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Samoa is an island country in the Polynesian region of the Pacific Ocean. It is close to the well-developed markets of Australia and New Zealand, providing many business opportunities in Samoa. English and Samoan are the official languages and English is widely spoken in the business environment. The economy here is based on agriculture, tourism and fisheries with a well developed transportation infrastructure (including air and shipping services). Its telecommunications infrastructure is also very developed to support doing business in Samoa.
Starting an offshore company in Samoa can be easy for foreign investors and entrepreneurs. The country has a strong network consisting of international companies, international trusts, international banks, international partnerships, segregated fund international companies, international insurance companies, special purpose international companies and international mutual funds. In addition, if a company has already incorporated abroad in another jurisdiction, it can still do business in Samoa by registering as an overseas company.
Overview of Samoa
The company tax rate in Samoa is 27%. However, offshore companies are charged 27% tax only on taxable income derived from sources in Samoa. This brings a huge tax benefit for international businesses operating outside of Samoa’s border. However, if foreign companies have debt more than three times the equity, they are not allowed to claim deduction for any interest on the excess debts. Businesses in Samoa should pay attention to balancing their accounts.
Interest from bank deposits is subjected to withholding tax of 15% and any profits from selling the asset within 3 years of the purchase date is subjected to capital gains tax of 27%. Businesses in Samoa must also pay the Pay As You Earn tax to the Ministry for Revenue by it from their employees’ salary.
VAGST is 15% for most goods and services. The exceptions are local food, financial services, transport fares, electricity and zero-rated supplies (e.g. exports). Imports are also subjected to VAGST at 15%. Tariffs have four levels: 0%, 5%, 8% and 20%. Special products such as alcohol, soft drinks, tobacco products and certain motor vehicles are under extra custom duties.
Samoa has signed Tax Information Exchange Agreements with Australia, New Zealand and some European countries but there are no double taxation treaties in effect. Tax information of businesses in Samoa can be exchanged based on these agreements.
Businesses in Samoa are regulated by many offices depending on the type of the business. Business owners have to do their homework and comply with these offices’ requirements. Below are some of the common licenses or certifications that a company needs when starting a business in Samoa.
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The application form is the ASG Form ADMIN-41, made available publicly by the Department of Commerce (hereinafter “DoC”). Businesses wishing to set up a company in Samoa have to submit the application at the DoC office. The DoC will examine the application and provide guidance on other regulatory requirements (in both English and Samoan). The application is then sent to the Treasury for collection of the license fee and issuance of the license.
After the payment is made, the original application will be returned to DoC. The DoC then forwards a copy to all relevant offices having regulatory authority over or fiscal interests to the businesses in Samoa. These offices ensure the companies comply with the law under their jurisdiction. Companies then have to obtain all paperworks necessary to get their business license.
The companies will be referred to the Territorial Planning Commission (TPC) after submission to the DoC. A certified financial statement is required for each non-U.S. National or non-U.S. Citizen or non-permanent resident member of the company. A formal business proposal must also be included. The TPC sometimes demands a deposit for insurance against any occurring liability as well as additional information if they deem it necessary.
For doing business in Samoa as a partnership, a notarized copy of the Partnership Agreement is required. For doing business in Samoa as a corporation, a copy of the Articles of Incorporation and proof of stock issuance (unless it is a publicly held corporation) should be attached. The proof could be Stock Certificates, Minutes of the Organizational Meeting, or a certified copy of the Shareholder Registry. Depending on the type of business in Samoa such as medical doctors, lawyers, engineers, tradesmen or accountants, copies of endorsements from authorized parties are also needed.
Afterward the application will be returned to the DOC to proceed as normal.
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