Business opportunities
Austrade's business development specialists have prepared a select range of market profiles with potential business opportunities and to assist in your exporting investigations. Please see the list of industries at the end of this profile that you may be interested in.
In conjunction with the market profiles, the Opportunities Online website may be a useful addition to your information sources. The database established by Austrade aims to deliver international sales leads ('export opportunities'), including tenders, generated by our overseas network to Australian businesses.
Registering is simple and once this is done you will have the option of accessing a weekly newsletter featuring the most recent opportunities uploaded onto the system in industry sectors of interest to you. Another feature is the ability to view, and also print, the complete page of opportunity details.
For general inquiries concerning Austrade’s services, please contact Austrade Direct on 13 28 78.
Business etiquette
Business hours in Papua New Guinea (PNG):
- Commercial enterprises are open between 8.00am-4.30pm, Monday to Friday, and 8.00am-12 noon, Saturday.
- Government offices are open between 7.45am-4.05pm, Monday to Friday.
- Shops are generally open normal business hours with Saturday being a half day. Some supermarkets are open on Sunday but as a rule most shops are closed. However, service stations are usually open normal business hours, seven days a week.
- A common term used in the Pacific areas is ‘Melanesian time’. This means that meetings may not necessarily start on time and many guests may also arrive late. For some invitations, you may find guests turn up with one or more friends unannounced. A general rule of thumb is to invite two-three more than you wish to attend to get the number that is required.
Business practices:
- 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 regulations
Import restrictions
Import licences are not 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
- 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.
Tariff
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) and will be progressively reduced over a three-year period. At present:
- Basic import duty is 10 per cent
- Protective rate is 30-40 per cent
- Luxury rate is 55-80 per cent
- Imports competing with similar goods produced in Papua/New Guinea are generally subject to rates ranging from 30 per cent to 80 per cent.
- Specific duties, expressed in Kina per measure, are levied on beer, matches, and poultry meat, eggs and tobacco products.
- A wide range of items are exempt of duty.
Customs authority contact details:
Papua New Guinea Internal Revenue Commission
Bureau of Customs
PO Box 923, Port Moresby
Tel: +675 321 2844
Fax: +675 321 3004
Quarantine authority contact details:
National Agriculture Quarantine & Inspection Authority
PO Box 417, Konedobu
Tel: +675 321 3778
Fax: +675 325 9310
Packing, marking and labelling
Packing should guard against extreme heat and humidity and possible handling difficulties.
Packages exceeding one metric tonne must have their weight marked on the outside in tonnes and kilograms.
Goods including plants must be encased in clean, new cartons or packing cases. Goods may be packed in wood-wool, paper or synthetic packing materials. Plants may be packed in sphagnum moss or vermiculite.
Packing materials of rice hulls, chaff, hay, straw, soil compost and forest-litter are prohibited except under stringent conditions.
Packing cases are inspected for woodborers or other damaging insects.
Poisonous products must comply with specific labelling regulations.
Food, including additives and preservatives, is subject to extensive and detailed regulations covering packaging, labelling and standards.
Prepackaged goods must be marked with the weight of their contents.
Eggs must have their country of origin stamped on them, or entry will be refused.
Brand or trade names must be registered with the Papua New Guinea Department of Trade and Industry.
Weights and measures
The metric system.
Insurance
Normal commercial practice.
Methods of quoting and payment
Quotes should be in Australian dollars or Kina on C&F or FOB basis (Incoterms 1990) at the relevant port of discharge. CIF based quotations (Incoterms 1990) are the preference of the government and smaller companies.
Payment convention is by sight draft or letter of credit, with sight draft preferred due to the lower costs involved. Payment in full in advance is frequently sought bank or fiscal records are imperfect or not available.
Public health requirements
Food, medical products, poisons and other dangerous substances are subject to specific regulations. Importation of certain items listed as dangerous is prohibited unless authorised by the Comptroller of Customs.
A seven-year tax reform program will substantially reduce the tariff level from an average nominal rate of 21.9 per cent (1997), down to 6.3 per cent by 2002.
Some import duties and subsidies remain at a reduced level to protect local industries (eg. furniture, sugar, dairy, meat, poultry) and some luxury items are now subject to excise duties (eg. cigarettes, alcohol, leisure boats). Overall the reforms have had little impact on the consumer. Before exporting you to need ascertain the duty rate that applies to your product.
Documentation
Particular attention should be given to facilitating fast delivery of documents necessary for clearing goods through customs in view of the short shipping time between Australia and Papua New Guinea. Although inclusion of the HS classification on shipping documents is not mandatory, provision of these details may facilitate clearance.
Commercial invoice
No prescribed form. Importer will specify number of copies required. The invoice must indicate the following details:
- Name of firm and address of both buyer and seller.
- Place and date of issue.
- Method of shipment.
- Number, kind and markings of packages and their numerical order.
- Exact description of goods - customary commercial description according to kind, quality, grade etc, with special emphasis on factors increasing or decreasing their value.
- Quantity of goods, expressed in units customary in international trade.
- Price agreed upon for the merchandise (unit cost, total cost, including shipping and insurance charges, as well as other expenses charged to the cost of the goods).
- Delivery and payment terms.
- Signature of seller on each copy of the invoice.
Bill of lading
Original bill of lading is required to effect clearance together with declaration of contents and value. In the Australia/PNG Container Shipping Service 'Received for Shipment' (RFS) bills are issued (except when 'Shipped on Board' bills are specifically required) sets of 'RFS'bills should be lodged immediately the Interim Shipping Receipt is obtained.
Packing list
Packing lists are commonly used to facilitate customs clearance.
Special certificates
Animals, animal products, plants and plant products including cut flowers, fresh fruit and vegetables must be accompanied by a phytosanitary certificate issued by the appropriate authority in the country of origin (see 'Public health requirements' above).
Used clothing must be fumigated before entry into Papua New Guinea.
Untreated raw skins, hides and wool must be accompanied by a statutory declaration endorsing fumigation treatment.
Air and ocean shipment
Transit time can vary significantly from a few days to weeks.
Use of the appropriate PO Box number is essential. Use of air courier services should be considered as a means of speedier delivery.
Delays of up to four days over direct transit times can occur if documents are forwarded through banks if this method is used a non-negotiable set should be sent direct to the consignee.
Rapid delivery of shipping documents is essential as wharf storage dues are levied four days after the discharge of cargo irrespective of whether goods have been entered or not this is strictly enforced.
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.
Company tax rates are:
- Resident companies (not engaged in mining or petroleum operations) – 25 per cent
- Non-resident companies (including those engaged in mining operations) – 48 per cent
- Resident mining companies – 35 per cent
- Petroleum companies, resident and non-resident – 50 per cent
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.
The term withholding tax applies only to tax on dividends and certain management fees.
Separate taxes apply to extractive resource operations in the mining and oil sectors. Further details can be obtained from the PNG Chamber of Mines and Petroleum.
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.
Business travel
Travel around Papua New Guinea (PNG) is limited mostly to air transport. Port Moresby is not connected to the rest of the country by road, and highways in other parts of the country are in very poor condition. The Highlands Highway links the coastal city-port of Lae with Goroka, Mt Hagen, Mendi and Porgera, and provides a vital goods artery. Although open and well-used most of the time, it is advisable to fly to the Highlands due to the substantial travelling time incurred if travelling by road.
Qantas and Air Niugini have regular flights to Port Moresby from Sydney, Brisbane and Cairns. Departure tax is K30.00 and must be paid after check in and prior to immigration clearance. Check-in time for international flights is two hours prior to departure. You should consult each airline directly for information on their schedules and terminal locations.
Although stipulated check-in time for domestic flights is one hour prior to departure, due to chronic overbooking and long queues, it is advisable to check luggage in and obtain boarding passes as early as possible. A confirmed booking is no guarantee of a seat.
International Airport (Jacksons) is located to the north of the main city area, about 11 kilometres from the centre of Port Moresby. From the city centre the journey usually takes 20 minutes to reach the airport, and about 12 minutes from Waigani where the Australian High Commission and Austrade are located.
The major hotels supply free courtesy bus transfers to and from the Port Moresby airport. The local hotel can make arrangements for transfers at other regional airports in Papua New Guinea. It is advisable to confirm your transfer requirements with the hotel when booking.
While taxis are available, they can be unreliable, expensive and unsafe and are not recommended. If you do have to use a taxi, make sure the fare is negotiated before entering the vehicle.
Avoid using public buses commonly referred to as PMVs (public motor vehicles).
Recommended methods of transport are a car and driver or a self drive rent-a-car.
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