Business Law Reform
We work with Pacific countries to create simplified, modern, and locally tailored business laws.
A dynamic private sector leads to higher employment and incomes, reduced poverty and increased prosperity. But in many Pacific Island countries, confusing and outdated laws make it difficult for businesses to start, trade and grow.
Business laws underpin the way in which economic activity is organized. They determine how businesses are formed, how contracts are structured, and how enterprises expand or are closed down. The ease of business formation and costs of complying with laws and regulations have a major bearing on the degree of informal economic activity in a country. Low-cost, inclusive business laws provide strong incentives for business formalization. Formal businesses, in turn, have greater access to finance, contracts, international trade, and prospects or growth.
Through its business law reform focus area, PSDI aims to modernize the foundational business law frameworks of the 14 Pacific island DMCs, and make the legal system accessible to everyone, by:
- providing legal and regulatory advice to all PSDI focus areas in areas such as policy design, regulatory change, and legal drafting, to help them achieve their desired outcomes;
- streamlining business registration processes by establishing low cost, predictable, and streamlined steps to incorporate and register business entities using business registry technology such as online business registries;
- establishing better business laws through an extensive variety of projects that aim to improve business environments by responding to each countries’ individual needs.
- enabling movable assets financing by establishing the legal frameworks and accompanying online systems that make it easy for lenders to accept movable property as collatera
- introducing simple business structures such as single shareholder/single director companies, which make formality far simpler for small businesses;
- promoting entrepreneurship and foreign direct investment, particularly in Papua New Guinea through an extensive program of support to the PNG Investment Promotion Authority; and
- allowing for community companies, an easy-to-establish corporate form for village and community businesses that provides a superior way to receive profits or revenues from royalties or communal economic activities.
Changes to laws and regulations form an integral part of virtually all reform, as they enshrine change in an accountable, enforceable manner. The business law reform team also provides critical technical advice to other PSDI focus areas on policy design, regulatory change, and legal drafting in order to assist those areas to achieve the desired outcomes.
Business Law Reform and COVID-19
For more information on PSDI's Business Law Reform focus area and COVID-19, click here.
Business Law Reform at a glance
Five online business registries
Business registrations 90% faster
91% increase in company registrations
Simplified business structures
Community companies established,
Transparent foreign investment
The Investment Promotion Authority, Department of Treasury, and PSDI illustrated their continued partnership by signing a Memorandum of Understanding on 2 September 2020 designed to make doing business easier in PNG.
The Investment Promotion Authority, Department of Treasury, and PSDI, with support from the PNG-Australia partnership, signed a memorandum of understanding designed to make doing business easier in Papua New Guinea. (News item courtesy of EMTV).
The Parliament of the Cook Islands passed the PSDI-supported Covid-19 Economic Response Act on 2 July, intended to assist businesses in the Cook Islands that are affected by COVID-19 to continue trading, preserve their economic value, and retain employees.