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 But in many Pacific Island countries, confusing and outdated laws make it difficult for businesses to start, trade and grow.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

PSDI has supported the establishment of online business registries in 5 Pacific island countries, reducing the time, cost, and effort required to register a formal business.

Business registrations 90% faster

Following the implementation of PSDI-supported reforms and registry establishment, the time taken to register a business in Samoa, Solomon Islands, Tonga, and Vanuatu has fallen from 22 days to 1.5 days (on average).

91% increase in company registrations

The number of new companies registered post-reform increased by an average of 91% in Samoa Solomon Islands, Tonga and Vanuatu.

Simplified business structures

created, such as single shareholder companies, that make it easier for individuals, especially women, to establish formal businesses.

Community companies established,

enabling communities to harness their shared resources and capacity to build collective wealth.

Transparent foreign investment

promoted, enabling access to overseas know-how, labor, and capital.
Latest News
11 May 2021
New laws make it easier to start, manage, and grow businesses in Kiribati—PSDI

Kiribati now has a suite of modern foundational business laws after the Companies Act, Company Insolvency Act, and Business Names Act were passed by Parliament last week. The new laws will make it easier for both existing and new businesses to operate in Kiribati.

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5 May 2021
New PSDI-supported laws make it easier to start, operate, and grow businesses in Kiribati

*Kiribati now has a suite of modern, foundational business laws after the Companies Act, Company Insolvency Act, and Business Names Act were passed by the country's Parliament last week. The new laws will make it easier for both existing and new businesses to operate in Kiribati.* PSDI has been working with the Government of Kiribati since 2014 to achieve these reforms. A diagnostic undertaken by PSDI in 2016—early in the process—found...

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13 April 2021
Locally led reforms are making it easier to do business in the Cook Islands

PSDI has supported the development of a new suite of business laws that make it easier to do business and access finance in the Cook Islands.

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19 March 2021
PSDI co-hosts 3rd South Pacific International Arbitration Conference

PSDI together with ADB’s Office of General Counsel, the United Nations Commission on International Trade Law (UNCITRAL), and other development partners co-hosted the 3rd South Pacific International Arbitration Conference at the Sydney Opera House and online on 16 March 2021.

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Key Publications
PSDI Annual Progress Report FY2019–2020
PSDI Annual Progress Report FY2019–2020
This report gives an overview of PSDI activities from July 2019 to June 2020.
PSDI 2007-2019 Activities and Results Overview
PSDI 2007-2019 Activities and Results Overview
PSDI ended its third funding phase on 31 December 2019. This brochure, designed to mark the end of that phase, highlights key activities and results during PSDI's first three phases (2007-2019).
PSDI Country Overviews April 2020
PSDI Country Overviews April 2020
What is PSDI doing in the Pacific? These factsheets provide an overview of all PSDI activities in the Pacific up to April 2020.
PSDI Annual Progress Report 2018–2019
PSDI Annual Progress Report 2018–2019
This report gives an overview of PSDI activities from July 2018 to June 2019.
PSDI Annual Progress Report 2017–2018
PSDI Annual Progress Report 2017–2018
This report gives an overview of PSDI activities from June 2017 to June 2018.
Papua New Guinea Country Overview 2018
Papua New Guinea Country Overview 2018
What is PSDI doing in the Papua New Guinea?