Current business situation
Timor-Leste was ranked as Australia's 111th largest goods trading partner, with total merchandise trade valued at A$29 million. Australian exports to Timor-Leste were valued at A$27 million with major items including:
- passenger motor vehicles
- aircraft, spacecraft and parts
- refined petroleum
- measuring and analysing instruments.
Imports were valued at A$1.3 million and were mostly coffee and transmission shafts and parts. Timor-Leste has had preferential duty free and quota free access to the Australian market.
The economy is largely based on offshore oil and gas exploration in the Timor Sea. The Petroleum Fund was established to manage revenue transparency and sustainability. The fund was valued around US$16 billion. The Timor-Lesteese Government released a Strategic Development Plan seeking to use its oil revenue to support long-term economic development, diversification of the economy and poverty reduction.
The Government Program of the Sixth Constitutional Government, outlines its priorities for the development of infrastructure, social services and initiatives to generate employment and private sector growth over the term in office.
Agriculture, largely at subsistence level, dominates the non-oil economy, accounting for over 30 per cent of Gross Domestic Product (GDP) and around 75 per cent of employment. Coffee accounts for around 90 per cent of non-oil merchandise exports.
Under developed industries, with little onshore mineral exploration and identified as potential resources that would benefit from investment are:
- oil and gas
Business opportunities relate to major infrastructure projects. Other sectors offering opportunities are:
- oil and gas
- building and construction inputs
- tourism infrastructure.
There are opportunities, either directly or indirectly related to aid-funded activities. Public sector opportunities are often funded with donor countries (Australian Aid) and the private sector is predominately in the services sector catering to international staff working in Timor-Leste.
The Asian Development Bank (ADB) is focused on infrastructure activities while the World Bank is focused on both infrastructure and social sector activities.
Major government procurements are handled by the National Procurement Commission and tender opportunities are advertised on the Government’s Procurement Portal website. Most donor-partner tender opportunities are advertised internationally, whilst smaller value contracts might only be advertised in Timor-Leste. Many opportunities require on-the-ground market intelligence to be identified.
Business tipsTetum and Portuguese are the official languages of Timor-Leste, with some English spoken in business circles and Indonesian widely used, especially in rural and regional areas. Knowing the local languages will assist in both a business and social setting.
The handshake is the most common form of greeting in Timor-Leste.
Timorese traditions of clothing are modest. Garments above the knee (for both men and woman) are rarely acceptable in a professional or traditional social occasion. A relaxed dress code applies with collared shirt and pants appropriate for most business meetings. Light-coloured, natural fabrics such as cotton and linen are recommended for protection against mosquitoes. More formal attire is suggested if visiting senior Timor-Lesteese business and political leaders.
Pre-arranged appointments are highly recommended as contacts frequently move around Timor-Leste and to and from Australia, often at short notice. It's a good idea to confirm meetings a day before the scheduled time and be prepared to reschedule at the last minute. It is polite to wait until your host invites you to sit down, or to eat and drink.
Setting up in Timor-Leste
A foreign investment law was passed by the Timor-Lesteese Parliament, which aims to simplify business registration for foreign investors. The government established a Registry and Verification of Enterprises Service (SERVE) for one-stop registration of businesses and an agency to promote foreign investment and assist investors called TradeInvest Timor-Leste.
The International Finance Corporation (IFC) provides advice on the process of starting and running a business in Timor-Leste in its Doing Business report.
The business environment in Timor-Leste presents challenges to foreign investors. There is no collateral law or form of regulated security against which borrowers can apply for credit and currently there are only two insurance providers in the market. Although company, foreign investment and labour laws are in place, property rights may be difficult to enforce through the courts and there is no land law in place. Business-related legislation is published (in Portuguese and Tetum) in the official Journal of the Republic.
Australian companies present in Dili provide a range of services such as:
- financial and hospitality services
- education and training
- building, maintenance and construction.
OECD Guidelines for Multinational Enterprises
Multinational Enterprises should be aware of the OECD Guidelines for Multinational Enterprises that provide voluntary principles and standards for responsible business behaviour in a variety of areas, consistent with applicable domestic laws. These guidelines are endorsed and promoted by the Australian Government, for more information visit AusNCP website.
Banking and Finance
Three commercial banks operate in Timor-Leste and provide personal and business banking:
- ANZ (Australia)
- Bank Mandiri (Indonesia)
- Caixa Geral de Depositos (Portugal).
The ANZ Bank maintains a network of ATMs in Dili and Baucau.
Links and resources
Chamber of Commerce and Industry (CCI-TL).
Government of Timor-Leste.
Please note: This list of websites and resources is not definitive. Inclusion in this list does not imply endorsement by Austrade. The information provided is a guide only. The content is for information and carries no warranty; as such, the addressee must exercise their own discretion in its use. Australia’s anti-bribery laws apply overseas and Austrade will not provide business related services to any party who breaches the law and will report credible evidence of any breach. For further information, please see foreign bribery information and awareness pack.