Investing

Fiji Islands: Investing

FDI in Figures

The political situation in Fiji has returned to normal, enabling more favourable conditions for FDI. After a series of military coups, elections took place in 2014 and 2018, which improved investors’ confidence. According to data from the 2021 World Investment Report by UNCTAD, FDI inflows to Fiji in 2020 were affected by the global economic health crisis triggered by the Covid-19 pandemic. In Fiji, the region's largest recipient, FDI fell by 25% to USD 241 million, while GDP contracted by almost 22% due to poor tourism activity and knock-on effects on the rest of the economy. Investment projects have been halted and delayed, given the uncertainty surrounding both the economic outlook and the global travel recovery. The contraction of Fiji's economy has also been linked to the country's limited fiscal space for government-funded capital projects to counter the effects of the pandemic. The archipelago's incoming stock level stood at USD 5.7 billion in 2020. The tourism sector attracts most of the investment. However, according to the country’s 20-year development plan (2002-2022), the sectors of bio-fuels, fishing, the food industry, forestry (pine trees) and cattle farming should be the ones that will benefit the most from FDI. More recently, China has begun to invest in Fiji (loans for the construction of roads, dams, hotels, etc., including two bridges of about USD 15 million) and is also interested in gold mining and sugarcane. Besides China, Australia, Singapore and Japan are the main investors.

Foreign investment in the Fiji Islands remain very controlled, and tourism is the archipelago’s largest foreign exchange earner. Most of the transfers are subject to long and burdensome administrative procedures. The government's policy, which grants tax concessions to multinational companies investing in Fiji, has not produced the expected results due to problems with the management of the aforesaid tax relief programme. The acquisition of local companies by foreigners, though authorised, is not well-developed due to the bureaucratic burden. All businesses with a foreign investor are required to register and obtain a Foreign Investment Registration Certificate (the previous minimum investment requirement of USD 122,500 has been removed in order to boost investments), and foreign investors have to seek approval prior to any changes in the ownership structure of the business. Furthermore, the complexity of administrative procedures makes it difficult for foreign investors to have access to land ownership. In 2021, Fiji approved a new Investment Act (act 5 of 2021), introducing a broader range of treatment and protection guarantees for foreign investors. Currently, 17 activities are wholly reserved for Fiji citizens, mostly in the services sector, while eight sectors are restricted. Restricted activities in forestry, tobacco production, tourism, real estate development, construction, earthmoving, and inter-island shipping or passenger service require minimum investments ranging from USD 250,000 to 2.5 million; whereas investment in the fisheries sector also requires a 30% local equity in the project. The Fiji Islands ranks 102nd out of 190 countries in the latest Doing Business ranking issued by the World Bank, one spot down in comparison with the previous year. Access to credit is the main point that should be improved.

Country Comparison For the Protection of Investors

	Fiji Islands	East Asia & Pacific	United States	Germany
Index of Transaction Transparency*	2.0	5.9	7.0	5.0
Index of Manager’s Responsibility**	8.0	5.2	9.0	5.0
Index of Shareholders’ Power***	7.0	6.7	9.0	5.0

Source: Doing Business - Latest available data.

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.

Foreign Direct Investment	2019	2020	2021
FDI Inward Flow (million USD)	321	241	401
FDI Stock (million USD)	5,206.2	5,730.3	5,908.5
Number of Greenfield Investments*	1.0	0.0	1.0
Value of Greenfield Investments (million USD)	34	0	3

Source: UNCTAD - Latest available data

Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.

Tax Rates

Value added tax (VAT): 9% (standard rate)
Exports of goods and services and international transportation are generally zero-rated, while the supply of financial services (excluding certain insurance services), residential accommodation, and education by an approved institution are exempt.
Company Tax: 20%
Withholding Taxes: Dividends: 0; Interests: 10%; Royalties: 5%.
Social Security Contributions Paid By Employers: 10% (Fiji National Provident Fund - superannuation). However, following the COVID-19 crisis, the contribution has been lowered to 5% until December 2021.
FNPF contributions are not mandatory in respect of expatriate employees.
Other Domestic Resources: Revenue & Customs Service; Overview of Fiji's tax measures in response to Covid-19; Consult Doing Business Website, to obtain a summary of the taxes and mandatory contributions.

	Fiji Islands	East Asia & Pacific	United States	Germany
Number of Payments of Taxes per Year	38.0	23.4	10.6	9.0
Time Taken For Administrative Formalities (Hours)	247.0	195.1	175.0	218.0
Total Share of Taxes (% of Profit)	32.1	33.8	36.6	48.8

Setting Up a Company	Fiji Islands	East Asia & Pacific
Procedures (number)	11.00	7.25
Time (days)	40.00	29.73

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Personal income tax (Resident individuals)	Progressive rates
From FJD 0 to FDJ 30,000	0 Social responsibility tax (SRT) and environment and climate adaptation levy (ECAL) are levied at 0%
From FJD 30,001 to FDJ 50,000	18% of excess over FJD 30,000 Social responsibility tax (SRT) and environment and climate adaptation levy (ECAL) are levied at 0%
From FJD 50,001 to FDJ 270,000	FJD 3,600 + 20% assessed on amounts over FJD 50,000 Social responsibility tax (SRT) and environment and climate adaptation levy (ECAL) are levied at 0%
From FJD 270,001 to FDJ 300,000	FJD 47,600 + 20% assessed on amounts over FJD 270,000 SRT: 13% assessed on amounts over FJD 270,000 ECAL: 10% assessed on amounts over FJD 270,000 (5% for 2021)
From FJD 300,001 to FDJ 350,001	FJD 53,600 + 20% assessed on amounts over FJD 300,000 SRT: FJD 3,900 plus 14% assessed on amounts over FJD 300,000 ECAL: 10% assessed on amounts over FJD 270,000 (5% for 2021)
From FJD 350,001 to FDJ 400,000	FJD 63,600 + 20% assessed on amounts over FJD 350,000 SRT: FJD 10,900 plus 15% assessed on amounts over FJD 350,000 ECAL: 10% assessed on amounts over FJD 270,000 (5% for 2021)
From FJD 400,001 to FDJ 450,000	FJD 73,600 + 20% assessed on amounts over FJD 400,000 SRT: FJD 18,400 plus 16% assessed on amounts over FJD 400,000 ECAL: 10% assessed on amounts over FJD 270,000 (5% for 2021)
From FJD 450,001 to FDJ 500,000	FJD 83,600 + 20% assessed on amounts over FJD 450,000 SRT: FJD 26,400 plus 17% assessed on amounts over FJD 450,000 ECAL: 10% assessed on amounts over FJD 270,000 (5% for 2021)
From FJD 500,001 to FDJ 1,000,000	FJD 93,600 + 20% assessed on amounts over FJD 500,000 SRT: FJD 34,900 plus 18% assessed on amounts over FJD 500,000 ECAL: 10% assessed on amounts over FJD 270,000 (5% for 2021)
FJD 1,000,001 and above	FJD 193,600 + 20% assessed on amounts over FJD 1,000,000 SRT: FJD 124,900 plus 19% assessed on amounts over FJD 1,000,000 ECAL: 10% assessed on amounts over FJD 270,000 (5% for 2021)
Non-residents	20%

Fiji Islands: Investing

FDI in Figures

Country Comparison For the Protection of Investors

Tax Rates

Individual Taxes

Country Comparison For Corporate Taxation

Investment Opportunities

Business Setup Procedures