INVESTING
in New Caledonia
BUSINESS CULTURE
Language
French being the official language, an interpreter is strongly recommended when visiting a company for the first time, unless the customer confirms that this is not necessary. They should be addressed by Monsieur 'surname' or Madame 'surname'.
Formalities
Personal relationships are more formal than in surrounding english speaking countries and first names are generally not used until you have established a good relationship.
Planning ahead
It is preferable to make appointments prior to visiting customers. Many businesses are small and the point of contact is likely to be the owner or managing director. Due to the size of the market, 'exclusivity' is likely to be requested, discretion is recommended. Moreover importers tend to be loyal towards reliable suppliers who are prepared to meet smaller market requirements.
Dress code
Smart casual is the norm, with tailored trousers and open necked shirt suitable for most business meetings. Suits and ties are rarely worn to business meetings or functions.
Source: www.austrade.gov.au/Australian/Export/New-Caledonia/Doing-business
RULES AND REGULATIONS
Corporate Taxation
Recent developments:
In August 2014 a consensus was found to implement a significant tax reform according to an agreed agenda; the first laws voted late December 2014 are applicable as of 1st January, 2015. They modify substantially the withholding taxes on dividends.
According to the consensus, the introduction of a VAT, named TGA 'Taxe Générale sur les Activités' should take place on January 1st, 2016. The law introducing the TGA would include the replacement of the present Tax on Services (TSS) and some other taxes levied on imported goods.
Personal Taxation
Recent developments:
A tax incentive (reduction over 6 years) has been introduced in December 2013 for investments in intermediate housing for rental. The tax reduction is 30% of the investment. Maximum price and effective rent conditions apply.
In August 2014 a consensus was found to implement a significant tax reform according to an agreed agenda; the first laws voted late December 2014 are applicable as of 1st January, 2015. The key change expected in the area of personal taxation is the taxation of capital gains.
Please check the PWC website for more information.
www.pwc.com/nc/en/doing-business-in-new-caledonia/corporate-taxation-guide.html
ADVANTAGES OF INVESTING IN NC
A favourable geostrategic positioning. It is located in the centre of the Pacific and in the heart of Melanesia.
The level of development is the highest of the Pacific islands region and on a similar par to Australia and New Zealand.
It offers a route into the European Union for international investors.
Highly skilled and educated population.
Favourable investment measures such as a tax exemption law, tax credits, equipment aid and feasibility study aid.
Stability in legal matters, health, currency and security.
A high-performance industrial tool aligned with European standards.
A dynamic, prosperous and open market.
A pro-business government developing new policies to lower corporate tax, diversify the economy and bring new investments and investors to the territory. They have put in place an economic recovery law looking to simplify the economic structure of the island.
High standard of living and an exceptional quality of life thanks to the richness of its landscapes and environment, cultural mix, art of living, sporting practices, nautical activities, quality food, beaches and a mild and clement climate.
Source: www.cooperation-regionale.gouv.nc.pdf
NEW ADVANTAGES COMING SOON
Free Trade Zones with tax incentives to attract foreign companies.
New Trade Agreements with Australia, New Zealand and Fiji.
An investor office will be developed within the economic affairs department, in collaboration with the Chamber of Commerce.
OPPORTUNITIES
A greater regional integration, New Caledonia has a lot to offer to neighbourhood countries such as Vanuatu, Fidji and Papua New Guinea in terms of skills and training. New Caledonia belongs to several regional and international organization’s such as the Pacific Islands Forum (PIF).
Diversifying its economic portfolio (see below).
Increase in Australian, New Zealand and Japanese tourists.
CHALLENGES
Institutional uncertainty with the referendum’s of 2020 and 2022 on independence.
A high cost of living partly owing to heavy market protection and because of imports.
Economic dependence on a single resource, nickel, it represent 90% of its exports.
Lack of regional integration mainly due to French being the native tongue.
A lack of fluent English speakers.
A population of 270.000 people.
A low number of visitors per year.
Visitors with a European Union, Australian and New Zealand passport, do not require a visa for a stay of less than three months. For visitors of other nationalities, entry conditions to the territory are regulated.
SECTORS WITH FUTURE POTENTIAL
Biodiversity: science and research projects will be supported via fiscal or tax exemption systems. Building an external research centre is an option the current government is looking into. The Pacific Community has its headquarters in New Caledonia.
The Digital Space: digital development will be accelerated in the coming years through free trade zones.
Economy of the Sea: a real maritime strategy is being pushed by the government given the opportunities of this sector for the territory. For instance, New Caledonia is looking for a smaller, high value-added cruise industry.
The nickel industry: Caledonian nickel could have a comparative advantage on the market through its sustainable development and green objectives.
Renewable Energies: especially to help the metallurgical sector in its energy transition:
The largest solar farm with storage in France is in New Caledonia, it has 58,000 solar panels, a total capacity of 30 megawatts and it will feed 40.000 Caledonians in electricity
100% of the public distribution of electricity will be coming from renewable energies in 2023
The first agri-solar roof farm in New Caledonia was recently inaugurated
Tourism: Caledonia is an untouched territory with a truly unique biodiversity. It has an extraordinary diversity of landscape going from the extraordinary blue of the coral atolls, to the humid forest, to the black sandy beaches of the east coast.
