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Foreign Investment (Amendment) Act 2001

Assent: 29 June 2001
Commencement: 16 July 2001

FOREIGN INVESTMENT (AMENDMENT) ACT
NO 5 OF 2001

Arrangement of Sections

1. Amendments
2. Commencement
   

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Assent 29 June 2001
Commencement 16 July 2001

REPUBLIC OF VANUATU

FOREIGN INVESTMENT (AMENDMENT) ACT
NO. 5 OF 2001

An act to amend the Foreign Investment Act No. 15 of 1998

Be it enacted by the President and Parliament as follows-

1. Amendments

The Foreign Investment Act No. 15 of 1998 is amended as set out in the Schedule and any other item in the Schedule has effect according to its terms.

2. Commencement

This Act commences on the day on which it is published in the Gazette.

SCHEDULE

AMENDMENTS OF THE
FOREIGN INVESTMENT ACT NO. 15 OF 1998

1. Short title

Repeal the title, substitute

“VANUATU FOREIGN INVESTMENT PROMOTION ACT NO. 15 OF 1998”.

2. Long title

Delete “Foreign Investment Board”, substitute “Vanuatu Investment Promotion Authority”.

3. Section 1

Repeal the section, substitute

“1 Purpose of Act

The purposes of this Act are:

(a) to promote and facilitate investment in Vanuatu by foreign investors; and

(b) to provide an efficient, effective and transparent system for appraising and approving investments proposals by foreign investors; and

(c) to promote investments by foreign investors that will materially benefit Vanuatu and its people by:

• (i) contributing to sustainable economic growth; and
  
• (ii) creating employment; and
  
• (iii) utilising natural resources and, in particular renewable resources; and
  
• (iv) increasing the volume and value of exports; and
  

(d) to facilitate and expedite investments through Ministries, Departments and other government bodies.”.

4 Subsection 1A(1)
Repeal the subsection, substitute

“(1) This section establishes and confirms the right of citizens of Vanuatu and local companies of the kind referred to in subparagraphs 3(1)(b)(i) and (ii) to enter into joint ventures, partnerships and other associations with foreign investors in investments that are not reserved investments.”.

5 Subsection 1A(2)

(a) Delete “may obtain”, substitute “must apply for “;

(b) Delete “and reserved”.

6 Subsection 1A(3)
Repeal the subsection.

7 Subsection 2(1)
Insert in its correct alphabetical position

“Authority means the Vanuatu Investment Promotion Authority established under section 14A;”.

8 Subsection 2(1) (definition of Board)
Repeal the definition, substitute

“Board means the Board for the Vanuatu Investment Promotion Authority established under section 15;”.

9. Subsection 2(1)

Insert in its correct alphabetical position

“local company has the same meaning as in the Companies Act [CAP 191];”.

10 Subsection 2(1) (definition of reserved investment)
After “out”, insert “in the Reserved Investments Table”.

11 Subsection 2(3)
Repeal the subsection.

12 After section 2
Insert

“2A Policy directions

The Minister may in writing give the Board general directions in relation to investment policy. Such directions must be consistent with the provisions of this Act.”.

13 Paragraph 3(1)(b)
Repeal the paragraph, substitute

“(b) Part 2 of the First Schedule are reserved investments for citizens of Vanuatu and local companies that

(i) are wholly controlled by persons who are citizens of Vanuatu; or

(ii) have all of their shares (voting or otherwise) beneficially owned or controlled by persons who are citizens of Vanuatu;

and a foreign investor cannot enter into any joint venture, partnership or association with any such citizen or company in relation to those reserved investments, being investments for which the Board must not grant an approval certificate.”.

14 Subsection 6(1)
Delete “apply to the Board”, substitute “apply in the prescribed form to the Authority”.

15 Paragraph 6(2)(f)
Repeal the paragraph, substitute

“(fa) full details, including passport particulars of:

(i) the foreign investor if an individual; or

(ii) in any other case - the legal and beneficial owners of the foreign investor, being owners who are not citizens of Vanuatu and who intend to reside on a full time or part time basis in Vanuatu;

(f) the number of employees who are not citizens of Vanuatu and an estimate of the number of persons to be employed during the first 3 years of the investment;”.

15A At the end of paragraphs 8(3)(a) and (b)
Add “or”.

15B At the end of subsection 8(3)
Add

“(c) will interfere with an exclusive right of investment granted by the Board under subsection (6C).”.

15C After subsection 8(6B)
Insert

“(6C) The Board may approve an application for a proposed investment on the condition that the foreign investor has an exclusive right in relation to that investment for a period specified by the Board, being a period that does not exceed 5 years.”.

16 Subsection 8 (9)
Delete “, for a period of 5 years”, substitute “and section 8A”.

17 Section 8A
Repeal the section, substitute

“8A Fees for approval certificates

(1) The foreign investor named in an approval certificate must pay to the Authority the prescribed fee for the issue and annual renewal of the certificate on or before the prescribed date.

(2) If a foreign investor fails to pay the prescribed fee by the prescribed date, the Authority may, by notice in writing to the foreign investor, cancel his, her or its approval certificate.

(3) This section applies to an approval certificate whether issued before, on or after the commencement of this section.”.

18 After section 9
Insert

“9A Variation of approval certificate

(1) A foreign investor issued with an approval certificate may apply to the Authority to vary:

(a) the investment activity; or

(b) the location of the investment; or

(c) any other condition of the certificate.

(2) The application must be in the prescribed form and be accompanied by the prescribed fee.

(3) The Board must determine the application within 14 days of it being made.

(4) The Board must advise the foreign investor in writing of its decision within 7 days after making it.”.

19. Subsections 10 (1), (2) and (3)

Repeal the subsections, substitute

“(1) An approval certificate entitles the foreign investor named in the certificate:

(a) subject to the foreign investor complying with the Immigration Act

[CAP 66], to be issued with:

(i) residence permits for at least 2 key positions requiring professional, technical or managerial expertise; and

(ii) such other number of residence permits as are specified in the certificate; and

(b) subject to the foreign investor complying with the Labour (Work Permits) Act [CAP 187], to be issued with:

• (i) work permits for at least 2 key positions requiring professional, technical or managerial expertise; and
  

(ii) such other number of work permits as are specified in the certificate; and

(c) subject to the foreign investor complying with the Business Licence Act No 19 of 1998, to be issued a business licence if the project requires a business licence; and

(d) to be issued with a certificate to negotiate under section 6 of the Land Reform Act [CAP 133] and subject to the foreign investor complying with that Act and the Land Leases Act [CAP 163], to be granted a lease of land if the project requires land; and

(e) subject to the Value Added Tax Act No.12 of 1998, the Import Duties (Consolidation) Act [CAP 91] and the Customs Act No. 15 of 1999, to an exemption from either value added tax or import duty, or both, for the whole or a part of the investment.

(2) The foreign investor must also comply with the requirements of any other law that requires the granting of a permit, licence or other approval (however described) before undertaking the activity involved in the investment proposal.”.

20 Paragraph 10(4)(d)
Repeal the paragraph, substitute

“(d) whether the employment of persons who are not citizens of Vanuatu in professional, technical or managerial positions will lead to the employment of additional persons who are citizens of Vanuatu.”.

21 Subsections 10(5), (6),(10), (11) and (12)
Repeal the subsections.

22 Part 3 (heading)
Repeal the heading, substitute

“PART 3 – VANUATU INVESTMENT PROMOTION AUTHORITY”.

23 Section 14
Delete “Foreign Investment Board”, substitute “Vanuatu Investment Promotion Authority”.

24 After section 14
Insert

“14A Establishment of the Vanuatu Investment Promotion Authority

(1) The Vanuatu Investment Promotion Authority is established.

(2) The Authority is:

• (a) is a body corporate with perpetual succession; and
  
• (b) has a common seal; and
  
• (c) may sue and be sued.
  

14B Functions of the Authority
The functions of the Authority are:

(a) to provide information to foreign investors within and outside Vanuatu; and

(b) to promote investments by foreign investors in Vanuatu in close collaboration with the private sector and other relevant government bodies; and

(c) to receive and appraise investment proposals in accordance with this Act and present them to the Board for consideration and approval; and

(d) to encourage and facilitate investment in Vanuatu by assisting foreign investors to obtain all necessary permits, licences and other approvals (however described); and

(e) to facilitate the introduction of citizens of Vanuatu and foreign investors to each other and to investments and other activities of mutual benefit; and

(f) to prescribe a system of certification in relation to foreign investors; and

(g) to monitor the investments and activities of foreign investors for the purpose of determining whether they are complying with certificates of approval, permits, licences and other approvals; and

(h) to establish and maintain a register of investment opportunities for foreign investors; and

(i) to advise the Minister on policy issues relevant to this Act; and

(j) to carry out any other functions conferred on it by this Act or another Act.

14C Powers of the Authority
The Authority has all the powers necessary to perform its functions.”.

25 Section 15 (heading)
Repeal the heading, substitute

“15 Board for the Vanuatu Investment Promotion Authority”.

26 Subsection 15(1)
Repeal the subsection, substitute

“(1) A Board for the Vanuatu Investment Promotion Authority is established.

(1A) The Board is to perform the functions, exercise the powers and direct the affairs of the Authority. In so doing, the Board must have regard to any directions given by the Minister under section 2A.”.

27 Subsection 15(2)
Repeal the subsection, substitute

“(2) The Board consists of the following:

(a) the Director responsible for industry and trade;

(b) the Commissioner of Labour;

(c) the Principal Immigration Officer;

(d) a person nominated by the Vanuatu Chamber of Commerce and Industry;

(e) a representative of the Minister;

(f) the Director of the Department responsible for lands;

(g) the CEO who will be an ex-officio member;

(h) the Director-General of the Ministry responsible for finance or his or her nominee who must be either the Director of the Department responsible for economic and social development or the Director of the Department responsible for finance;

(i) the Director of Customs.”.

28 Paragraph 15(2A)(b)
After “financial”, insert “or business”.

29 After subsection 15(4)
Insert

“(4A) The Board may select a Deputy Chairperson from amongst the members of the Board.

(4B) The Chairperson and the Deputy Chairperson hold office for a period of 2 years or until they cease to be members, whichever first occurs, and are eligible to be re-selected.”

30 Subsection 15(5)
Repeal the subsection, substitute

“(5) The Minister is to determine in writing the remuneration (if any) and allowances (if any) that are payable to members of the Board.”.

31. Subsection 15(6)

Repeal the subsection, substitute

“(6) Subject to this section and sections 19 and 20, the Board is to determine its own procedures.”.

32. Subsection 18(1)

(a) After “application”, substitute “and other fees”.

(b) Delete “Board” (second occurring), substitute “Authority”.

33 Subsection 18(2)
Delete “Board:, substitute “Authority”.

34 After section 18
Insert

“18A Funds of the Authority

The funds of the Authority consist of the following:

(a) monies appropriated to the Authority by the Appropriation Acts;

(b) grants received from the Government and any other sources;

(c) fees received by the Authority under section 18.

18B Application of funds
Subject to subsection 18(2), the funds of the Authority are to be expended only on the following:

(a) in payment of the discharge of its functions under this Act;

(b) in payment of remuneration and allowances to members of the Board;

(c) for such other purposes that are consistent with this Act determined by the CEO after consultation with the Board.”.

35 After subsection 21(4)
Insert

“(4A) The CEO is the head of the staff of the Authority and is responsible to the Board for the efficient carrying out of the functions of the Authority.”.

36 Subsection 21(5)
Repeal the subsection, substitute

“(5) Without limiting subsection (4A), the CEO must:

(a) manage the Authority in accordance with the policies and directions of the Board; and

(b) advise the Board on any matter concerning the Authority referred to him or her by a member of the Board; and

(c) cause the proceedings of Board meetings to be recorded; and

(d) manage the staff of the Authority; and

(e) generally assist the Board in the performance of its functions; and

(f) carry out other functions conferred on him or her by this Act or delegated to him or her by the Board.”.

37. Subsection 21(7)

Repeal the subsection, substitute

“(7) The CEO must be appointed on terms and conditions determined by the Board, and must be paid at least the same remuneration as a public servant on salary scale P19-21”.

38. Subsection 21(10)

Delete “90”, substitute “60”.

39. Subsection 21(15)

Repeal the subsection.

40 After section 21
Insert

“21A Staff of the Authority

The staff of the Authority are to be appointed by the Public Service Commission in accordance with the Public Service Act No. 11 of 1998."

41. Subsection 23(4)

Repeal the subsection.

42 Part 2 of Schedule 1
Repeal the Part, substitute

“PART 2

Reserved Investments

.”.

43 Application of amendments to existing foreign investors

(1) Subject to subsection (2), the amendments made by this Act apply to a foreign investor if that foreign investor immediately before the commencement of this Act had an approval certificate that was in force.

(2) The amendments made by items 4,5,6,13 and 42 do not apply to a foreign investor if that foreign investor immediately before the commencement of this Act had an approval certificate that was in force and that foreign investor may continue to operate as if those amendments had not been made.

44. References to Act and Board

(1) Unless the context otherwise requires, on or after the commencement of this Act (“the Amending Act”), a reference to the Vanuatu Foreign Investment Act No. 15 of 1998:

• (a) in any written law, other than the Amending Act; or
  
• (b) in any notice, permit, receipt, form or other document;
  

is to be taken to be a reference to the Foreign Investment Promotion Act No. 15 of 1998.

(2) Unless the context otherwise requires, on and after the commencement of this Act, a reference to the Foreign Investment Board:

• (a) in any written law, other than the Amending Act; or
  
• (b) in any notice, permit, receipt, form or other document;
  

is taken to be a reference to the Board for the Vanuatu Investment Promotion Authority.

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