Foreign Investment Regulations 2006

1 Short Title ........................................................................................................ 5

2 Interpretation.................................................................................................... 5

3 Reserved list..................................................................................................... 5

4 Restricted list ................................................................................................... 6

5 Prohibited list................................................................................................... 6 6 Application for Foreign Investment Registration Certificate.......................... 6 7 Issue or Refusal of Foreign Investment Registration Certificate ..................... 6

8 Foreign Investment Register ............................................................................ 6

9 Transfer of certificate....................................................................................... 7

10 Cancellation of Certificate ............................................................................... 7

11 Appeal to Minister ........................................................................................... 7

12 Appeal to Supreme Court................................................................................. 8

13 Time cancellation comes into effect ................................................................ 8

14 Amendment of Register and Certificate .......................................................... 8

15 Fees .................................................................................................................. 9 SCHEDULE 1 10 RESERVED LIST .............................................................................................10 SCHEDULE 2 11 RESTRICTED LIST ..........................................................................................11 Page 3 to Arrangement of Regulations Foreign Investment Regulations 2006 SCHEDULE 3 12 FEES ................................................................................................................12 FORMS 13 FORM 1 ............................................................................................................13 FOREIGN INVESTMENT REGISTRATION CERTIFICATE ............................13 FORM 2 ............................................................................................................19 FOREIGN INVESTMENT REGISTRATION CERTIFICATE ............................19 Page 4 to Foreign Investment Regulations 2006 Regulation 1 C T FOREIGN INVESTMENT REGULATIONS 2006 In exercise of the powers conferred by section 18 of the Foreign Investment Act 2002, the Minister with the consent of Cabinet hereby makes the following Regulations Commencement [2 April 2007]

1 Short Title These Regulations may be cited as the Foreign Investment Regulations 2006.

2 Interpretation In these Regulations, unless the context otherwise requires – “Act” means the Foreign Investment Act 2002; and “Application” means an application for a Foreign Investment Registration Certificate made under the Act and “applicant” shall have a corresponding meaning.

3 Reserved list For the purposes of section 4(1) of the Act, the Reserved List is prescribed in Schedule 1. Page 5 to Regulation 4 Foreign Investment Regulations 2006

4 Restricted list For the purposes of section 4(2) of the Act, the Restricted List is prescribed in Schedule 2.

5 Prohibited list The list of prohibited activities is prescribed in Schedule 1 of the Business Licences Act 2002.

6 Application for Foreign Investment Registration Certificate (1) An application for a foreign investment registration certificate shall be – (a) made in the form prescribed in Form 1; and (b) filed with the Ministry of Labour, Commerce and Industries. (2) Where an application is – (a) incomplete, the Secretary shall request the applicant in writing to complete the application; or (b) complete, the applicant shall be issued with a receipt indicating the date of receipt.

7 Issue or Refusal of Foreign Investment Registration Certificate (1) Where a completed application is received, the Secretary shall within 7 working days either issue the applicant with a certificate or advise the applicant in writing of the grounds for refusing the application. (2) A foreign investment registration certificate shall be issued in the form prescribed in Form 2.

8 Foreign Investment Register (1) The Secretary shall establish and maintain a foreign investment register in a form approved by the Secretary. (2) The foreign investment register shall contain the following information - (a) the name of the applicant; (b) the Registration number of the certificate; (c) the name and nominated address in Tonga of the holder of the certificate; (d) the business activity which is approved; Page 6 to Foreign Investment Regulations 2006 Regulation 9 (e) details of any prescribed conditions applying to the approval of the certificate; and (f) date of issue of the certificate. (3) The foreign investment register shall be available for inspection or copying of entries by the public during normal business hours upon payment of the prescribed fees set out in Schedule 4. (4) Where a certificate is transferred under section 13 of the Act, the details of the transferee shall be added to the foreign investment register. (5) Where a certificate is cancelled under section 11 of the Act or by operation of any other relevant law, the foreign investment register shall contain details of the date of cancellation and the reason for cancellation.

9 Transfer of certificate (1) An application to transfer a certificate under section 13 of the Act shall be made by the certificate holder in writing to the Secretary and accompanied by an application by the proposed transferee in the form prescribed in Form 1. (2) The provisions of section 8 of the Act apply to the application to transfer a certificate.

10 Cancellation of Certificate (1) Where the Secretary proposes to cancel a certificate pursuant to section 11 of the Act, the Secretary shall advise the holder of the certificate by notice in writing of - (a) the reason for the proposed cancellation; and (b) that the holder has an opportunity to make a written submission to the Secretary within 14 working days. (2) Subject to sub-regulation (1) the Secretary shall, within 14 working days, review all information submitted by the holder of the certificate. (3) Where the Secretary makes a decision to cancel the certificate, he shall advise the holder in writing, within 7 working days of - (a) the reason for his decision; and (b) the certificate holder’s right of appeal under the Act.

11 Appeal to Minister (1) An appeal made under the Act shall be made in writing to the Minister within 14 working days of receipt of the notice to the applicant. Page 7 to Regulation 12 Foreign Investment Regulations 2006 (2) The Minister shall within 7 working days appoint an Arbitrator to decide the appeal. (3) The Arbitrator shall within 28 working days from being appointed decide the appeal and provide the Minister with a written decision. (4) The Minister shall within 7 working days of receiving the Arbitrator’s written decision advise the applicant in writing of the decision of the appeal.

12 Appeal to Supreme Court A foreign investment business whose certificate is cancelled by the Secretary under section 11 of the Act may appeal to the Supreme Court against the decision to cancel the certificate and any such cancellation shall be suspended pending the outcome of the appeal.

13 Time cancellation comes into effect Where the Secretary cancels a certificate in accordance with section 11 of the Act, the cancellation shall not come into effect until in the case of the holder of a certificate who – (a) does not exercise a right of appeal within 28 working days as specified under regulation 11(3); or (b) exercises a right of appeal within the time prescribed under regulation 11, from the date of judgment.

14 Amendment of Register and Certificate (1) Where the holder of a certificate becomes aware that the information contained on the certificate and/or the foreign investment register is no longer correct due to a change in circumstances, the holder of the certificate shall within 30 working days advise the Secretary in writing of the changes. (2) Where the Secretary receives a notice under sub-regulation (1) he shall amend the register within 7 working days of receiving the notice. (3) Where the Secretary receives a notice under sub-regulation (1) he shall issue the holder of a certificate with an amended certificate upon application and payment of the prescribed fee as set out in Schedule 4. (4) Where the Secretary amends the foreign investment register, he shall within 7 working days of the amendment provide notice in writing of the amendment to the holder of the certificate. Page 8 to Foreign Investment Regulations 2006 Regulation 15

15 Fees The fees prescribed in Schedule 4 shall apply for the purposes of these Regulations. Page 9 to Schedule 1 Foreign Investment Regulations 2006

SCHEDULE 1 (Regulation 3) RESERVED LIST 1. Taxis 2. Passenger vehicles for hire 3. Used motor vehicle dealers 4. Retailing activity which consist of the distribution of grocery products (food & household provisions) for final consumption 5. Wholesaling activity 6. Baking of white loaf bread 7. Tongan cultural activities, including: i. folktales, folk poetry, and folk riddles; ii. folk songs and instrumental folk music; iii. folk dances, and folk plays; iv. production of folk arts in particular, drawings, paintings, carvings, sculptures, woodwork, jewelery, handicrafts, costumes, and indigenous textile 8. Raising of chicken for the production of eggs 9. Security business 10. Export of green and mature coconuts 11. Wiring and installation of residential and commercial buildings with capital investment of less than $500,000 12. Production / Farming of: (a) root crops (yams, taro, sweet potato, cassava); (b) squash; (c) paper mulberry; (d) pandanus ; and (e) kava 13. Fishing activities comprising: (a) Reef fishing (b) Inshore fishing within 12 nm (Zone C) in water less than 1000 meters (c) Bottom fishing in water depth less than 500 m Page 10 to Foreign Investment Regulations 2006 Schedule 2

SCHEDULE 2 (Regulation 4) RESTRICTED LIST No Business activity Condition . 1. Commercial fishing comprising: Subject to their respective Resource − Tuna fishing Management Plan − Bottom fishing in water deeper (administered by the Ministry of than 500m Fisheries) − Other deep water fishing not less than 100 m 2. − Aquaculture Subject to the requirements of the Pesticide Act 2002 Agricultural supply store distributing 3. seeds, fertilizers, chemicals. Subject to requirements of the Education Act (Cap.86) 4. Education facility Subject to the requirements of the Public Medical or Health activity Health Act 1992; Therapeutic Goods Act 2001; Nursing Act 2001; Medical and Dental Practices Act 2001; Pharmacy Act 2001;Health Practitioners Review Act 2001. Page 11 to Schedule 3 Foreign Investment Regulations 2006

SCHEDULE 3 (Regulation 15) FEES Item Activity When payable Fee $ 1. Application for a certificate When application is $100 made 2 Application to amend a certificate. When application is $15 made 3 Application to transfer a certificate When application is $45 made 4 Inspection of Foreign Investment Prior to inspection $10 Register 5 Copying of Foreign Investment Register Upon application for $10 copy Page 12 to Foreign Investment Regulations 2006 FORMS FORMS FORM 1 Ministry of Labour, Commerce & Industries P.O. Box 110, Nuku’alofa, Tonga Tel: (676) 27302 Fax: (676) 23887 E-Mail: secretary@mlci.gov.to APPLICATION FORM for FOREIGN INVESTMENT REGISTRATION CERTIFICATE Notes in italics in this form are intended for general guidance only FOREIGN INVESTOR INFORMATION 1. Proposed Name of Foreign Investment Business 2. Intended Address of Foreign Investment Business: Street Name Town Island 3. Authorized/Nominated Contact Person: Title First Name Last Name Position in Foreign Investment Business: Page 13 to FORMS Foreign Investment Regulations 2006 Mailing Address: Business Phone: Mobile No: Fax: E-mail: 4. Nominated Mailing Address in Tonga: Postal Box Town Island 5. Ownership Structure of Foreign Investment Business: ˆ Sole Proprietor ˆ Partnership ˆ Company 6. Details of Owners If sole proprietor or partnership, please provide details of individual owners; If company, please provide details of individual shareholders Name Date of Position Residential % of Shares Country of Birth. address Citizenship (Please attach a separate page if more space is required to list all such persons.) BUSINESS ACTIVITY & INVESTMENT INFORMATION: 7. Description of Business Activity ¾ Do you intend to carry on business in the following categories of activities? Page 14 to Foreign Investment Regulations 2006 FORMS ˆ Commercial Fishing Yes ( ) No ( ) If you answered (Yes) above, have you complied with the respective Resource Management Plan administered by the Ministry of Fisheries? Yes ( ) No ( ) ˆ Agricultural supply, store distributing seeds, fertilizers and chemicals Yes ( ) No ( ) If you answered (Yes) above, have you complied with the requirements of the Pesticide Act 2002? Yes ( ) No ( ) ˆ Educational Facilities Yes ( ) No ( ) If you answered (Yes) above, have you complied with the requirements of the Education Act (Cap. 86)? Yes ( ) No ( ) ˆ Medical or Health Activity Yes ( ) No ( ) If you answered (Yes) above, have you complied with the requirements of the Public Health Act 1992; Therapeutic Goods Act 2001; Nursing Act 2001; Medical and Dental Practices Act 2001; Pharmacy Act 2001 or the Health Practitioners Review Act 2001? Yes ( ) No ( ) ¾ If your intended business activity does not fall within the categories outlined in 7 above, please list and describe the activities to be undertaken by the Foreign Investment Business: (Please attach a separate page if required to list and describe all the activities to be undertaken) 8. Investment Capital Information Total Value of Investment ¾ Foreign Citizen Investment TOP ¾ Tongan Citizen Investment TOP Total Value of Fixed Assets of the enterprise TOP Page 15 to FORMS Foreign Investment Regulations 2006 ADDITIONAL INFORMATION: 9. Current Business Involvement ¾ Are any of the owners (as listed under heading 6 above) involved in any other Foreign Investment Business in Tonga. Yes ( ) No ( ) ¾ If you answered (Yes) above, please provide details below: Name of the Business: Name of Shareholders: Business Activity: FIRC No.: 10. Solvency Status Are any of the owners (as listed under heading 6 above) an un-discharged bankrupt, in receivership or liquidation under the laws of Tonga or any other country? Yes ( ) No ( ) FOR STATISTICAL PURPOSES ONLY: 11. Proposed level of Total Investment Costs: Year 1 ($TOP) Year 2 ($TOP) Year 3 ($TOP) 12. Proposed Level of Employment: Tongan Citizens: _________________________ Foreign Citizens: _________________________ Page 16 to Foreign Investment Regulations 2006 FORMS FEES ¾ Method of Payment of Fees Purpose Fees Cash/Cheque Application for Foreign Investment Certificate $100 Application for Transfer of Foreign Investment Certificate $45 ¾ How would you like to be notified of the decision for your application? Method of Decision Notification Tick as appropriate Personal Collection Receive by Mail (Decision would be sent to the nominated mail address in Tonga) DECLARATION: I/we, the undersigned, being duly authorized by the foreign investor, declare that the information contained in this application is correct and complete and I/we authorize the Secretary for Ministry of Labour, Commerce & Industries to make all necessary inquiries and to conduct all necessary action in relation to this application. Name(s): ……………………………………………… Position(s): …………………………………… Signed at: …………………………….. this ………… day Of ………………………………… , ……………………………. Month year Signature (s): …………………………………………….. The completed form should be submitted either in person or by post to: The Secretary Ministry of Labour, Commerce & Industries Free Wesleyan Building Page 17 to FORMS Foreign Investment Regulations 2006 Fasi-mo e-afi P.O. Box 110 Nuku’alofa TONGA Only fully completed, original, signed forms will be processed by the Ministry of Labour, Commerce and Industries. Official use: Applicant: Business Activities: Are any of the activities to be undertaken by the foreign investor reserved activities under Regulation 3 of the Foreign Investment Act 2002? ( ) Yes ( ) No Are any of the activities to be undertaken by the foreign investor restricted activities, under Regulation 4 of the Foreign Investment Act 2002? ( ) Yes ( ) No Does the investor qualify for a Foreign Investment Registration Certificate? ( ) Yes ( ) No Signature: ……………………………. Date: ……………….. Foreign Investment Officer Decision: ( ) Refuse ( ) Grant Signed ……………………………… Date: ………………… Secretary Ministry of Labour, Commerce & Industries Page 18 to Foreign Investment Regulations 2006 FORMS FORM 2 FOREIGN INVESTMENT REGISTRATION CERTIFICATE Ministry of Labour, Commerce & Industries FOREIGN INVESTMENT REGISTRATION CERTIFICATE Registration Certificate No._______ By virtue of the powers vested in me by section (5) of the Foreign Investment Act 2002 I hereby grant this certificate to: (Name of the applicant) of (Name of the company/business), (mailing address in Tonga) to carry on business in the following relevant activities: (Name of the activity as it appears on the Business Licences Regulation) On the following condition(s): Stipulate the conditions (if the activity is a restricted activity) And also subject to the provisions of the Foreign Investment Act 2002. This certificate is not transferable and remains valid until it is surrendered or cancelled Date of Issue: _____________ …………………………… Secretary Ministry of Labor, Commerce & Industries ………………………………… Official stamp Page 19 to Endnotes Foreign Investment Regulations 2006 ENDNOTES Page 20 to