Docstoc

INVEST IN TIMOR-LESTE

Document Sample
INVEST IN TIMOR-LESTE Powered By Docstoc
					The External Investment Regime in
          Timor-Leste




                                    1
              TIMOR-LESTE:
             in brief and economic growth 2010
   Size of Country:                15,000km2.
   Population:                     1.1M
   Currency:                       USD
   GDP:                            $637M
   GDP per capita:                 $637
   Imports:                        $430M
   Exports:                        $59M
   Inflation Rate:        7.4%
   Petroleum Fund Balance (October 2010): US$ 6.592billion
   Everage oil and gas revenues in 2010: US$ 150 million
   Economic growth 2010: 12%
   Reduction Poverty: 9%



                                                              2
  Timor-Leste major reforms have
fostered a better climate for private
            investment
   2008: A new tax law came into force, transforming the tax regime for
    business. The profit tax rate was reduced from 30% to 10%.
    Corporate income tax now paid in quartertly rather than monthly
    installments when turnover is less than 1million. Due to these
    reforms, the new tax regime was recognized in the World Bank
    doing business report 2009 as one of the top twenty in the world,
    moving from ranking of 75 to ranking 19 in the one year.
   2008: the gov’t also successfully introduced decentralization of
    procurement to line Ministeries, ensuring more effective and efficient
    budget management.
   2010: the council of minister approved the private investment law
    that future will replace the external investment law.




                                                                         3
     National strategic development
                   plan
   The gov’t is currently working on a national
    strategic development plan to 2030 which
    includes a public investment strategy cross
    sectors. The strategy is aimed at establishing
    best practices which will render maximum
    returns and fosters the conditions to stimulate
    the non-oil economy and encourage private
    sector growth. The national strategic
    development plan 2011-2030 to be presented
    this year will be the guiding document that will
    bring Timor-Leste from a low income country to
    an upper middle income country by 2030.

                                                       4
                  TIMOR-LESTE:
    Principles of the Economic Development Strategy

   Promote an open economy based on competitiveness
   Create a market economy led by the private sector
   Develop a business-friendly environment
   Stimulate the development of an export-led economy
   Promote capacity building of the private sector
   Create attractive investment opportunities for domestic as
    well as external investors
   Stimulate the development of economic infrastructure
   Promote the creation of sustainable employment
   Improve the quality of life of the people
   Contribute significantly to reduction of poverty in the
    country
                                                                 5
                      TIMOR-LESTE:
       Basic Principles of the Private Investment Policy


   Promote an investment strategy led by the private sector as the engine
    of economic growth
   Stimulate investment in the entire country, particularly in rural areas,
    and especially in the District of Oe-Cussi and the sub-District of Ataúro
   Accord special attention to investments directed at the export market
    and economic infrastructure
   Offer investment guarantees based on international best practices
   Adopt a package of competitive investment incentives
   Encourage voluntary joint-venture initiatives based on mutual business
    interests of domesitic and external investors
   Promote the integration of small and medium enterprises (SMEs) in the
    supply chain of external investment ventures



                                                                          6
The Investment Regime in Timor-
             Leste



        General Legislation
        Specific Legislation



                                  7
Specific Investment Legislation in
            Timor-Leste


     Petroleum Sector Legislation
    (Mineral Resources Legislation)
Investment Legislation in Other Sectors


                                          8
      Specific Investment
         Legislation:
Equal Treatment of All Investors
  Law No. 4/2005 on Domestic Investment
  Law No.5/2005 on External Investment




                                          9
       Law on External Investment No. 5/2005:
                      Objective of the Law

   With Law No. 5/2005 the State of RDTL intends to
    create a legal framework to attract and retain foreign
    direct investment into the country. The purpose is to
    promote the development of the country’s natural and
    human resources, create sustained employment and
    contribute to the economic and social development of
    Timor-Leste. The ultimate aim is to contribute
    significantly to the improvement of the living conditions
    of the population and the reduction of poverty in the
    country.



                                                                10
         Law on External Investment No. 5/2005:
              Means of External Investment, Article No. 6


   Currency transferred from abroad and deposited in a legal
    financial institution in Timor-Leste;
   Import of assets, services and rights with funds originating
    from overseas;
   Dividends generated by an external investment and
    reinvested in the same business unit;
   Granting of rights for technology and trademark use.




                                                              11
              Law on External Investment No. 5/2005:
                          Conditions and Guarantees

   Access to all sectors of the economy under the laws of Timor-Leste
   Minimum amount required for external investment is $100,000 USD
   Guarantee of the rights to private property
   Legal guarantee against nationalization; expropriation only under the
    law and for general public purpose with fair and prompt compensation
   Equal treatment of all investors
   Rights to repatriate profits and proceeds derived from an external
    investment
   Right to contract skilled foreign worker
   Right to transfer assets freely
   Access to foreign currency
   Mediation as the preferred form of conflict resolution
   Option for arbitration in dispute resolution between the State of RDTL
    and the foreign investor under ICSID rules

                                                                        12
    Law on External Investment No. 5/2005:
     Corporate Income Tax Incentives, Article No. 14


   Tax credit of $300 for each Timorese worker working on a regular
    full time basis according to the location and type of external
    investment as follows:
      Urban areas for a period of 5 years

      Rural areas for a period of 7 years

      Oe-Cussi and Ataúro for a period of 10 years

   Where the external investment is made in economic infrastructure:
      Urban areas for a period of 10 years

      Rural areas for a period of 12 years

      Oe-Cussi and Ataúro for a period of 15 years

   Where the external investment is focused mainly on export:
      Urban areas for a period of 7 years

      Rural areas for a period of 9 years

      Oe-Cussi and Ataúro for a period of 12 years
                                                                 13
         Law on External Investment No. 5/2005:
                Customs Incentivos, Article No. 15


   Exemption in the payment of Customs duties and taxes on:

       Capital goods
       Materials for construction of industrial and hotel buildings
       Raw materials for manufacturing
       Semi-finished goods
       Components and spare parts for incorporation or use in the
        production of goods and services
       Fuel (except gasoline) used to produce electricity for
        utilization in the foreign investment business unit


                                                                   14
         Law on External Investment No. 5/2005:
              Lease Exemptions – Article No. 17



   State land and property in rural areas:

       Exemption from lease payment for a period of 7
        years on investments in rural areas

       Exemption from lease payment for a period of
        10 years on investments in Oe-Cussi and Ataúro


                                                    15
Institute for Promotion of External
             Investment
             and Export
  - TradeInvest Timor-Leste -


The “One-Stop-Shop” for the external
  investor and the national exporter


                                       16
                    External Investment Processing:
                               The Future
               (One-Stop-Shop & Investment Commission)

                                           Permanent Members      Ad Hoc Members
                                           Investment Commission Investment Commission




                                                Customs
                                                                         Sector A: Trade
                                             Environment
Investor   TradeInvest
                              Ext Invest                            Sector B: Tourism
  Entry    Timor-Leste       Commission
                                           TradeInvest
           (One-Stop-Shop)
                                             Tax Depart.                 Sector C: Fisheries
                                                                               Etc…
                                              Emigration

                                                   Labor




                                                                                        17
Law on External Investment No. 5/2005:
      Obrigations of the External Investor, Article No. 22

   Comply with the laws, regulations and rules in Timor-Leste;
   Employ Timorese workers and promote their vocational training and
    technical skills required to perform supervisory and managerial
    functions;
   Implement rules and procedures regarding the protection of the
    environment, health and safety at the work place under the terms of
    applicable legislation;
   Comply with the rules and procedures of applicable legislation which
    govern transfer of funds;
   Regularly provide TradeInvest Timor-Leste with information and
    data related to the external investment operation.


                                                                           18
Commencement of Implementation of Foreign Investment
(Government Decree N. 6/2005 27th of July)



1) Effective implementation of foreign investment that has been
      authorized within the framework of the present regulation, is the
      responsibility of the investors or their proxies, and must start
      within 180 days, unless another timeframe is established in the
      permit, from the date the investor is notified of the decision on
      his application.

2) The entity which has approved the application for foreign
     investment permit, can, for necessary reasons, extend the
     period referred to in the previous number for an additional
     period of 90 days, if the permit holder requests an extension
     before expiry of the mentioned period.




                                                                     19
            TIMOR-LESTE:
        Areas Of Investment Opportunities

   Oil and Gas
   Mineral Resources
   Agriculture and Agro-industry
   Forestry
   Fisheries
   Tourism
   Industry
   Economic Infrastructure


                                            20
21
22
      Thank You
     Terima kasih
   Obrigado Barak!




TradeInvest Timor-Leste   23

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:15
posted:10/25/2011
language:English
pages:23