KASELEHLIE Welcome and please interrupt to ask your

KASELEHLIE! Welcome, and please interrupt to ask your question.

HISTORY The original administration in Saipan during TT In 1979 Pohnpei enacted the first FIB Law In 1986 State Law S. L. No. 1 L-85 -86 (The Pohnpei foreign Investor’s Permit Act of 1986) was created, repealing the entire ‘ 79 Law 1999 the 1986 Law amended 2006 the 1988 Law amended (again)

ORGANIZATIONAL STRUCTURE EXECUTIVE BOARD 5 MEMBERS ARE APPONITED BY GOVERNOR AND APPROVED BY THE LEGISLATURE EXECUTIVE DIRECTOR EX-OFFICIO MEMBER/ECONOMIC ADVISOR LEGAL ADVISOR OTHER SUPPORT STAFFS

ORGANIATIONAL & FUNCTIONAL CHART GOVERNOR POHNPEI STATE Foreign Investment Board Legal Counsel Executive Director Economic Advisor Administrator Clerk

STATEMENT OF MISSION TO PROVIDE A SOUND FOREIGN INVESTMENT PROGRAM TO FACILITATE THE ECONOMIC DEVELOPMENT AND GROWTH IN THE STATE OF POHNPEI, IN ACCORDANCE WITH THE FIB LAW AND THE REGULATIONS.

GENERAL STRATEGIES FACILITATE FOREIGN INVESTMENT ENTRY PERFORM INVESTMENT IMPACT ASSESSMENT PROVIDE LEGAL ENFORCEMENT AND CONFORMANCE

PRINCIPAL ACTIVITIES REVIEW AND PROCESS THE INVESTMENT APPLICATION CONDUCT INVESTMENT SURVEY PERFORM BUSINESS/PERMIT INSPECTION PROSECUTE FOREIGN INVESTMENT VIOLATIONS

A POLICY ATTIUDE Realizing what the foreign investment has done, and can continue to do for our welfare, the FIB is supportive of foreign investment and encourages investment where we have been unable in the market. This does not mean to blindly approve all applications submitted rather to ensure a fair evaluation to reconcile potential differences. Aware how critical orderly environment is to business investment, the FIB is also serious about those who knowingly ignore our norms.

PERMIT PROCEDURES ACTIVITY IMPORTANT REQUIREMENTS A. APPLICTION FILED Processing fee $250 B. PUBLIC HEARING 7 -day advance notice, and meeting open to the public C. EXECUTIVE MEETING l Board grants its approval l Board denies the application D. APPEAL PROCESS l If the Board fails to act in reasonable time after 45 days have expired l If applicant seeks judicial review to appeal the final FIB decision l Permit approved l Permit denied l Applicant may submit “show cause” demand for the Board to answer in 5 days l If the Court agrees with the FIB, then the decision stands. But if Court disagrees, then a supplemental application will be reviewed in the manner of the original application, and another $250 refundable processing fee.

PERMIT EXEMPTIONS PROVISION OF GOODS AND SERVICES TO ANY LOCAL GOVERNMENT CHARITABLE, RELIGIOUS AND HUMANITARIAN OPERATIONS BUSINESS CONDUCTS LESS THAN 90 DAYS IN ANY GIVEN 24 MONTH PERIOD PROFESSIONALS TO STAY LESS THAN 30 DAYS IN A GIVEN 12 -MONTH PERIOD THOSE GRANDFATHERED FROM THE TT AND THE ’ 79 REGIME SALE OF SHARES OR HOLDINGS IN BUSINESS NON-CITIZEN EMPLOYEES ON FIXED WAGE/SALARY WITH NO VOTE OD DECISION IN BUSINESS UNDER THE OMNIBUS DEVELOPMENT STATUTE THOSE BUSINESSES THAT ARE NATIONAL REGULATION

REVIEW CRITERIA ECONOMIC NEED FOR THE SERVICE NET INCREASE IN EXPORT/NET DECREASE IN IMPORT POTENTIAL DEPLETION OF NONRENEWABLE RESOURCES AND ENVIRONMENTAL DEGRATATION LOCAL EMPLOYMENT & OWNERSHIP PARTICIPATION MINIMUM CAPITAL REQUIREMENTS TECHNOLOGICAL TRANSFER

INVESTMENT RESTRICTIONS 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. Any business below $50, 000 capital; apartments, $500, 000 Wholesale and retail, except oil, petroleum, lubrication and gasoline products Hotels below 12 rooms All forms of land transport including buses, taxis, rental car Handicraft and gift shops, except in hotels and duty frees at the PNI Internal Airport Beauty shops, except in hotels of over 12 rooms Barber shops, except in hotels of over 12 rooms Bakeries Bar services not associated with and contained within a restaurant or hotel Tour guides Fishing guides Diving guides Any other form of water transportation service Travel and tour agencies Land water equipment rentals, including rentals related to tourism Commercial fishing for other than highly migratory species

TABLE 1. INVESTMENT REVIEW YEAR APPLICATIONS PERMITS DENIED W/DRAWN % APPROVED 2003 26 24 1 1 92% 2004 24 20 3 1 83% 2005 25 16 9 0 64% 2006 13 8 5 0 62% 2007 12 8 3 1 66% 2008 10* SO FAR -- ---

TABLE 3. POTENTIAL IMPACTS YEAR TOTAL FIRMS SURVEYED LOCAL EMLOYMENT FOREIGN EMPLOYMENT TAXES Number Earning 2003 84 414 $1. 6 M 155 $1. 6 M $3. 6 M 2004 79 413 1. 5 M 121 0. 9 M 3. 3 M 2005 78 416 1. 5 M 119 0. 9 M 3. 9 M 2006 81 422 2008 -- -- 124 1. 2 M 3. 5 M -- 2007 74 so far 1. 6 M -- --

TABLE 2. PERMIT INSPECTION YEAR 2004 FIRMS INSPECTED 47 2005 36 2006 31 2007 34 2008 17 SO FAR

ISSUES & CHALLENGES 1. 2. 3. 4. 5. The regular obligations elsewhere tend to interrupt the FIB process A downward trend has been observed in the investment arrival The accomplished survey questionnaires are often late and also doubtful whether the data can be credible Data keeping and maintenance is also a problem. Information are scattered all over the place and thus prevent speedy and accurate reporting There seems to be increasing violation in the market. Businesses deviate from the permit or do not have the FIB permit at all.

END OF SHOW KALAHNGAN FOR THE OPPORTUNITY, AND PLEASE KEEP THE QUESTION TO YOURSELF.