INVESTMENT CONSIDERATIONS

GOVERNMENT POLICY

The Government of Samoa actively encourages foreign investment. The Government is committed to industrial development and recognises that foreign capital, technology and management can substantially contribute to Samoa's economic development. The Government's philosophy is that those who provide these sources must be both welcomed and encouraged by creating a positive environment for private sector investment.

The Government has streamlined legislation and procedures to encourage the establishment and expansion of enterprises capable of providing increased employment opportunities and contribute substantially to widening the economic base of the country.

Manufacturing and tourism are seen by the Government as the two most important sectors. The Government has provided infrastructural facilities and an attractive incentives package to encourage both local and foreign investors in these sectors.

TRANSFER OF CAPITAL AND PROFITS

There are no set minimum or maximum limits to the amounts of capital an investor can bring into Samoa. Overseas borrowings are subject to approval by the Central Bank. Repatriation of overseas capital and profits is normally permitted provided the original investment had come to Samoa through the Banking system or in some other approved way. Foreign investors are expected to finance at least 50 percent of their fixed assets from overseas sources.

Repatriation of capital and profit remittances on foreign capital is permitted, although it must be approved by the Central Bank.

Expatriate workers with local contracts of one year or longer will be considered residents and therefore need Central Bank approval if they wish to repatriate funds in excess of 80 percent of their net earnings on a fortnightly basis. Earnings not repatriated during the contract period may be repatriated at the end of the contract.

TAXATION

Individuals
Taxation is on a sliding scale from a minimum rate of 10 percent to a maximum of 35 percent. The same rates apply for both resident and non-resident individuals and are as follows:

A dividend tax of 10 percent and 15 percent applies to Resident and Non-Resident companies respectively. Royalties and management/directors fees are taxed at 10 percent and 35 percent respectively. Bank interest earned by both Resident and Non-Resident companies are taxed at 15 percent.

Samoa has a unitary system of taxation, whereby income from all sources is aggregated and is subjected to a single tax. Certain classes of income are deemed to be withholding income, which is subject to separate rates of withholding tax.

The financial year normally ends on 31 December, but companies with other fmancial year periods may apply to the Commissioner setting out the reasons for adopting a different year. Such applications are usually approved. Where the financial year of a commercial enterprise is other than the calendar year, the calendar year in which more than one-half of the financial year falls is deemed to be the year in which the income was derived.

INVESTMENT PROTECTION

Samoa is not a party to any international agreements regulation foreign investment and protection.

INVESTMENT INCENTIVES

The Government provides a range of incentives for new investment some of which are listed below:

• a tax-free concession allows deduction of income liable for tax for a period of up to five years or accelerated depreciation rates at the option of the investors;
• import duty exemptions or concessions on buildings, plant, machinery and equipment for establishment or expansion and industrial raw materials not available locally can be offered for up to five years and, subject to extension approval, to an additional five years;
• during its income tax holiday, a company's dividends are exempted from withholding tax;
• the possible lease of a site on which there is a newly constructed, fully serviced factory building. The rental cost reflects the current cost of construction and providing services;
• generally, repatriation of invested capital, dividends, net profit, royalty, and licence fees is freely permitted;
• completion within 24 hours of customs inspection of incoming or outgoing commodities;
• electric power preferential rates;
• the issue of long-term resident permits to promoters and shareholders as warranted by the size of the interest;
• provision of housing for use of expatriate staff in order to attract industries that either have a high labour content or would create employment opportunities through linkage effects.

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