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Business |
More forex curbs relaxed
Big boost to investment in PNG
THE Bank of Papua New Guinea (BPNG)
recently announced the removal of a number of foreign exchange
controls that became effective last Wednesday
In a statement, Deloitte noted the liberalisation of the foreign
exchange controls covers cross-border investment and lending,
the issuance of securities and guarantees to non-resident and
foreign currency accounts of PNG resident individuals.
Bouke Wagenaar, the director taxations services for Deloitte in
Port Moresby, said foreign investors could now structure their
investment anywhere they feel fit.
“For the PNG business community, the removal of the prior
approval requirements for cross-border financing is the most
significant part of liberalisation.”
In the past, foreign investors were always concerned that the
Central Bank would propose changes in project funding structures
and would cause delays in the approval process, Mr Wagenaar
said.
He said this would make investing in PNG easier and quicker
which was good for the country’s economy.
Cross-border funding is further helped by the removal of the
prior approval requirement for securities and guarantees granted
to non-resident PNG businesses.
Deloitte corporate finance manager Wayne Schulz said this was
significant as it allowed PNG businesses to cut their cost of
debt funding by borrowing through foreign affiliated companies
who may have access to cheaper funds.
The company noted that the liberalisation extended to
cross-border investment in listed and unlisted securities.
Deloitte added this would open up new opportunities for the Port
Moresby stock exchange to attract funds from off- shore
investors.
For resident individuals, the foreign exchange controls on
foreign bank accounts opened prior to Sept 3 2007 will be
lifted.
The statement added that this measure was amongst others that
relevant to expatriates living in PNG who can now hold on their
home country bank accounts without prior central bank approval
that was previously required.
Deloitte said it saw these measures as a positive step in
removing impediments to business and investment in the country.
 
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