Investment Legal Framework Applicable in the FSM to be further Streamlined
Palikir, Pohnpei (FSM Department of Resources & Development): August 13, 2009 - Participants to the Second Symposium on foreign investment laws and regulations applicable in the FSM that was held in Kosrae State from the 4th to the 6th of August 2009, agreed to further harmonize and make more transparent investment procedures in the country.
During the Symposium, Pohnpei State presented its proposed amendments to replaced, the current Foreign Investment Board with a Competent Authority (Administrator of Economic Affairs) in the near future, as is the case in the three other States, and to reduce the number of days to process a foreign investment permit application from 45 to 15 days. Chuuk State informed the participants that it is working towards removing the limitation on capital and profits' repatriation.
Participants also agreed to adopt a standardized definition of key concepts such as citizen, non-citizens, foreign investors, marine resources and senior management positions. The meeting further agreed to change the reporting period by foreign investors to the calendar year and to use the same format and template for collecting data on foreign investments. Finally, States were encouraged to consider using the current Program on Mediation in Kosrae State as a model to develop their own Alternative Dispute Resolution mechanism, so as to enhance the enforcement of business contracts in the FSM.
The Second Symposium on investment laws and regulations also considered investment strategy options for the FSM. Participants agreed that FSM investment strategy should prioritize import substitution, with the view of reducing the current trade deficit (-$126,469,000 in 2007); identify, pursue and utilize FSM comparative advantages, and protect infant industries.
Considering potential impacts of foreign investment on local businesses, the Symposium discussed strategies to promote local entrepreneurship in the FSM and the involvement of the private sector in decisions affecting their business. In this regard, the Symposium strongly recommended that National and State Governments should support local businesses that produce goods and services supplying local needs and sensitive products. Moreover, the private sector raised the need for further consultations on the proposed new Value Added Tax system.
The Second Symposium on investment laws and regulations in the FSM was opened by the Governor of Kosrae State, the Honorable Robert Weilbacher, and was attended by representatives from the National and States Governments, the FSM Congress, Pohnpei and Kosrae States' Legislatures, the Presidents and Chairman of Chambers of Commerce, and a Consultant from the Pacific Islands Forum Secretariat.
For further information on this release, please contact:
FSM Office of the President Public Information: Press, Radio, Video P.O Box 34 Palikir Station, Pohnpei, FM 96941 Tel.: (691) 320-2548/2092 Fax.: (691) 320-4356 e-mail: email@example.com http://www.fsmpio.fm/