How to Start a Small Business in PNG: A Complete Guide 

• Papa New Guinea (PNG) has become a land full of potential and entrepreneurial opportunity. With an increasing population, rise in urbanization, and better access to digital technology, several locals and even expatriates alike are opting to start a small business in PNG. If you want to sell your products, provide new services, or even run a home-based business, it is crucial to understand the procedure of how to register a company in PNG. This blog will provide you with details about everything you need to know before launching and growing your business in Papua New Guinea.  

Business Environment in PNG 

• Before understanding how to start a small business in PNG, it is crucial to understand the business landscape of PNG. Papua New Guinea is a land of major opportunities for trade and investment, especially in the sectors of infrastructure development, natural resources, production, and telecommunication. Here are some common growing sectors in PNG: 

Mining and resources 

• PNG is rich in resources such as mining, forestry, fisheries, and oil and gas. Porgera mine’s reopening along with the Wafi-golupu copper-gold project is progressing and is increasing activity. This sector is a key driver of economic growth and, over the years, has attracted foreign direct investment.  

Construction 

• One of the most thriving sectors in PNG is infrastructure; the country is renowned for its infrastructure development. The construction sector in the year 2022 expanded by 13.4% and is projected to grow up to 5% more in the year 2025 because of LNG and mining infrastructure. The government of the country is prioritizing energy, urban development, and roads.  

Telecommunications 

• It is one of the fastest-growing sectors of PNG and has expanded by 155% in the year 2023. The prominent industry players in this sector are Vodafone PNG and Starlink, which are driving double-digit growth. It has been projected that for the year 2025, this sector will grow by 20% due to web development, cybersecurity, and AI.  

How to Register a Business in PNG 

• One of the first steps to starting a small business in PNG is registration. In order to register a company in PNG, you will have to go through the investment promotion authority, which mainly handles business registrations along with company compliance. Here is how to do it: 

Select a business structure  

• You need to select an appropriate business structure based on the type of your business activity, such as a sole trader, limited liability company, along with partnership.  

Name search 

• You need to select 3 to 4 business names and select the most appropriate name. Submit your proposed name to the Investment promotion authority through their online portal or by going to their office. Pay the fees and wait for the approval, which usually takes 48 hours.  

Registration with IPA  

• You need to submit the following documents: 

• Registered office address 

• Identification proof of shareholders and directors 

• Memorandum and Articles of Association (for LLCs) 

• You can use IPA’s portal and even third-party services such as PNG SME’s IPA online registration.  

Tax compliance  

• After submitting the documents, you need to obtain a taxpayer identification number. For this, you have to register with the Internal Revenue Commission (IRC) and also do customs registration, which is mandatory if your business is based on imports and exports.  

Additional requirements 

• You need to obtain sector-specific permits if your business is involved in the mining and agriculture sectors. After this, you will have to open a corporate account with the local banks after IPA registration.  

How to Create a Business Plan 

• To successfully start a small business in PNG, you will have to create a business plan. A business plan is basically a structured document that outlines your goals, strategies, and a roadmap for attaining them. It is crucial for getting funding, attracting business investors, and navigating your business operations. Here is how to create an effective business plan: 

Executive summary 

• In this section, you will have to summarize your entire plan and include the mission statement, market opportunity, financial highlights, and overview of products and services. You need to keep it precise but make it compelling.  

Business description 

• You need to explain the purpose, structure, and operations of your business. You need to describe the products and services offered and the value proposition for customers.  

Market evaluation  

• Conduct thorough research about your industry, competitors, and target market. You will also have to include market trends and size, competitive advantages, and consumer demographics.  

Marketing strategy  

• You need to outline a plan for how you will attract and retain customers. You need to include sales forecasts, advertising plans, and pricing strategy.  

Management plan 

• Highlight your leadership as well as the team’s expertise. You need to include bios of key people, organizational structure, and roles and responsibilities. 

Operating plan  

• You need to provide details on how your business plan will operate daily. Include the information about location and facilities, manufacturing processes, and service delivery methods.  

Financial plan 

• Lastly, you also need to provide financial predictions for the next three years. This will include a profit and loss statement, funding requirements if you are looking for investment, and balance sheets as well as cash flow projections.  

Legal and Regulatory Compliance  

Business structure  

• A minimum of 2 directors are required for the local company, and one of them should be a resident of PNG. You will also have to provide a registered office address in PNG.  

• It is also mandatory to get an IPA approval before operations. Submit an application with investment plans and business details.  

Tax obligation 

• You also need to appoint a PNG-resident public office within the first three months of your operations. GST registration is mandatory if your annual turnover is more than PGK 100,000.  

Ongoing compliance  

• You will submit financial statements and your annual returns to IPA. Apart from this, compliance with the central bank regulations for forex transactions is mandatory. Lastly, you will have to follow the Companies Act 1997 (amended in 2014) for shareholders’ rights and insolvency.  

IPA compliance  

• If you are a foreign enterprise, you must apply for certification by using IPA forms, along with a company constitution and proof of foreign registration.  

• For registering, you need to file Form 1 and Form 6 (name reservation) with the company’s office.  

Conclusion 

• PNG has become a land of opportunities, and there is never a better time to start a small business in PNG than now, when all the sectors are thriving. With the right business idea and a solid plan, you can easily create a sustainable and rewarding business. Remember, the key step is to first register a company in PNG. If you need assistance with how to open a business in PNG, contact Tetra consultants, and our team will assist you in navigating through the company registration process.  

• Contact us, and our team of experts will get back to you in 24 hours.