(Last updated: 8 May 2011)

Business etiquette

Business tips

Always have plenty of business cards, and treat other peoples’ cards with respect when they are handed to you.

Reference will often be made to ‘wantoks’ or the ‘wantok system’. ‘Wantok’ literally means ‘one talk’ or the ‘same language’. However, it also has the wider meaning of the ‘same family’, the ‘same clan’. It is like the Australian term of ‘mate’ but has a much deeper meaning. For example, a ‘wantok’ has an obligatory responsibility to assist another ‘wantok’, even to his own detriment or loss. This obligation can have detrimental effects when it is incorporated into a capitalistic or ‘Western’ way of life, or method of doing business.

Continuity of contact is important when doing business in PNG. Business people like to see the same face representing a company on successive visits. The guarantee of after sales service or maintenance is also considered important, and should be an integral part of your strategy.

Business laws are based on English legal principles, but their application is less rigorous than in Australia. Progress all your business undertakings with the utmost business prudence. Providing credit, supplying product or undertaking work, without arranging appropriate insurance for non-payment of contract, is a risky strategy.

General business practices in some sectors (such as wholesale trading, used clothing, cottage industries, small shops) may reflect more Asian values (such as cash transactions, personal relationships, longer negotiations, formal recognition of business arrangement). Transactions involving large companies tend to exhibit more Western business values.

Gifts are not common in general business dealings.

Forms of address in business circles are the same as in Australia.

Men’s business wear comprises long, lightweight trousers and open necked shirt. This is known as ‘tropical informal’. ‘Tropical formal’ for men consists of long sleeved shirt and tie with trousers. State affairs or more formal occasions may warrant a jacket.

Women’s business wear is conservative but lightweight, just like any other warm-climate city. In accordance with local custom, dress for women is more conservative than in Australia.

Please also note: Bribery of foreign public officials is a crime. Australian individuals and companies can be prosecuted in Australia for bribing foreign officials when overseas. For more information, go to the Attorney General's Department on foreign bribery.

Tariffs and non-tariff barriers

PNG operates on a single column tariff, based on the Harmonized System. Most duties are ad valorem assessed on the WTO valuation code based on the CIF value (Incoterms 1990).

Tariffs have in general been reducing under the PNG Government’s tariff reduction program. However a moratorium on any further reduction was announced in the 2009 PNG Budget. Exporters should consult the PNG Internal Revenue Commission for advice.

Customs authority contact details:

Papua New Guinea Internal Revenue Commission
Bureau of Customs
PO Box 777, Port Moresby
Tel: +675 322 6600
Fax: +675 321 4249

Quarantine authority contact details:

National Agriculture Quarantine & Inspection Authority
PO Box 741, Port Moresby
Tel: +675 311 2100
Fax: +675 325 1673

Non-tariff barriers

Import licences are not generally required although permits are needed for a small range of permitted plants, seeds, animal products and livestock, and weapons and paramilitary equipment.

Prohibited goods include:

• uncooked poultry products (meat and eggs)
• pornography
• recreational drugs
• some weapons

Restricted goods include: cooked and processed poultry products and weapons and firearms - a police permit is required.

Exchange controls are set and enforced by the Bank of Papua New Guinea and the Department of Finance and Planning.

Setting up in Papua New Guinea

Finding the right partner

The right partner is a crucial element of success in any market and PNG is no exception. Whether it is an agent, distributor, wholesaler or retailer exporters should do their own due diligence on potential options including a visit to market to further qualify potential partners.

PNG’s Chambers of Commerce are also valuable sources of local business information.

A range of Australian lawyers and accountants operate in country and Austrade can assist with contacts.

In market representation

Should exporters decide to establish an in-market presence in PNG, it is recommended they engage a professional service provider.

Austrade can provide a list of Australian lawyers and accountants.

For business and investment regulations contact PNG’s Investment Promotion Authority.

Taxation

The world-wide income of resident companies (whether citizen, national or foreign) and the Papua New Guinea (PNG) sourced income of non-residents is taxed. Resident companies are companies either incorporated or conduct business in PNG, and whose management and control is in PNG.

General corporate tax rates are:

• Resident companies – 30 per cent
• Non-resident companies – 48 per cent

Personal income tax is applied on a sliding scale:

• Up to K7,000 – 0%
• Up to K18,000 – 22%
• Up to K33,000 – 30%
• Up to K70,000 – 35%
• Up to K250,000 – 40%
• Greater than K250,000 – 42%

All taxpayers must lodge their tax returns based on a calendar year end unless they have approval from the Taxation Office to adopt a substituted balance date.

There is a 10 per cent Value Added Tax (VAT) applicable to most goods imported into PNG. There will also be a 10 per cent VAT charged on any customs or excise duty paid on importation. VAT is collected as part of the normal procedure at the point of entry.

Further information on tax rates and personal income tax scales is available from the Internal Revenue Commission.

Banking and finance

A wide range of banking and finance facilities are available in PNG.

The banking sector is serviced by three major banks, Westpac, ANZ and Bank of South Pacific offering personal and commercial banking facilities.

EFTPOS and ATM services are in common use in major regional centres.

The finance sector is serviced by a number of providers offering general finance services and include, Kina Securities, Credit Corporation and Finance Corporation Limited.

The Bank of PNG is PNG’s central bank and regulator. Further information on monetary policy and on financial sector supervision and payments system can be found at www.bankpng.gov.pg.