Business entities in Papua New Guinea
Wholly foreign owned entities
100% foreign ownership is permitted for the various Papua New Guinea company entities. Neither a resident director nor a company secretary is required for establishing a company.
Limited liability company
This is the most common entity used for doing business in Papua New Guinea. It is also known as a private limited. As always, the company is a separate legal entity or ‘person’. In particular, a company is separate from its owners, shareholders and the persons who run it, the directors. All PNG LLCs must have one director and one shareholder. There are no minimum share capital requirements. PNG companies that are 50 percent or more owned by foreign investors require certification from the Investment Promotion Authority. Additionally, some activities are reserved for PNG nationals.
The establishment of a PNG branch may be preferable to incorporating a subsidiary if one of the objectives is to consolidate the financial results of the parent company.
A PNG Representative Office can also be 100% foreign-owned and controlled, but is not permitted to make direct sales in PNG. Where a foreign company does not intend to carry on business in PNG it may seek to establish a representative office. Such an office must however only engage in activities which will not amount to carrying on business, for example market research.