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LAND AREA: 259 SQ. KM. BACKGROUND Niue, like Nauru, consists of a single island. It is an uplifted coral island of 250 square kilometers. The Constitution Act of 1974 provides for self-government in free association with New Zealand, with New Zealand accepting most of the responsibilities for foreign relations and defense. INVESTMENT CLIMATE Government Policy Government policy is to support, within reason, any overseas investment proposal which could provide employment for local people, increase opportunities for import substitution and reduce the trade deficit. Proposals relating to horticulture, timber milling, labor intensive light manufacturing and tourism are of particular interest to the Government. Investment Incentives Individual proposals are assessed according to merit for the amount of concession to be given. There are guidelines in place which give the Government wide discretionary powers over import duties on new plant, tariff or quota protection for Niuean industries, taxation rebates and relief, employee training, infrastructure requirements, repatriation of profits and capital and degree of local participation in any enterprise. In the past, tax holidays have been granted for up to five years. Accelerated depreciation may also be granted and, in a small number of cases, exemptions from import duties have been provided. However, availability of tax concessions is now limited to exceptional cases. The granting of concessions and other forms of encouragement to investors is normally based on the following criteria:
Restrictions and Limitations on Foreign Investment Depending on their nationality, there may be restrictions on skilled workers. All Niueans are New Zealand citizens therefore entry of New Zealand citizens is unrestricted. Other nationalities may require a visa or permit. Currently, land can be leased but not sold. There is currently an ongoing land titling project with the aim of registering family interests in all land. There is currently no company legislation in Niue. For business purposes, companies registered elsewhere are recognized. There are no limitations on capital/profit transfers. There are very few restrictions on raw material imports. The main restriction is related to the importation of plants and animals, where investment approval is needed. There is no excise legislation. The Niue Development Bank has lending rates varying between four percent and seven percent per annum. However, access to this capital by foreign investors is discouraged, due to the small amount of funds available. REGULATORY FRAMEWORK There is very little in the way of a regulatory framework. The Development Investment Act 1992 and the accompanying Investment Code are relatively open, both having the objective of imposing minimum restrictions on overseas investment. In general, each application will be considered on its merits. A review and approval mechanism generally involves the relevant officials (for example, agricultural or fishing based industry is via the Director of Agriculture Forestry and Fisheries) advising the Cabinet (the Premier and three Ministers). Cabinet makes the final decision on all investment submissions. Tax incentives are not, however, likely to be available except in exceptional cases of very high benefits accruing to the Niuean economy. OPERATIONAL PROCEDURES Labor and Labor Regulation Approximately 50 percent of the population of around 2,300 is between the ages of 15 and 59 years. The active workforce, including purely subsistence activity, is around 1,100. Many people are engaged in subsistence farming and not recorded in official statistics for paid employment. Paid employment opportunities are very few with the majority being in the public service, in direct government administration or with the statutory bodies such as the Niue Development Bank and the Niue Broadcasting Corporation. The Public Service Association is the only 'union' on the Island and labor disputes are rare. Banking There is one Commercial bank (Westpac) on the Island and all loans are subject to Westpac's internal rriterin Taxation Niue has a very simple tax system applying only income taxes on both companies and individuals Income Tax Companies Resident company rate 30% Non-Resident company rate 30% Individuals Taxation is on a sliding scale from a minimum rate of 10 percent to a maximum of 50 percent. The same rates apply for both resident and non-resident individuals and are as follows:
PROMOTION OF INVESTMENT OPPORTUNITIES The Niue Government is extremely interested in attracting foreign investment and Ministers and officials will consider submissions and support those which offer benefits to the country. A current program aims to encourage the tourism industry, initially with the aim of fully utilizing seating capacity on current flights. There are no official promotion documents other than entries in the:
Contacts for Further Information: Economic Adviser General Manager
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