Doing Business in PNG

What do you need to start a business?

Although doing business in Papua New Guinea (PNG) can be challenging, there are also many positive aspects to consider. Here are a few points to consider when doing business in PNG:

Resource-Rich – PNG is rich in natural resources, including oil, gas, gold, copper, and timber, which can provide opportunities for businesses operating in these sectors.

Growing Economy – Despite its economic challenges, PNG’s economy has been growing in recent years, and this trend is expected to continue in the coming years.

Strategic Location – PNG is located in the Pacific region, which is a rapidly growing area, and it is well-positioned to take advantage of economic opportunities in the region.

Government Support – The PNG government has made efforts to improve the business environment and encourage investment, including by implementing reforms to improve the legal and regulatory framework.

Diverse Market – PNG has a large and diverse population, which can provide a range of business opportunities, especially in sectors such as consumer goods, healthcare, and education.

Overall, while doing business in PNG can be challenging, there are also many opportunities for those who are able to navigate the various obstacles and take advantage of the country’s resources and strategic location.

IPA Registration
All businesses are required to register with the Investment Promotion Authority. This is an only process taking no longer than 48 hours.
IRC Registration
The next step is to register for Tax Identification Number (TIN) with the Internal Revenue Commission. This process should take 2 weeks
Bank Account Setup
Each Commercial Bank has their own requirements, so check with your preferred bank in ensuring they are all me. IPA Certification and TIN are both required.

Business Registration

The Investment Promotion Authority (IPA) through the Companies Office is responsible for administering key business laws in Papua New Guinea, such as the Companies Act, Business Names Act, Business Groups Incorporation Act and the Associations Incorporation Act. The Internal Revenue Commission (IRC) is responsible for assessing and collecting all national internal revenue taxes, fees, and charges as required by law.

Investors in Papua New Guinea must comply with various laws and regulations, including those of the National Government on foreign exchange, taxation, customs, licenses and permits for various activities such as mining and petroleum exploration, agriculture, fisheries, forestry, and industrial activities. Provincial Governments and urban authorities also issue licenses, and it is the responsibility of investors to ensure they comply with all relevant laws and regulations, including the Investment Promotion Act 1992 and the Internal Revenue Act 2014.
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Investment Promotion Authority
The Investment Promotion Authority (IPA) is a government agency that implements policies and programs aimed at increasing total annual investments in Papua New Guinea (PNG). The IPA focuses on increasing non-mining sector investments and increasing the level of investments financed by the domestic sector. In addition to promoting investment opportunities in PNG, the IPA also has a mandatory role of providing information on export opportunities to international markets, creating awareness on investment queries from the public, and facilitating business introductions through its database of foreign and domestic investors and networking partners.
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Internal Revenue Commission
The Internal Revenue Commission (IRC) of Papua New Guinea is a government agency responsible for the administration and collection of taxes in the country. It is responsible for implementing and enforcing tax laws and regulations, and ensuring that taxpayers comply with their tax obligations. The IRC carries out a range of activities in relation to tax administration and collection, including assessment and collection of taxes, provision of tax advice and guidance, and enforcement of tax laws and regulations. The agency also works closely with other government agencies and stakeholders to ensure that the tax system in PNG is fair, transparent, and efficient.

Setting Up A Business

Before starting a business, underastand why you want to start one in the first instant. The main reasons why people start as business are as follows:

Financial gain – One of the main reasons people start a business is to make money. Starting a business can provide an opportunity to earn more than what they would as an employee, and to gain financial independence.

Flexibility and control – Starting a business allows individuals to have more control over their work schedule, work environment, and business decisions. This can provide a sense of autonomy and fulfillment.

Passion – Many entrepreneurs start a business because they have a passion for a particular product or service. They want to turn their passion into a career and make a difference in the world.

Unemployment – Starting a business can be an option for those who are unemployed or underemployed and want to take control of their own career.

Innovation – Starting a business also allows individuals to be creative, to develop new products or services, and to improve existing ones. Entrepreneurs often want to bring something new to the market, to improve the lives of others and to make a positive impact in their community.

The majority of businesses in Papua New Guinea are small and locally-owned, and are involved in sectors such as agriculture, forestry, fishing, and retail trade. There are also significant numbers of businesses involved in the mining, oil and gas, and construction sectors.

In addition to these, there are also professional services businesses, such as law firms and accounting firms, and a growing number of tourism-related businesses. The makeup of the business sector in Papua New Guinea is constantly evolving as the economy and industries in the country develop and change.

Business Setup Process

Starting a business in Papua New Guinea can be a complex process, as it involves following several steps and obtaining various licenses and approvals.

Here is an overview of the general process:

Choose a business structure – The first step is to decide on a business structure, such as a sole proprietorship, partnership, or limited liability company.

Register your business – You will need to register your business with the Internal Revenue Commission (IRC) and obtain a tax file number (TFN).

Obtain a business license –Depending on the nature of your business, you may need to obtain a business license from the appropriate regulatory body.

Register for taxes – You will need to register for various taxes, including income tax and value-added tax (GST).

Comply with employment laws – As an employer, you will need to comply with employment laws, including those related to minimum wage, leave entitlements, and employee protections.

Consider insurance – It is a good idea to consider insurance to protect your business and its assets.

It is advisable to seek professional legal and financial advice when starting a business in Papua New Guinea, as the specific requirements and processes may vary depending on the nature of your business and its location.

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