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Planning and Registering your business in PNG

16 May 2016

Peter Maletz

Why do business in PNG?

Opportunities are plentiful Limited expat suppliers Cheap labour Technology is improving Oil & Gas sector is red hot

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Doing business in PNG

3 forms of business structure Foreign Contractor Branch of an overseas company Local PNG Company

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Foreign Contractor

Prescribed contract Withholding tax 12% Discretion to assess actual taxable income at

48%

A simpler option, but not for everyone

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Branch of an Overseas Company

Tax rate 48.5% Audited accounts – with exemptions

Not too attractive? Used correctly, this can be a very effective cross border business structure

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Local PNG Company

Tax rate 30% Dividend withholding tax 17% Required to be audited Requires a local ordinarily resident PNG director

Provides a local presence and allows you to capitalise on all associated benefits

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The Registration Process

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Exchange Controls

Administered by the Bank of Papua New Guinea Authorised dealers approve transactions (ie

Banks) Tax Clearance Certification required for

>K200,000 per calendar year.

Be aware of controls in place and take action to minimise their impact

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Personal Property Securities Register

Operative from 9 May 2016 Similar to Australia Register title to business assets

Seek advice to avoid risk of loss

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Bust a Myth

MYTH: It’s too dangerous to do business in PNG

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FACT: Follow the well beaten expat path

MYTH: The red tape is impossible!

FACT: Use advisers who know the system

MYTH: You must have local ownership

FACT: The reality is, foreign is fine

DisclaimersThis document contains information in summary form and discusses proposed but not legislated rules and is therefore intended for general guidance only.

It is not intended to be a substitute for detailed research or the exercise of professional judgement. It does not purport to be comprehensive or to render professional advice. The reader should not act on the basis of any matter contained in this publication without first obtaining specific professional advice.

We believe that the statements made by us in this document are accurate but no warranty of accuracy or reliability is given. Our conclusions are based on interpretations of accounting standards and other relevant professional pronouncements and legislation current as at the date of this document. Should the interpretations, accounting standards, other relevant professional pronouncements or legislation change, our conclusions may not be valid.

© Hanrick Curran, 2016

All rights reserved

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Thank you!

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