular product upgrades and updated technology from U.S. companies, and will often choose U.S. products and services on the basis of “value for money”, not by cost factors. Training is an effective means to make potential customers aware of the quality of products and services.
Electronic Commerce
Despite the development of the country’s ITC infrastructure, an increased access to Internet, and lowered costs, electronic commerce still has a limited market reach.
Advertising and Trade Promotion
The majority of Fijians receive information from radio and television. Advertising and trade promotions are important marketing tools in Fiji. in particular, foodstuffs and consumer products should be promoted heavily via a full range of mass media.
There are three major English-language newspapers, “The Fiji Times,” “Fiji’s Daily Post” and “The Fiji Sun,” which largely cater to an urban readership. The Fijian language newspaper “Nai Lalakai” and “Volasiga” can be used for marketing to the Fijian sector of the population, and the Indian-language newspaper “Shanti Dut” for Indo-Fijians.
Companies in Fiji also use two monthly magazines, “Pacific Business” and “Review” for advertising.
Special promotional campaigns are frequently conducted at local shopping centers, hotels and convention halls. Movie theaters and television are also means of reaching the public. It is advisable to translate all product literature and technical specifications into Fijian or Hindustani, Fiji’s other two main languages.
Advertising Contacts
The Fiji Times
Mr. Tony Yianni, Publisher
P.O. Box 1167
Suva
Telephone: (679) 3304-111
Fax: (679) 3301-521
E-mail: timesnews@fijitimes.com.fj
Web site: www.fijitimes.com.fj
Daily Post
Mr. Fred Wesley, Act. Publisher/Editor
P.O. Box2071
Government Buildings
Suva
Telephone: (679) 3313-342
Fax: (679) 3313-320
E-mail: dailypostfijinews@yahoo.com
Fiji Sun
Michael Richards, CEO & Publisher
Tel.: 3307-555
Fax: 3311-455
E-mail: fijisun@sun.com.fj
Web site: www.sun.com.fj
Fiji TV
Mr. Mesake Nawari, Chief Executive Officer
20 Gorrie St.
Suva
Telephone: (679) 3305-100
Fax: (679) 3305-077
E-mail: info@fijitv.com.fj
Web site: www.fijitv.com.fj
Communications Fiji Ltd.
Telephone: (679) 3314-766
Fax: (679) 3303-748
E-mail: news@fm96.com.fj
Web site: www.fijivillage.com
Fiji Broadcasting Corporation Ltd.
Mr Francis Herman, Chief Executive
P.O. Box 334
Suva
Telephone: (679) 3314-333
Fax: (679) 3307-215
Web site: www.radiofiji.com.fj
Pricing Issues
The Prices and Incomes Board, a statutory arm of the Ministry of Finance, controls prices of certain basic goods. Otherwise, competition controls prices.
Prices & Incomes Board
G.P.O Box 1312
Suva
Telephone: (679) 3309-266
Fax: (679) 3303227
E-mail: pibhq@connect.com.fj
Supplying Customer Service
All businesses operating in Fiji need to provide warranty service, maintenance contracts for parts and supplies, and return policies.
Intellectual Property Risks
All U.S. firms entering Fiji should protect themselves by registering their intellectual property. A local attorney that specializes in this area can initiate legal actions to combat piracy. The Copyright Act of 1999 protects products from intellectual property infringement, but enforcement is weak.
Performing Due Diligence and Checking Bona Fides
Businesses and investors can hire professional accountancy companies to do due diligence and check bona fides of any company with which they plan to work. There are a number of reputable accountancy firms to provide this service.
Hiring Local Counsel
The services of a local attorney are required for executing agreements and setting up offices in Fiji. Normally paperwork can be completed quickly and easily. Law firms also advise on the various types of business organizations that can be established, assist in registering firms and in obtaining permits. Lawyers are needed for registering patents and trademarks and for taking other legal measures to protect products from intellectual property right infringements.
Marketing Web Resources
The Fiji Times
Web site: www.fijitimes.com.fj
Daily Post
E-mail: dailypostfijinews@yahoo.com
Fiji Sun
Web site: www.sun.com.fj
Fiji Broadcasting Corporation Ltd.
Web site: www.radiofiji.org
Fiji TV
Web site: www.fijitv.com.fj
Fiji White Pages
Web site: www.whitepages.com.fj
Fiji Yellow Pages
Web site: www.yellowpages.com.fj
Fiji Islands Trade and Investment Bureau (FTIB)
Web site: www.ftb.org.fj
Fiji Government
Web site: www.fiji.gov.fj
Import and Export Regulation Risks
Trade Barrier Risks
For exporters to Fiji, import licenses are not required for most goods. Most imports are subject to duty. A single-line tariff system is employed. Drawback of duty is claimable for duty on re-exported goods.
Chief Executive Officer
Ministry of Commerce
Business Development and Investment
P.O. Box 2118
Government Buildings
Suva
Telephone:(679) 3305-411
Fax: (679) 3302-617
Director General
Fiji Islands Customs Service
GPO Box 175
Suva
Telephone: (679) 3302-322
Fax: (679) 3305-138
Web site: www.frca.org.fj/customs/
Import Tariffs and License Requirements
The Quarantine Division of the Ministry of Agriculture, Sugar and Land Resettlement must license certain types of agricultural imports, such as rice, poultry and meat. The Ministry of Finance and Public Enterprises issues import licenses for gold and other precious metals. for products such as lubricants, transformer and circuit breaker oils, cleansing oils and hydraulic brake oils, import licenses are issued by the Ministry of Commerce, Business Development & Investment.
Temporary Entry of Goods
There are arrangements for the temporary import of goods for alteration or repair, or for public exhibition, trial or entertainment; of goods not normally available in Fiji to be used solely in connection with some particular project; and of goods for use by temporary residents. The Fiji Islands Customs Service or local Customs Agents need to be contacted prior to the arrival of goods.
Labeling Issues
All goods imported from the United States must have a Made in U.S.A. label; if a garment, the washing instructions must be attached. Fabric content must also be displayed.
For packaged goods, quality certification and weight must be on the label.
The company that made the goods must also be shown on the labels.
For more information contact:
Fair Trading Department
Ministry of Commerce
Business Development and Investment
P.O. Box 2118
Government Buildings
Suva
Tel: (679) 3305-411
Fax: (679) 3302-617
Restrictions on Imports
Prohibited imports include weapons, illegal drugs and pornography. for more information, contact:
Director General
Fiji Islands Customs Service
GPO Box 175
Suva
Telephone: (679) 3302-322
Fax: (679) 3305-138
Web site: www.frca.org.fj/customs/
Customs Regulations and Contact Information
All imports into Fiji are subject to classification by the Fiji Islands Customs Service, and rates of duty vary with the type of goods. Imports are subject to import duty (Fiscal Duty and VAT), which is levied in accordance with rates outlined in the schedule of customs tariffs. VAT is fixed at 12.5%; however, there are nominal rates of 3% for a number of tourist-oriented products (e.g. electronic hi-fi equipment). Duty at a higher rate is generally levied on automobiles, ready-made garments, tobacco, liquor, beer and wines.
For customs requirements:
Director General
Fiji Islands Customs Service
GPO Box 175
Suva
Telephone: (679) 3302-322
Fax: (679) 3305-138
Web site: www.frca.org.fj/customs/
For standards and quality control:
Fair Trading Office
Ministry of Commerce
P.O. Box 2118
Government Buildings
Suva
Telephone:(679) 3305-411
Fax: (679) 3302-617
For quarantine requirements:
Chief Executive
Ministry of Agriculture
Private Mail Bag
Suva
Telephone: (679) 3384-233
Fax: (679) 3385-048
For general questions on trade regulations, customs and standards:
Chief Executive
Fiji Islands Trade and Investment Bureau
P.O. Box 2303
Government Buildings
Suva
Telephone: (679) 3315-988
Fax: (679) 3301-783
Email: ftibinfo@ftib.org.fj
Web site: www.ftib.org.fj
Local Standards
In 1992, the Fiji Trade Standards and Quality Control Office (FTSQCO) was established by the Trade Standards and Quality Control Decree 1992, to ensure that Fiji’s products and services standards are aligned to international standards.
The Trade Standards Advisory Council (TSAC) was formed in conjunction with FTSQCO. The role of the TSAC is to consider and recommend to the Minister for Commerce, Business Development & Investment the declaration of standards specifications, including processes, practices, quality, composition, labeling, and codes of practices as Fiji islands standards.
Standards Organizations
The FTSQCO is the only standards-setting organization in Fiji and is a full member of the International Organization for Standardization (ISO) since January 1, 2006.
NIST Notify U.S. Service
Member countries of the World Trade Organization (WTO) are required under the Agreement on Technical Barriers to Trade (TBT Agreement) to report to the WTO all proposed technical regulations that could affect trade with other member countries. Notify U.S. is a free, Web-based e-mail subscription service that offers an opportunity to review and comment on proposed foreign technical regulations that could affect your access to international markets. Register online at: http://www.nist.gov/notifyus/.
Conformity Assessment
At present there are no conformity assessment bodies.
The National Trade Measurement Laboratory is the only national testing laboratory in place. However, manufacturers needing products tested send them to an accredited laboratory in Australia or New Zealand, or to the University of the South Pacific’s Institute of Applied Science (USP/IAS) laboratory, which is ISO 17025 certified.
Accreditation
Water bottled in Fiji must be accredited. The Bottled Water Standard requires that facilities bottling water in Fiji provide test results from approved laboratories for accreditation.
Publication of Technical Regulations
There are approximately 60 standards in place covering areas such as: building and building material, telecommunication cabling, safety footwear, electrical installation, quality management systems, food, fuel, corporate governance, bottled water and fireworks. However, the majority of the standards have been adopted from Standards Australia as best practice standards and are voluntary. Two mandatory standards are the Bottled Water Standard Order 2004 and the Fireworks Labeling Standard 2005.
All technical regulations are published in the Fiji Islands Gazette.
Adherence to Free Trade Agreements
Fiji manufacturers enjoy preferential access under three trade agreements: The South Pacific Regional Trade and Economic Agreement (SPARTECA), granting preferential access to Australia and New Zealand; the ACP-EU Cotonou Convention (previously known as the Lome Convention) between the members of the African/Caribbean/Pacific group and the European Community; and the U.S. Generalized Systems of Preferences (GSP).
The value of SPARTECA is eroding as Australia’s and New Zealand’s tariffs decline. Also, the price set under the Sugar Protocol of Lome Convention IV will be reduced over time towards the world-market price. Under GSP arrangements, Fiji enjoys preferential access for a range of exports to the United States. It enjoys similar arrangements with Japan and other industrialized countries.
Import and Export Web Resources
Fiji Islands Trade and Investment Bureau (FTIB)
www.ftb.org.fj
Fiji Government
www.fiji.gov.fj
Fiji Government - Ministry of Foreign Affairs & External Trade
www.foreignaffairs.gov.fj
Fiji Islands Customs & Revenue Authority
http://www.frca.org.fj
Secretariat of the Pacific Community (SPC)
www.spc.org.nc
Pacific Islands Forum Secretariat
www.forumsec.org.fj
Investment Climate
Openness to Foreign Investment
Fiji generally welcomes foreign investment. Restrictions and conditions are designed to ensure the investment is desirable for Fiji’s development and the use of its resources. Fiji has a strong judiciary and contractual rights are generally upheld.
Fiji’s economy is shifting from a reliance on sugar and textiles to a focus on tourism and related industries. The textile industry has been in decline since global textile preferences were eliminated by the WTO in January 2005. The sugar industry is dependent upon inflated prices paid by the European Union (scheduled to be phased out beginning in 2008). There are currently several large-scale tourism investments taking place around the country with many hotel complexes expected to open in the next two to four years.
The Fiji Trade and Investment Bureau (FTIB) is responsible for the promotion, regulation and control of foreign investment in the interest of national development. FTIB pursues this task in conjunction with relevant government ministries. Government approval is required for all foreign investment in Fiji.
All businesses or enterprises with a foreign-investment component in its ownership are required to apply to the Chief Executive, Fiji Islands Trade and Investment Bureau, for the issuance of a Foreign-Investment Certificate. The following information is required:
Name of company, firm or enterprise;
Description of business activity being carried out by the company, firm or enterprise;
Location and address;
Capital structure;
Shareholding structure;
Total investment in fixed assets; and,
Total employment.
The Foreign Investment Act stipulates that the approval process for investment applications should take no longer than 15 working days.
Contact:
The Chief Executive
Fiji Islands Trade & Investment Bureau
P.O. Box 2303
Government Buildings
Suva
Telephone: (679) 3315-988
Fax: (679) 3301-783
E-mail: ftibinfo@ftib.org.fj
Web site: www.ftib.org.fj
Certain types of investment are subject to restrictions. Investment areas that have been reserved for Fiji Island nationals includes small scale business such as cafeterias, taxis/busses, handicrafts, tailoring, shoe repair, plumbing/electrical, plant nurseries, day-care, and veterinary services. Investors must meet certain conditions prior to investment in some other restricted industries. Fishing enterprises must have at least 30% local equity; agricultural enterprises require at least 40% local equity. Full listings of reserved and restricted areas can be found at http://www.ftib.org.fj/contents/invest_application_pro/invest_pro/FIA.pdf.
Foreign investors can acquire real estate. However, the land situation in Fiji is complex and only a small percentage of land is available for purchase. If the property is larger than one acre, the Minister of Lands must approve the purchase. There are industry-specific incentives for tourism, mining, film-making and audio-visual activities, boat building, fishing, logging and saw milling operations, and bus building.
Conversion and Transfer Policies
There are no restrictions on repatriation of capital, earnings, loan repayments etc; however, certain documentary requirements exist. A foreign investor who brings in funds or equipment from overseas to invest in Fiji and has fulfilled all regulatory requirements is guaranteed repatriation of investment profits and remaining capital.
The processing time for remittance applications is approximately 3 working days, provided all required documentation is provided. Remittance through parallel markets requires the prior approval of the Reserve Bank of Fiji.
Expropriation and Compensation
Under Section 40 of the Constitution and the Foreign Investment Act, a foreign investor has the same protection against compulsory acquisition of property as any other person. The foreign investor has the same right as a national enterprise of recourse to the courts and other tribunals of the Fiji Islands in respect of the settlement of disputes.
Expropriation has not historically been a contentious issue in Fiji.
Dispute Settlement
The legal system in Fiji developed from British law. Under the Constitution, the Fiji Islands Supreme Court is the final court of appeal. Both companies and individuals have recourse to fair legal treatment through the system of local and superior courts.
Laws govern all aspects of commercial transactions, including bankruptcy law, and the courts generally enforce these laws in a transparent and consistent manner. A foreign investor has the right of recourse to the courts and other tribunals of Fiji in respect of the settlement of disputes.
Past investment disputes have often focused on land issues, particularly in the logging and tourism sectors. Such disputes have been resolved through labor-management dialogue, government intervention, referral to compulsory arbitration, or through the courts.
Fiji is a party to the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States.
Performance Requirements and Incentives
Fiji’s investment incentives scheme was thoroughly reviewed in 2001 to ensure that incentives offered would be transparent, easily available, automatic and non-discretionary. Foreign investors can apply for incentives following registration with the FTIB.
To support the implementation of newly approved investments, FTIB has established a monitoring system to assist companies in obtaining necessary approvals to commence operations. The investing firm must ensure that commercial production begins within 12 months of the date of approval of the project.
Information on incentive packages for investors can be obtained from the FTIB. Incentives offered include some preferential tax treatment and duty free or low duty treatment of imported materials and equipment. The incentives also reflect the Fiji Government’s concerted efforts to develop tourism, the filmmaking and audiovisual industry, and the information technology industry. Fiji has been particularly active in encouraging foreign investment in the tourism and audio-visual industries.
Tourism-related incentives include investment allowances of 55% of approved cost on tourist boats/ships and approved building and expansion projects. for large hotel development, incentives under the Hotel Aids Act include duty free import of capital equipment and no corporate taxes for 20 years for capital investment exceeding F$40 million or 10 years for capital investment between F$10 and F$40 million. Film making and audio-visual incentives include a 15% tax rebate (to a maximum of F$3.75 million) on qualifying production expenditure in Fiji and between 125% and 150% tax concessions for qualifying investments in film, television and music productions, audio visual computer software, interactive Web sites, e-commerce and telecommunication operations. The government also offers incentives for the development of agriculture, forestry, information technology and rural businesses.
The Ministry of Commerce and Ministry of Foreign Affairs and External Trade control import and export policy. Commercial import policy includes consideration of tariff measures, import restrictions, quota arrangements and other policies designed to assist development of local industries.
Most imports are subject to import duty, which is levied at various rates in accordance with the Customs Tariff Act of 1986. Such duties may be waived or reduced upon eligibility for investment incentives. Most goods may be imported without an import license. However, there are restrictions on the import of a number of products to protect local industries or for the purposes of quarantine. The restrictions are absolute
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