Investors in Fiji now have a chance to easily access readily available through the Land Bank as compared to past years.
The Land Bank was set up after the Fijian Government passed the Land Use Decree 2010 and addresses the issue of the shortage of available land for lease and the long processes investors have had to follow with the state owned iTaukei Land Trust Board or ITLTB.
In the past, investors had to apply to the iTLTB and wait for feedback which would have taken months or even years before any decision is made. However under the Land Use Decree 2010, any land which has been put into the Land Bank will be free from all encumbrances and shall not be the subject to any dispute in any court, tribunal, commission or before any other person or body exercising a judicial function.
The establishment of the Bank is part of Government’s Land Reform Initiative and also addressed the concern that there was a lot of idle land which could be used to generate income for the landowners.
Types of land
Fiji has over 18, 000 km2 of land which also includes the 300 islands. The two largest islands - iti Levu and Vanua Levu make up approximately 88% of this land area with 16% of the land suitable for agriculture.
Fiji has three types of land in the country - Native, Freehold and Crown land.Freehold land can be bought and sold, native land and crown land cannot be bought and sold but is available on a lease basis.
Native land makes up around 83% of land in Fiji and belongs to village groups and land owning units. In Fiji, Native land is usually divided and a portion is set aside for the village while the rest is set aside for native reserve. This Reserve can be used for leasing. Leases can be obtained through the iTLTB which is a statutory Government Body set up to administer land on behalf of landowners. If dealings are done without following the proper channel or involving iTLTB, then it is rendered illegal. However, once a iTLTB lease has been issued, de-reservation takes place followed by the proposed development.
Ten percent (10%) of of land in Fiji is Free Hold Land. Freehold land can be purchased, transferred or leased and is governed by the Land Sales Act. In 2014, Fiji’s Land Sales Act was amended with new provisions for non-resident Freehold owners.
Under the amended Act, the term resident refers to
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an individual who is a Fiji citizen
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a company with a controlling interest that is held by a Fiji citizen or Fiji citizens and
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the trustee of a trust estate who is a Fiji citizen and whose beneficial interest is over 15 % in the trust estate income.
Foreigners (non-residents) who obtain vacant State of Freehold land must building a residential dwelling at a minimum cost of FJD $250,000, within two years from the date of the sale, transfer or lease of the vacant land.
It’s important to note that penalties for non-compliance include a fine up to $100,000 and a fixed penalty of 10 % of the price of the State or Freehold land. Residential State and Freehold land located within municipal boundaries (towns or cities) cannot be sold, transferred or leased by foreigners.
Foreigners can however own Freehold property within municipal boundaries if that property is a strata title or a residential dwelling within integrated tourism developments, such as Denarau Island, Naisoso Island in Nadi. Foreigners can also acquire hotel operations that are licensed under the Hotel and Guest Houses Act.
Likewise, the sale, transfer or lease of State or Freehold to foreigners is allowed for industrial or commercial purposes. Foreigners can lease State and Freehold land for tenancy not exceeding 5 years. Such land can also be sold, transferred or leased to foreigners, immediate family members and given, devised or bequeathed to foreigners, as per the Succession, Probate and Administration Act
Around 7% of land in Fiji is Crown land and this covers all foreshores as well as all land under Fiji waters. Crown land can not be sold but only leased and this is managed by the Department of Lands.
Process
iTaukei landowners who have land lying idle or undeveloped will approach Government or the Land Use Department advising them of their intention to deposit the said property in the Land Bank. Potential investors and farmers can then sub-lease or lease the properties they desire fr a period of up to 99 years from the Land bank itself.
The Land Use unit will only step in once consent has been obtained from over 60% of the land owning unit or mataqali (in the iTaukei language). After the approval has been given, the Prime Minister will then authorise the deposit of the land in the Land Bank.
Once this has been done, the Land Use Department will send in surveyors and a team to determine the cost of the property before it will be marketed.
A flow on effect of this process is that roads will now open up to the area which has been earmarked and as such, new roads will open up new land and create more farming activities, employment and easier access to services and main business centres.
Investing in Fiji
Foreigners wishing to invest in Fiji will have to comply with the Foreign Investment Act 1999 and its corresponding Amendment Act of 2004.
One main requirement is for foreign investors to understand that in Fiji there are certain activities which are reserved for locals. They are:
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Cafeteria or Milk bar
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Taxi business
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Kava business
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Selling from stalls and markes
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Handicraft
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Tailor Shop
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Repair of Personal and Household Goods;
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Plumbing Business;
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An Electrical Business;
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Plant Nursery
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Day-care Centre;
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Internet Café and Amusement and Gaming Centers;
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Home-stay Lodging Services;
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Bakery Business, other than those operated within the vicinity of a hotel/resort and/or operated by foreign owned hotels/resorts;
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Backpacker Operations;
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A Nightclub, other than those operated within the vicinity of a hotel/resort and/or operated by foreign owned hotels/resorts; and
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A Liquor Bar, other than those operated within the vicinity of a hotel/resort and/or operated by foreign owned hotels/resorts.
There are also activities which are restricted or have certain conditions which need to be met and they are:
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Fishing - the company would have to have at least 30 % equity held by a Fiji citizen and the foreign investor must have at least $500,000 in owner’s contribution or paid-up capital for companies in the form of cash from the operational date.
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Forestry - the foreign investor would have to have at least $500,000 in owner’s contribution or paid up capital for companies in the form of cash from the operational date, to
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Manufacturing( more specifically Tobacco production) - The investor must use at least 75% locally grown and processed tobacco and must have at least $500,000 in owner’s contribution or paid-up capital for companies in the form of cash from the operational date.
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Tourism - this is specifically targeted at those that would like to use our culture to market or the term Cultural Heritage. Any such activity must have at least $500,000 in owner’s contribution or paid-up capital for companies in the form of cash from the operational date.
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Specific services such as:
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Real Estate Management - Any person or foreigner wishing to engage in real estate management and real estate agents must have at least $1m in owner’s contribution or paid up capital for companies in the form of cash from the operational date. A foreign investor engaging in the above real estate management activities needs to be certified under the Real Estate Agents Act.
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A foreign investor engaging in real estate activity in renting out of homes/villas/apartment/bures to tourists only must have at least $250,000 in owner’s contribution or paid up capital for companies in the form of cash from the operational date.
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A foreign investor engaging in real estate development must have at least $5m in owner’s contribution or paid up capital for companies in the form of cash from the operational date.
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Construction - A foreign investor engaging in the construction industry must have at least $1m in owner’s contribution or paid up capital for companies in the form of cash from the operational date.
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Opening an earthmoving Business - A foreign investor engaging in earthmoving business must have at least $1m in owner’s contribution or paid up capital for companies in the form of cash from the operational date,
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Inter-island Shipping and Passenger Service. This is specifically for those looking at opening such business to assist in tourism support and not the regular inter island ferry services. (Exclusive of Tourism Support Services) A foreign investor must have at least $500,000 in owner’s contribution or paid up capital for companies in the form of cash from the operational date.
Important offices to know
Before opening up business in Fiji, a foreign investor will have to apply for approval from certain Government statutory bodies and Departments.
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Reserve Bank of Fiji for the Registrar of Companies
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Investment Fiji for Foreign Investor Registration or FIRC
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Department of Immigration for work permits
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Fiji Revenue and Customs Services for Tax and Vat registration
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Reserve Bank of Fiji for issue of capital
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Fiji National Provident Fund or FNPF if you are looking at employing workers
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The local town or city councils for business licenses.
- Real Estate Agents Licensing Board (REALB) if you are looking at real estate.