Any
business which has any foreign ownership interest may
be required to obtain an FSM Foreign Investment
Permit. If the business is doing anything that can be
considered international or interstate or if the
business is involved in banking, insurance,
telecommunication, interstate/international
transportation or fishing inside of the 200-mile EEZ
of the FSM, the business will need a national foreign
investment permit. Foreign-owned
Businesses in other areas usually require a Foreign
Investment Permit in the State where they will be
operating. Note
that foreign business bidding or performing contracts
funded with Grants from the Compact of Free
Association, are usually exempt from these
requirements and do not required an FIP to perform the
contract.
Determining
which permit is needed and working through the process
can be complicated. We can assist you with this
process.
Visitor visas are
issued upon arrival. Foreign investments and working
permits are required before arrival and can be
obtained by writing to contacting the FSM Department
of Resources and Development.
The Federated States
of Micronesia has a stable democratic form of
government modeled after that of the United States.
Through the Compact
of Free Association (Treaty) with the United States,
the FSM is guaranteed security protection by the US.
The FSM uses the US
dollar as its currency, assuring investors that
investment will not be subject to unexpected
currency fluctuations to the extent that the US is
the market or sources of supply.
Easy access by air
and sea to major markets such as the US Pacific Rim,
New Zealand, Australia, and Guam.
Modern
telecommunications system and state of the art
technology such as telephones, telex, facsimile
services and switching equipment.
Apart from the FSM
Development Bank, the Bank of Hawaii, Bank of Guam,
and the Bank of the FSM are on hand to provide
modern international banking services linking the
nation to the rest of the world.
Inexpensive rates for
long-term land leases for business sites.
Under treaty
arrangement, the FSM has no quota restrictions to US
markets for domestic or value-added products.
The FSM also enjoys
preferential market access to other Pacific island
countries including New Zealand and Australia. Under
the South Pacific Regional Trade Economic
Cooperation Agreement (SPARTECA), a non-reciprocal
trade agreement, Australia and New Zealand offer
unrestricted duty-free access to virtually all
products originating from developing member
countries, provided certain rules of origin are met.
Potential for duty-free access to Japan and other
Asian markets also exists.
All exports of
products as well as re-exports of import products
are tax free.
The Exclusive
Economic Zone (EEZ) includes some of the richest
tuna fishing grounds in the world.
Government-subsidized
water and electrical services in all four states of
the nation.
Young and relatively
inexpensive labor force.
Low local taxes.
Along with
significant US financial assistance, the US also
agreed to extend several programs to the FSM,
including the US Trade and Development Program, the
Small Business Administration, the Economic
Development Administration, the Farmers Home
Administration, the Job Training Partnership Act,
and the Overseas Private Investment Corporation (OPIC).
OPIC is particularly important in that it provides
political risk insurance, finance, direct loans, and
loan guarantees.
The FSM Government
welcomes and supports foreign investment as part of
its overall economic development strategy.
A tropical paradise
with year-round warm climate in a myriad of islands,
the FSM has a clean and unspoiled environment and
rich natural beauty.
