ECONOMIC AND SOCIAL COMMISSION FOR ASIA AND THE PACIFIC
TRADE AND INVESTMENT COUNTRY INFORMATION
PAPUA NEW GUINEA
(Sample Information)
UNITED NATIONS
1994
CONTENTS
Page
Chapter
I. GENERAL BUSINESS INFORMATION 1
A. Establishing business offices 1
B. Trademarks and patent registration 1
C. Main ports and warehouses 2
D. Communications 2
E. Travelling and business customs 2
II. SELLING TO PAPUA NEW GUINEA 4
A. Import policy, regulations and procedures 4
B. Tariff schedule 5
C. Foreign exchange regime 6
D. Documents 8
E. Government procurement 8
III. BUYING FROM PAPUA NEW GUINEA 10
A. Export policy, regulations and procedures 10
B. Export charges 11
C. Settlement of bills 11
D. Documents 11
IV. INVESTING IN PAPUA NEW GUINEA 12
A. Essential features of policies relating to foreign investment 12
B. Areas where foreign investment is encouraged 14
C. Incentive schemes 15
D. Limitations to foreign investment 22
E. Administrative procedures 26
F. Annexes 33
V. TRADE AND INVESTMENT INFORMATION SOURCES 41
A. Government agencies 41
B. Chambers of commerce and industry 42
C. Overseas offices of trade information 43
D. Commodity boards 46
E. Other associations 47
I. GENERAL BUSINESS INFORMATION
A. Establishing business offices
Under the Companies Act, when a foreign company intends to establish a business enterprise in Papua New Guinea, it may choose one of the following types:
(i) subsidiary;
(ii) branch; or
(iii) acquisition of all or the majority of shares of a Papua New Guinea
incorporated company.
The incorporated company may take one of three different forms:
(i) a limited liability company;
(ii) an unlimited liability company; or
(iii) a non-liability company. The formation of a non-liability company is
restricted to mining companies.
Most companies in Papua New Guinea are limited liability companies, and these are, in turn, divided into public companies and private companies. The public company is allowed to raise capital from the public, with no restriction on the transfer of shares. The private company is not permitted to offer shares for public subscription.
A foreign company wishing to set up a business enterprise must submit a project proposal to the Investment Promotion Authority (IPA) for approval and registration. The project proposal must include necessary information which enables IPA and government departments concerned to assess the desirability of the proposed project. In addition, foreign investment in any form requires the prior permission of the Bank of Papua New Guinea.
A memorandum and articles of association are required to be filed with the Registrar of Companies in order to incorporate a company in Papua New Guinea. The memorandum should contain information on the name of company, scope of business, share capital, etc. The articles of association should include information on the method of operation and internal management.
A branch of a foreign company must also file the required documents with the Registrar of Companies.
B. Trademarks and patent registration
Papua New Guinea has a Trademarks Act, and foreign companies may apply for registration of their trademarks through the Registrar General's Office. The period of validity for a trademark is ten years from the date of registration and may be renewed.
C. Main ports and warehouses
Ports are administered by the Papua New Guinea Harbours Board. Ships carry a steady flow of imports and exports to and from the major ports of Port Moresby, Lae, Rabaul, Madang, Wewak, Samarai, Kavieng and Kieta. Regular shipments can be made to Australia, Europe, Singapore, Hong Kong, the United States of America and Japan.
Consignees are required to have all goods for export cleared by the Customs Bureau and the Papua New Guinea Harbours Board. Then goods may be entered into the Papua new Guinea Harbours Board sheds within seven working days before the ship has docked.
D. Communications
Telecommunications services in Papua new Guinea rank among the most modern in the South Pacific region. An extensive, fully automated internal network places the country within easy reach of the rest of the world. There is direct dialling to 88 countries throughout the world and a facility for using American telephone credit cards.
Facsimile service is in common usage throughout the country. In addition, there are telex, cable and mobile radio telephone services.
Data transmission is also available through Data Services at Post Offices at main centres. The postal service is efficient and various express delivery services are in operation. Post Office box numbers are used for all postal addresses. However, door-to-door delivery service is operated by several international courier organizations which operate in Papua New Guinea.
E. Travelling and business customs
1. Visa
All travellers to Papua New Guinea must have a valid passport and visa. Visas can be obtained from Papua New Guinea diplomatic missions or consulates. In places where these do not exist, consular services are provided by Australian missions.
A visitor/tourist visa for a maximum stay of sixty days may be obtained at consulates abroad and they are issued at the discretion of the visa-issuing office. A thirty-day tourist visa which is strictly enforced may be issued to travellers on arrival in Papua New Guinea, if the applicant possesses a return or onward voyage airline ticket. The fee for issuing or extending a visitor/tourist visa is kina 10.00.
Travellers who enter Papua New Guinea for business purposes may apply at consulates overseas for a single entry Business Visa covering a maximum period of three weeks. If any extension of the Business Visa is sought, then it will be considered as a multiple entry Business Visa.
A multiple entry Business Visa may be issued for a period of validity covering twelve months. The length of stay for each visit is eight weeks. Anyone wishing to work in Papua New Guinea must obtain a work permit from the Department of Labour and Employment.
2. Business hours and holidays
Business offices Monday - Friday 0800 - 1630
Government offices Monday - Friday 0745 - 1600
Banks Monday - Thursday 0900 - 1400
Friday 0900 - 1700
Shops Monday - Friday 0900 - 1630/1730
Saturday 0900 - 1300
Sunday 0900 - 1300
Most business offices and government offices are closed on Saturdays.
Public Holidays
1 January New Year's Day
* Good Friday
* Easter Sunday
* Easter Monday
3 June Queen's Birthday
23 July Remembrance Day
16 September Independence Day
25 December Christmas Day
26 December Boxing Day
II. SELLING TO PAPUA NEW GUINEA
A. Import policy, regulations and procedures
1. General
Papua New Guinea basically follows a free trade policy. Imports are, on the whole, free of restrictions and where restrictions apply, most are of a temporary nature. The Department of Trade and Industry administers foreign trade and places restrictions on the import of certain goods to protect local production or promote import substitution.
2. Licensing, quotas and prohibitions
Certain imports, which are specified vegetables and fruits such as garlic, cauliflower and broccoli, are under import quota restrictions and allowed to be imported only through designated ports. Import quotas are adjusted bi-annually, taking into account domestic demand and supply conditions for the quota items.
In order to protect domestic producers, imports of certain goods are prohibited. Prohibited imports include pork, canned meat, sugar and certain fresh vegetables and fruits.
3. Import requirements
Import of seeds, plants and other plant material requires an import permit from the Chief Quarantine Officer of the Department of Agriculture and Livestock. In addition, a certificate of inspection is required to import plant material. The certificate of inspection is issued by the government authority concerned in the country of origin. The certificate must state that the plant material is free from pests and diseases affecting the species.
Any imported pharmaceutical which is listed in the Papua New Guinea "Dangerous Drugs List" requires a licence from the Department of Health. Imports of untreated raw hides, skins and wool must be fumigated before entry into Papua New Guinea.
4. Packing and labelling requirements
There are labelling requirements for food, food additives and preservatives. There are also special labelling requirements for poisonous products.
5. Inspection
Imported seeds, plants and plant material must undergo quarantine inspection at the Plant Quarantine Division of the Department of Agriculture and Livestock.
6. Participation in multilateral, regional and commodity agreements
Papua New Guinea is a member of the Economic and Social Commission for Asia and the Pacific (ESCAP) and a member of the South Pacific Regional Trade and Economic Co-operation Agreement (SPARTECA). SPARTECA is a non-reciprocal trade agreement under which the two developed-member countries of the South Pacific Forum, Australia and New Zealand, provide duty-free and unrestricted or concessional access for virtually all products originating from the developing island member countries of the Forum. Papua New Guinea is also a signatory to the African, Caribbean and Pacific-European Economic Community Convention of Lome IV which grants preferential tariff rates to certain products originating from Papua New Guinea. Papua New Guinea is a beneficiary of the General System of Preferences (GSP) under which certain tariff concessions are provided to its exports entering into the developed countries.
Papua New Guinea is a signatory to the following commodity agreements: International Coffee Agreement (ICA), International Cocoa Agreement (ICCA), International Sugar Agreement (ISA), International Tropical Timber Agreement (ITTA). Papua New Guinea is also a member of the Association of Natural Rubber Producing Countries (ANRPC).
B. Tariff schedule
1. Classification
Papua New Guinea uses the Harmonized System (HS) which is based on the International Convention on the Harmonized Commodity Description and Coding System.
2. Customs duties
Papua New Guinea has a highly differentiated import tariff structure in which the duty rate ranges from a high rate on luxury goods to zero rates on essential items and non-competing imports for domestic industries.
Essential items, including rice, canned fish, canned meat, medical and educational supplies and certain machinery and raw materials, are duty free. For basic products, including certain consumer goods and raw materials, the duty is 5 to 9 per cent. For intermediate goods which compete with locally-produced goods, the duty range is 25 to 30 per cent. For luxury items, such as passenger motor vehicles, television sets, video recorders, jewellery, cosmetics and non-essential food and beverages, the duty range is 50 to 75 per cent.
Papua New Guinea's tariff rates apply to the CIF price and not the FOB price, since 1990.
3. Taxes and surcharges
In addition to the above-mentioned import duty, a general import levy of 9 per cent is assessed for revenue purposes on all goods imported into Papua New Guinea. A limited number of basic necessities and organizations are exempted from the general import levy.
There is a retail sales tax at the provincial level. Although the rate of tax varies from province to province, it is generally in the range of 1 to 4 per cent of the retail selling price of goods.
C. Foreign exchange regime
1. General
The Bank of Papua New Guinea is the Central Bank which administers exchange control under the Central Banking (Foreign Exchange and Gold) Regulations. Uniform exchange controls apply to dealings with all countries. Papua new Guinea adheres to Article VIII of the International Monetary Fund. Accordingly, it does not impose restrictions on verifiable curent account transactions.
The Bank of Papua New Guinea has authorized the commercial banks to act as dealers in foreign exchange. The commercial banks have the authority to approve applications for import payments that are not subject to import quotas or licensing requirements without referring to the Bank of Papua New Guinea. The Bank deals on a case-by-case basis with all applications for import payments which fall outside the delegated authority of the commercial banks.
Exporters are required to collect export proceeds within six months of the date of exportation, and the proceeds must be sold to an authorized commercial bank.
Papua New Guinea is not a member of any regional clearing arrangement.
2. Currency convertibility
The currency of Papua New Guinea, the kina, is freely convertible. One kina is divided into 100 toea. The kina is denominated in 2, 5, 10, 20 and 50 kina notes; 1, 2, 5, 10, 20 and 50 toea and one kina coins.
The exchange rate system in Papua New Guinea is based on a basket system in which the value of the kina is pegged to the movement of certain world currencies. The Bank of Papua New Guinea sets a midrate each morning for the kina against the United States dollar. This rate remains fixed during the course of day and is used as the basis for each commercial bank to set its cross rates for other currencies against the kina.
3. Banking
Papua New Guinea's banking system is controlled by the Bank of Papua New Guinea (the Central Bank), which acts as the agent of the Government. The Bank of Papua New Guinea administers the currency and foreign exchange and regulates banking and credit according to the Government's monetary policy. It also controls the lending policies of the commercial banks.
As of 1991, the following five commercial banks were providing full banking services in Papua New Guinea:
(i) Papua New Guinea Banking Corporation
(ii) Australia and New Zealand Banking Group Limited
(iii) Bank of South Pacific Limited
(iv) Indosuez Niugini Bank Limited
(v) Westpac Bank-PNG-Limited
Papua New Guinea Banking Corporation (PNGBC) is wholly owned by the Government and is the largest bank in the country, accounting for about 50 per cent of Papua New Guinea's banking market. The other commercial banks are subsidiaries of Australian and international banks.
The Government also owns the Agricultural Bank of Papua New Guinea. Its main objective is to provide loans at concessional rates of interest for the promotion of primary production as well as for the development of industrial and commercial projects.
D. Documents
1. All shipments
The following documents are required for imports:
(i) Commercial invoice;
(ii) Bill of lading/air waybill;
(iii) Packing list;
(iv) insurance certificate.
Required measurement system: metric
2. Special requirements
An import permit issued by the Chief Quarantine Officer of the Department of Agriculture and Livestock is required for the import of seeds, plants and plant material. Imported pharmaceuticals require a licence from the Department of Health. A sanitary certificate is required for imported animals and animal products. An import licence is required for certain kinds of goods.
E. Government procurement
The Department of Works and Supply is the centralized government purchasing department. The Controller of Supplies of the Department's Division of Supply is responsible for making purchases of supplies on the basis of specifications and standards indicated by indenting departments. As a rule, all government organizations must follow provisions of the Manual of Financial Procedures, Section VI - Purchase and Fund Trol. However, statutory corporations such as the Post and Telecommunication Corporation and Electricity Commission have more autonomy and flexibility in procurement.
For government purchases of more than 4,000 kina, public tenders must be invited. All tenders received are submitted to the Central Government Supply and Tenders Board (CGSTB) after evaluation and tabulation by the Controller of Supplies. Purchases up to 100,000 kina can be finalized by CGSTB. Procurement in the range of 100,000 to 300,000 kina needs approval of the Minister for Finance and Planning, and purchases exceeding 300,000 kina need Cabinet approval.
In addition to the Central Government Supply and Tenders Board, there are other tender boards authorized to make their own procurement. These tender boards are supervised by CGSTB.
Statutory, corporations have their own tender boards for making procurement decisions. Most technical goods are procured based on specifications suggested by technical departments or those indicated in technical catalogues of manufacturers.
Overseas procurement is mainly handled through Papua New Guinea's Division of Supply Office in Sydney, Australia. It can be contacted at:
Division of Supply Office
GPO Box 4201
225-233 Clarence Street
Sydney, New South Wales
Australia 20011
III. BUYING FROM PAPUA NEW GUINEA
A. Export policy, regulations and procedures
1. General
Papua New Guinea's economy is extremely dependent on exports, which account for more than 40 per cent of GDP. Most exports are primary products such as copper, gold and agricultural products which makes export earnings subject to international price fluctuations. The Government has promoted the export of manufactured products by providing export incentives consisting of tax concessions.
2. Licensing, quotas and prohibitions
Exports permits must be obtained for three categories of goods:
(i) Restricted goods;
(ii) Endangered species of fauna and flora; and
(iii) Primary commodities and goods that require certain compulsory markings and certification that the proper standard of quality has been achieved.
Items in the first category (restricted goods) for which an export permit is required include forest products such as logs, timber, sandal-wood, rattan; marine products such as tuna, prawns, crayfish, sea shells, lobsters, etc.; and artifacts and historical goods of Papua New Guinea origin.
Several timber species are banned for export in the form of logs, but may be exported with a permit as sawn timber. These are conifer, ebony, cordia balsa teak rosewood and blackbean.
All exports of logs from Papua New Guinea require an export licence which is issued by the Department of Trade and Industry. Log exports are also subject to the requirements of the Minimum Export Guideline Prices.
B. Export charges
Certain export items from Papua New Guinea are subject to duty charged by the Customs Bureau. Duty is levied based on the stated value of the exported goods and must be paid before the goods leave the country.
The list of goods subject to ad valorem rates of duty are prescribed as follows:
(i) Fish, prawns, shrimps;
(ii) Barramundi;
(iii) Tuna;
(iv) Beches de mer;
(v) Shells (mother of pearl, etc.);
(vi) Alluvial gold;
(vii) Jewellery, gold and silver;
(viii) Crocodile skins;
(iv) Rattan;
(x) Logs; according to species.
C. Settlement of bills
There are four kinds of payment arrangements which are commonly used in Papua New Guinea for exporters: (i) shipment on consignment, (ii) letter of credit, (iii) sight draft and (iv) time draft. Export proceeds must be collected within six months of the date of exportation and sold to an authorized bank in Papua New Guinea.
D. Documents
The following documents are required for exports:
(i) Customs entry form;
(ii) Customs invoice;
(iii) Commercial invoice;
(iv) Certificate of origin;
(v) Health/sanitary certificate;
(vi) Bill of lading/air waybill;
(vii) Packing list.
V. INFORMATION SOURCES FOR TRADE AND INVESTMENT
(Area Code: 675)
A. Government agencies
1. Investment Promotion Authority
P.O. Box 5053 Boroko NCD
5th Floor Investment Haus, Port Moresby
Tel: 21 7311
Fax: 21 2819
2. Trade Division
Department of Commerce and Industries
P.O. Box 375 Wards Strip, Waigani
Tel: 27 1115
Fax: 27 2403
3. Department of Mining & Petroleum
P.O. Box 352, Konedobu
Tel: 21 4011
Fax: 21 3701
Tlx: NE 22211 (WARPRO)
4. Department of Agriculture and Livestock
P.O. Box 417 Konedobu
Tel: 21 4699
Fax: 21 1337
Tlx: NE 22143 (AGRIC)
5. Department of Fisheries & Marine Resources
P.O. Box 165 Konedobu
Tel: 21 4699
Fax: 21 3696
Tlx: NE 22391 (FISHEP)
6. PNG Forest Authority
P.O. Box 5055 Boroko
Tel: 25 4022
Fax: 25 5457
Tlx: NE 22360 (FORESTS)
7. Department of Lands and Physical Planning
P.O. Box 5665 Boroko
Tel: 27 6472 or 27 6350
Fax: 27 6733
8. Industrial Centre
P.O. Box 3638
Lae, Morobe Province
Tel: 42 2844
Fax: 42 2810
9. Internal Revenue Commission
P.O. Box 777, Port Moresby
Tel: 22 6600
Fax: 21 4249
Tlx: NE 22202
10. Taxation Office
P.O. Box 777, Champion Parade
Tel: 22 6628
Fax: 21 4249
11. Bank of Papua New Guinea
P.O. Box 121, Port Moresby
Tel: 22 7255
Fax: 21 1617
B. Chambers of commerce and industry
1. Papua New Guinea Chamber of Commerce and Industry
P.O. Box 1621, Port Moresby
Tel: 21 3254, 21 3077
Fax: 21 4203
Tlx: 22 246
2. Port Moresby Chamber of Commerce and Industry
P.O. Box 1764, Port Moresby
Tel: 21 3077, 21 3254
Fax: 21 4203
Tlx: 22 246
3. Lae Chamber of Commerce
P.O. Box 265, Lae
Tel: 42 2340
Tlx: NE44217 CHACOM
4. Liklik Bisnismanmeri Association, Inc.
P.O. Box 399, Boroko
National Capital District
Tel: 25 2828
5. Madang Chamber of Commerce
P.O. Box 1, Madang
Tel: 82 2355
6. Papua New Guinea Chamber of Mines and Petroleum
P.O. Box 1032, Port Moresby
National Capital District
Tel: 21 2988
Fax: 21 7107
C. Overseas offices of trade information
AUSTRALIA
1. Papua New Guinea High Commission
Foster Crescent, Yarralumla ACT 2600
PO Box 572, Manuka ACT 2603
Tel : 73 3322
Telex: AA 20263
Fax : 73 3732
2. Papua New Guinea Consulate
PO Box 4201
Sydney, NSW 2001
Tel : 29 5151
Telex: AA 20263
Fax : 290 3794
3. Papua New Guinea Consulate
Estate Houses
307 Queen Street
Brisbane, QLD 4000
Tel : 221 7915
Telex: AA 40897
Fax : 229 6084
4. Papua New Guinea Trade Commission
Somare Haus, 100 Clarence Street
Sydney, NSW 2001
Tel : 290 1525
Fax : 290 1116
BELGIUM
Papua New Guinea Embassy
17-19 Rue Montoyer, 1st Floor
1040 Brussels
Tel : 02/512 3137
Telex: 062249
Fax : 322 512 8643
CHINA
Papua New Guinea Embassy
Floor 2-11-2, Ta Yang Diplomatic Building
Chao Yang District, Beijing
Tel : 532 4312
Telex: 211221
Fax : 500 2871
FIJI
Papua New Guinea High Commission
Ratu Sukuna House (6th Floor),Government Building
PO Box 2447, Suva
Tel : 25421/25420
Telex: 2113
Fax : 679 300178
GERMANY
Papua New Guinea Embassy
Gotenstrasse 163, 5300 Bonn 2
Tel : 37 6855/37 6856
Telex: 886340 KUNDU D
Fax : 2837 5103
INDONESIA
Papua New Guinea Embassy
Panin Bank Centre (6th Floor)
Jalan Jendral Sudirman 1, Jakarta 10270
Tel : 71 1226/71 1225/71 1218
Telex: 734562
Fax : 72 01012
JAPAN
Papua New Guinea Embassy
Mita Kokusai Building 3F 313
4-28 Mita 1-chome, Minato-ku, Tokyo
Tel : 454 7801-4
Telex: 25488
Fax : 454 7275
MALAYSIA
Papua New Guinea High Commission
No. 1 Lorong Ru Kedua, Off Jalan Ru
Ampang, Kuala Lumpur
Tel : 457 4202, 457 4203, 457 4204
Fax : 456 0998
NEW ZEALAND
Papua New Guinea High Commission
Princess Tower (11th Floor)
180 Molesworth Street, Thorndon, Wellington
Tel : 73 1560
Telex: 31353
Fax : 71 2942
PHILIPPINES
Papua New Guinea Embassy
2280 Magnolia Street, Dasmariras Village, Makati, Metro Manila
Tel : 8108456/8108457
Telex: 22692 KUNDU PH
Fax : 817 1080
REPUBLIC OF KOREA
Papua New Guinea Embassy
Room 1726 Koreana Hotel, 61-1-KA Taepyung-Ro
Chung-Ku, Seoul
Tel : 73 0911/73 0922
Fax : 79 8956
SINGAPORE
Honorary Consul
Papua New Guinea Consulate
111 North Bridge Road, 12-01/05/06 Peninsula Plaza
Singapore 0617
Tel : 336 7678/9
Fax : 336 8949
THAILAND
Honorary Consul
Papua New Guinea Consulate
Sino-Thai Tower, 30th Floor, Asoke Road, Sukhumvit 21
Bangkok
Tel : 258 3436
Telex: 82832
Fax : (828) 2601 5339
UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND
Papua New Guinea High Commission
14 Waterloo Place
London SW1R 4AR
Tel : (01) 930 0922/6
Telex: 25827
Fax : 01 930 0828 (441)
UNITED STATES OF AMERICA
Papua New Guinea Embassy
100 East 42nd Street, Room 1005
New York, NY 10017
Tel : 212 6826
Telex: 66603
Fax : 682 6454
D. Commodity boards
1. Cocoa Board of Papua New Guinea
PO Box 532, RABAUL
Tel : 92 2153/92 1354
Fax : 92 1794
2. Copra Marketing Board of Papua
New Guinea, PO Box 81
PORT MORESBY
Tel : 21 1133/21 1513
Telex: 22135
Fax : 21 4257
3. Papua New Guinea Spice Industries Board
PO Box 1519, LAE, Morobe Province
4. Coffee Industry Corporation
PO Box 137, GOROKA
Tel : 72 1266/72 1207
Telex: 72647
Fax : 72 1431
5. Papua New Guinea Rubber Board
PO Box 417, KONEDOBU
Tel : 21 4282/21 4699
Telex: 22143/22392
Fax : 21 1337
6. Papua New Guinea Palm Oil Producers Association
PO Box 586, LAE, Morobe Province
Tel : 42 1755
E. Other associations
1. Liklik Bisnismanmeri Association
PO Box 399, BOROKO
National Capital District
Tel : 25 2828
2. Coopers & Lybrand offices
(1) Port Moresby
P.O. Box 484
Mogoru Motu Building
Champion Parade
Tel: 21 1500
Fax: 21 1428
Tlx: NE22126
(2) Lae
ANZ Bank Building
Central Avenue
P.O. Box 451
Tel: 42 2644
Fax: 42 6270
(3) Goroko
P.O. Box 451
Provincial Government Building
Elizabeth Street
Tel: 72 1177
Fax: 72 1946
(4) Mount Hagen
Komkui Haus
Kuri Street
P.O. Box 622
Tel: 52 1092, 52 1664
Fax: 52 2086
3. Price Waterhouse Offices
(1) Port Moresby
P.O. Box 921
Investment Haus, 7th Floor
Douglas Street
Tel: 21 2077
Tlx: 22 233 (PWPNG)
(2) Lae
P.O. Box 998
IPI Building, 2nd Street
Tel: 42 2122
Tlx: 22 233 (PWPNG)