Investment Law

Papua New Guinea’s legal architecture for foreign investment is defined primarily by the Investment Promotion Act and supported by sector-specific legislation, land tenure frameworks, and dispute resolution mechanisms. InvestPNG provides structured analysis of this legal environment to support investor due diligence and capital deployment planning.

Investment Promotion Act

The Investment Promotion Act establishes the legal framework governing foreign investment in Papua New Guinea. The Act is administered by the Investment Promotion Authority (IPA), which processes business certifications for foreign enterprises. The Act defines reserved activities restricted to PNG citizens, certification requirements for foreign investors, and the regulatory obligations applicable to certified foreign enterprises.

Foreign investors are required to obtain IPA certification before commencing business operations in PNG. The certification process involves assessment of the proposed investment against national interest criteria, employment generation potential, and compliance with sector-specific regulations.

Foreign Ownership Provisions

The Investment Promotion Act maintains a Reserved Activities List that restricts certain business activities to Papua New Guinean citizens. Activities not on the reserved list are open to foreign participation, subject to IPA certification. The reserved list is periodically reviewed and has generally trended toward liberalisation in recent policy cycles.

In resource sectors — mining, petroleum, and gas — foreign ownership is governed by sector-specific legislation that permits majority foreign ownership within the terms of the applicable mining or petroleum licence. State equity participation provisions apply in certain resource agreements.

Land Tenure and Customary Considerations

Approximately 97 per cent of land in Papua New Guinea is held under customary ownership. Foreign investors cannot own customary land but may access land through state leases, special agricultural and business leases, and negotiated access agreements with customary landowners. Land tenure considerations are central to project feasibility assessment in PNG and require careful legal structuring.

InvestPNG advises investors to engage qualified PNG legal counsel for all land access arrangements and to ensure compliance with the Land Act and associated regulations.

Dispute Resolution and Arbitration

Papua New Guinea’s legal system recognises international arbitration as a mechanism for resolving investment disputes. PNG is a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Bilateral investment treaties provide additional access to investor-state arbitration, including through the International Centre for Settlement of Investment Disputes (ICSID).

Domestic dispute resolution is administered through the PNG National Court and Supreme Court system. Alternative dispute resolution mechanisms, including mediation, are increasingly used in commercial matters.

Enforcement and Compliance

Foreign investors operating in PNG are subject to ongoing compliance obligations including IPA reporting, tax obligations administered by the Internal Revenue Commission, and sector-specific regulatory requirements. Non-compliance with certification conditions may result in revocation of business certification.

InvestPNG maintains current analysis of PNG’s legal framework alongside the tax framework, international agreements, and sector regulations to provide investors with an integrated legal environment assessment. For specific legal enquiries, contact InvestPNG through the engagement portal.