Commission looks to combine foreign investment laws
Issues concerning the “use of customary land to set up foreign businesses” and the influx of foreign businesses into Samoa has led the Samoa Law Reform Commission (S.L.R.C.) to look into the Foreign Investment Act 2000.
This was confirmed by Ulupale Fuimaono, Assistant Executive Director in response to Samoa Observer questions last month.
Fuimaono said the Foreign Investment Act, 2000, promotes foreign investment and regulates investments by guaranteeing the rights of citizens to participate in the economy of Samoa. He said the concerns expressed by Samoan citizens in the newspapers, TV news and social media have been noted.
According to Fuimaono, another major issue is the scattered nature of Samoa’s foreign investment provision which is in five different pieces of legislation.
“These include the Foreign Investment Act 2,000; the Company’s Act 2001, Business License Act 1998; Foreign Investment Regulations 2011; Citizenship Investment Act 2015."
“Accordingly, there is a need to consolidate these legislations into one law to streamline processes, create a uniform and improve understanding, accessibility and use of foreign investment in Samoa."
“Other issues include the types of businesses foreign investors can invest, use of customary land to set up foreign businesses and criteria for eligibility and enforcement."
“Consequently, this prompts the need for Samoa to revisit Samoa’s law to ensure it is workable, robust and promotes the need of the government and our communities whilst attracting investment from overseas,” said Fuimaono.
He further pointed out that Solomon’s Islands consolidated into one legislation its foreign investments provisions which were originally scattered into three different laws. Fuimaono said for Solomon Island’s the move was to address the lengthy and costly approval processes for foreign investors and to make it easier for investors to ascertain what laws applied.
“In 2015 the Cook Islands simplified its 1995 Development Investment Act to clarify eligibility criteria for foreign investors. For example, prohibition of any foreign businesses - a business with more than third foreign ownership, to carry on business in the Cook Islands in any activity unless it is registered."
“Tonga in 2014 reformed its foreign investment laws (i.e Foreign Investment Act 2002) and policies to attract foreign investors through developing investor-friendly policies and introducing new incentives to key growth areas.”
According to the Assistant Executive Director, the Commission considers it important to revisit its current legal framework.
“This will ensure that its law is adequate comprehensive, robust, and effective in promoting economic development and most importantly protecting the interest of our local population.”
Fuimaono says they anticipate the challenges with revisiting the current framework.
“For example, promoting economic development without compromising the interest of Samoan citizens, imposing control measures and regulations to protect the local economy without discouraging foreign investments as well as streamlining procedures and processes for application.”
The S.L.R.C. will look at whether it’s appropriate to consolidate Samoa’s foreign investment laws into one legislation similar to other legislation.
“Adequacy of current provisions of the law and relevant issues; eligibility criteria and application processes and enforcement.”
Also Fuimaono notes the need to consider similar laws in the Pacific Region and abroad and their effectiveness.