There is no simpler word than corruption to describe the ongoing deals between locals who give their names to be used on business licenses by foreigners.

The most common businesses targetted by foreigners are retail stores and supermarkets. Why is it a problem? These businesses are reserved as Samoan-only businesses to give locals wealth-creation opportunities. This means that one has to be a citizen of Samoa before they can operate retail businesses.

However, this provision has been circumvented. Either locals are paid a nice hefty sum upfront and monthly payments or by marrying a local. In the latter case, even this has been known to happen in a way where large sums of money are paid.

The second case may be hard to prove but the first ones can be. That is why the clamp down on foreigners operating businesses reserved for Samoan citizens should be backed. There are 140 businesses alleged to be involved.

They are now under the scrutiny of the Ministry of Customs and Revenue. Retail shops are amongst several reserved activities prohibited for foreigners from owning or working in.

But despite laws to protect local businesses, Samoans have been found selling their business license to foreigners to operate retail shops, which is illegal.

In the process of obtaining and renewing business licenses, the Ministry of Customs and Revenue (M.C.R.) has in place stringent processes to get down to the bottom of who the real owners are.

By doing so business applicants are required to provide multiple documents to prove the legitimacy of their operation by submitting immigration status, residency, and marriage certificates amongst other legal paperwork.

The business community is often up in arms with the lengthy process taken by M.C.R. in renewal of business license however it is vital in protecting local businesses.

In 2022 amendments were made to Business License Regulations where new requirements were implemented for all business license applications and business license renewal for the year 2023.

One main aspect of the amendment is the declaration of the beneficial owner of the business, which was first introduced in another amendment in 2018.

While it is against the law to operate reserved businesses, many will also attest that the foreign-operated retail shops are cheaper, employ more locals, and are in operation seven days a week, unlike most locally owned retail shops that are closed for lunch, some never open past 6 pm and always closed on a Sunday.

These foreign-operated shops also pay more taxes and often invest in one or two more branches, employing more locals and contributing more to the economy. Most locally-operated retail shops cannot compete with foreign ones because the foreign-operated shops are willing to do the hard yards.

What will happen when MCR finds that the suspected 140 ‘dodgy’ businesses have paid a local to be their front? The worst-case scenario is that these shops will be closed.

This step will also affect the locals who are employed at these shops. If a foreign retail shop employs three locals on average, more than 400 people lose their jobs. That in no way is a small number.

That is the dilemma for the MCR to deal with but the fact that 140 such businesses exist shows the laxity in the way the licensing authorities had been operating. Hopefully, the stringent licensing process would prohibit such businesses from opening in the future.

The Ministry of Commerce, Industry and Labour (MCIL) has a list of the “restricted activities” on its website, which are reserved for Samoan citizens only. According to the ministry, “Foreign investors and companies with shareholders, directors, and or employees are not allowed to engage in any of these reserved activities”. The ministry has listed the reserved activities as follows: (i) Bus transport services for the general public (ii) Taxi transport services for the general public (iii) Rental vehicles (iv) Retailing of general food items (v)  Sawmilling and (vi) Traditional elei garment designing and printing.

The other practice of foreigners getting married to local women – who then use their spouses to apply for local business licenses bypassing the strict requirements normally imposed on foreign investors – also continues unabated. All too often the motives of foreign businessmen are known to the local authorities, but officials just go ahead anyway and process the submitted paperwork without digging further into the background of the foreign investors.

The current Fa’atuatua i le Atua Samoa ua Tasi (FAST) administration should be wary of the long-term implications of allowing these illegal practices to continue. The last thing you would want is for the citizens of Samoa to become passengers on their own land and miss out on the wealth-creation opportunities, which are paramount to the future success and prosperity of this nation.