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Tonga
We have a team of experienced professionals dedicated to supporting all your business requirements—ensuring smooth operations and full regulatory compliance. This strong foundation enables you to confidently establish and grow your business in Tonga with efficiency and assurance.
WHY TONGA?
Tonga, officially the Kingdom of Tonga, is an island country in Polynesia, part of Oceania. The country has 171 islands, of which 45 are inhabited. Its total surface area is about 750 km2 (290 sq. mi.), scattered over 700,000 km2 (270,000 sq. mi.) in the southern Pacific Ocean. As of 2021, according to Johnson’s Tribune, Tonga has a population of 104,494, 70% of whom reside on the main island, Tongatapu. The country stretches approximately 800 km (500 mi; 430 nmi) north-south. It is surrounded by Fiji and Wallis and Futuna (France) to the northwest,
Samoa to the northeast, New Caledonia (France) and Vanuatu to the west, Niue (the nearest foreign territory) to the east and Kermadec (New Zealand) to the southwest. Tonga is about 1,800 km (1,100 mi; 970 nmi) from New Zealand’s North Island. Tonga is a member of the Commonwealth of Nations, the United Nations, the Pacific Islands Forum, and the Alliance of Small Island States.
Tonga’s economy is characterised by a large nonmonetary sector and a heavy dependence on remittances from the half of the country’s population who live abroad (chiefly in Australia, New Zealand, and the United States).
ADVANTAGES
Investment Incentives:
The government offers tax exemptions, such as corporate income tax holidays for specific, approved investments in key sectors like manufacturing, and duty-free import exemptions for capital goods.
Stable Political Environment:
As a constitutional monarchy, Tonga offers a relatively stable and secure political environment for foreign investment.
Strategic Location and Access:
Tonga is situated on the international dateline, offering good transportation and communication links to Australia, New Zealand, the United States, and other South Pacific nations.
Open Trade and Finance:
Tonga is a member of the WTO, maintaining a relatively liberal trade regime with no capital controls, allowing for the easy repatriation of profits and capital.
Key Growth Sectors:
High-potential areas for investment include tourism (specifically ecotourism), agriculture (squash, vanilla, coconuts), and fisheries.
Business Environment & Infrastructure:
The legal system is based on English common law. Recent improvements include high-speed internet and the “Asycuda World” system for automated online customs clearance.
Labor Force:
A well-educated and English-speaking workforce is available.
TAX REGIME
Corporate Income Tax (CIT)
A 15% VAT-style tax applies to most goods and services, in place since 2005.
Corporate Income Tax:
A standard rate of 25% applies to corporate profits.
Personal Income Tax:
Payroll tax is administered through a Pay As You Earn (PAYE) system.
Excise Taxes:
High taxes are levied on alcohol, tobacco, petroleum products, and specific unhealthy food items (e.g., fats and sweetened drinks) to discourage consumption.
Non-Resident Withholding Tax:
A regime is in place to tax non-residents conducting business, addressing base erosion and profit shifting.
Property Tax:
Annual taxes are levied based on the assessed rental value of property.
IRAQ COMPANIES
Private Limited Liability Company (LLC):
The most common form, offering separate legal personality and limited liability for shareholders.
Public Company:
Entities that may offer shares to the public.
Overseas Companies (Foreign Investors):
International entities registering to operate in Tonga, subject to the Foreign Investment Act 2020.
Sole Proprietorship:
Owned by one individual responsible for all business aspects.
Partnership:
Two or more people sharing earnings and liabilities.
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Contact Us
Get in touch with the right people to get the right help in setting up your business in Tonga.
enquiries@chandrawatpartners.com.