Subsidiaries in Fiji

Fiji is strategically located in the South Pacific core and has served as a business hub for several decades. It is a reasonable choice for expanding your business owing to its powerful shipping and air connectivity and contemporary ICT infrastructure.

Aspects like various tax incentives, low import duties, and tax-free zones make Fiji feasible to conduct business. The country presents a fixed corporate tax of 20%. If you list on the South Pacific Stock Exchange, the tax rate declines to 10%. Fiji’s tax incentives make the destination appealing for business activities, promising the best investment return. 

Companies can set up a subsidiary business in Fiji to quickly enter the Fijian market as it requires less documentation and compliance requirements. Go through the following guide to understand how to set up a subsidiary in Fiji.

What are the Types of Subsidiaries in Fiji?

The type of subsidiary you choose depends on your business needs and its objectives. You can select from the following options 

Wholly-owned subsidiary

The parent company fully owns a wholly-owned subsidiary. It regulates the subsidiary, including all board seats and voting rights. It is solely accountable for all related debts and liabilities.

Remember these points when setting up a wholly-owned subsidiary in Fiji:

• The new Companies Act 2015 grants a foreign investment registration certificate to sole shareholder/sole director companies. But the director should usually reside in Fiji.
• The Companies Act (2015) grants a foreign investment registration certificate to a foreign company to have sole directors (as far as one director is usually resident in Fiji) and sole shareholder(s). 

Partly-owned subsidiary

Its parent company doesn’t completely regulate a partly-owned subsidiary. The stock ownership ranges between 1% to 49%. Note that the parent company owns the controlling votes in case of critical decisions.

 These subsidiaries can additionally adopt the form of the following companies:

i. Partnership

• In this company, two or more people have shared ownership of the business. 
• Each partner is responsible for property, skill, labor, and money. In return, each of the partners shares the business profits and losses.
• One of the critical benefits of this form of a subsidiary is it is easy and cost-effective. However, the partners’ obligation for the business’s debts can be unlimited.

ii. Limited liability company

• In this business structure, the company’s members are not personally responsible for the company’s liabilities or debts. 
• This type of company merges the features of a partnership/sole proprietorship and a corporation. 
• The key benefit of an LLC is it ensures financial security for the business.

iii. Public Company

• A public company provides its shares for sale to the public. 
• Usually, it is appropriate only for large-scale companies intending to increase capital via public investment in the company.

How to Set Up a Subsidiary in Fiji?

Foreign investors must follow these steps to set up a subsidiary in Fiji.

Step-1: Determine the anticipated company name’s uniqueness and reserve the name

• After deciding on your business name, it must be registered with the Office of the Registrar of Companies. The office will then verify if the proposed name is clear and if already registered. 
• Your proposed company name should contain one of these words at the name’s end:
• Limited Private Company -“Pte Limited” or the abbreviation “Pte Ltd”
• Limited Public Company -“Limited” or the abbreviation “Ltd”
• Unlimited Liability Company
• If the company name is approved, it will only be reserved for 30 days (a one-time extension provided). Company incorporation documents should be recorded with the Registrar.

 Step-2: Preparation of company documents

• The business should draft Articles of Association that discuss the company structure, governance, its shareholders, and share distribution details. 
• The Companies Act (2015) includes standard articles permitted for use. However, several companies opt to consult legal advice from a lawyer to ensure Articles of Association are drafted properly. 

 Step-3: Registration of the company

• To register a subsidiary in Fiji, a company has to submit the documents with an application form and the applicable fee to the Registrar of Companies. 
• The application form needs the company to provide the company’s details, company’s governance, principal place of business, registered office, share structure details, shareholder details, and members’ details.

Step-4: Registration for Tax Identification Number (TIN) and registration for relevant taxes

• The company must submit a Tax Identification Number (TIN) from the Fiji Revenue and Customs Service (FRCS). 
• The TIN registration should be filled and submitted to FRCS with the applicable stamped forms from the Office of the Registrar of Companies.

Step-5: Submission of Tax Identification Number to Office of the Registrar of Companies

• Companies should register the TIN letter to the Office of the Registrar of Companies to issue the Certificate of Registration. 
• Subsequently, the Registrar of Companies will update their taxpayer records by providing a copy of the Certificate of Registration to the FRCS.

Step-6: Get an inspection by Fiji Revenue and Customs Service

• Businesses with a turnover exceeding $100,000 should register for value-added tax (VAT). Moreover, their business premises have to be inspected by FRCS.

Step-7: Get the National Fire Authority Certificate

• Businesses should request the National Fire Authority’s inspection of their locations either by phone or email. Subsequently, NFA officials will inspect it, and if the inspection results are satisfactory, it will provide a compliance certificate to the business.

Step-8: Registration for statutory training tax

• Employers should register for statutory training tax (Fiji National University (FNU)). (FNU is 1% of the total salaries compensated to staff). FNU sends the registration form through mail to the new business office, after which companies should mail the form back to FNU.

Step-9: Get a compliance letter from the Ministry of Employment, Productivity and Industrial Relations after the inspection

• The Ministry of Employment, Productivity, and Industrial Relations inspects all workers in the workplace. 
• After a satisfactory inspection, the Office of Occupational Health and Safety (OHS) will issue a compliance letter to businesses. To get this letter, the company should physically submit the filled application form (OHS form) to the nearest OHS. Other documents to be submitted include National Fire Authority Certificate, Business Registration Certificate, and TIN letter.
• The OHS will inspect that business’ premises after three days of documents’ submission. It then provides a compliance letter if the compliance requirements are fulfilled. Subsequently, you must submit the compliance letter to the Suva City Council (or applicable licensing municipal body) to get a business license.

Step-10: Apply for a business license from the corresponding licensing authority

• The company should apply for a business license from the applicable licensing authority for every location it runs its business. You need to renew the license annually.

Step-11: Registration as an employer with the Fiji National Provident Fund

• A new business should register as an employer with the Fiji National Provident Fund and pay its contributions. 

Benefits of Setting Up a Fiji Subsidiary

Setting up a subsidiary company in Fiji comes with its unique benefits, which include:

• One of the primary benefits of establishing a subsidiary is that it operates as an entity isolated from its parent company. It can be independent of the regulations followed by the parent company.
• Establishing a subsidiary in Fiji allows foreign investors to establish new commercial relations with local partners. Moreover, they can establish joint ventures that explore the advantages of local knowledge by establishing a legal organization in Fiji.
• Using a foreign subsidiary assists in allotting stock options to employees abroad.
• It provides access to new markets for services and products.
• It facilitates the expansion of brand recognition.
• Establishing a subsidiary in the country offers several tax advantages, risk diversification, easy access to cutting-edge technology, and a trained workforce.
• In approximately three days, you can incorporate a subsidiary company and commence your regular business activities in Fiji.
• No restrictions are imposed on using various currencies for regular business operations.
• The government actively pursues foreign investments in Fiji, so there are no limitations imposed on setting up businesses in Fiji.
• Fiji is strategically located and connects to various countries, supporting easy trade and commerce.
• The country’s labor market is quite lucrative. People here speak global languages.

There are multiple free trade zones in Fiji. So, your business benefits from tax and import duties exemption if your office is located in such zones.

Documents to Prepare When Opening a Subsidiary in Fiji

Along with the subsidiary’s incorporation documents, the foreign company must also prepare other documentation to submit to the Trade Register. These documents are:

• Notarized copy of identity proof and address proof of the authorized representative
• Notarized copy of the resolution of a foreign company that mentions the authorized representative’s name and the number of subscriptions of shares
• Notarized copy of the Charter of Foreign Company
• Identity proof and Address proof of Directors duly notarized in the country of origin, including a Resident Director (in the case of the resident Directors, the PAN No. is compulsory)
• Proof of office address (can be lease deed, conveyance, or rent agreement, etc.)
• NOC from the property’s owner

What Business Forms can Fiji Subsidiaries Take?

The parent company can only be called a subsidiary if it possesses 50% to 99% of its shares. In Fiji, you can establish wholly-owned and partially-owned subsidiaries.

Subsidiaries in Fiji can adopt various forms. But the below list specifies the most prevalent business structures and renowned types of Fiji companies suitable for entrepreneurs.

• Partnership
• Limited Liability Company (LLC)
• Joint Stock Company (S.p.A)

It is vital to consider the registration process, tax rates, the benefits derived from each subsidiary type, etc., before deciding the type of business form for your Fiji subsidiary.

Fiji Subsidiary Laws

Fiji subsidiary laws depend on the type of business you aim to set up. The process of establishing a subsidiary in Fiji is straightforward. However, there are certain laws to take into account. 

• You should create Articles of Association for your company. The corresponding documents will define your company’s governance and business structure. They should align with the regulations documented in the Companies Act.
• Obtaining a National Fire Authority certificate is mandatory to authorize that your building is safe to operate a business.
• It is necessary to open a local bank account to handle finances officially.
• It is also mandatory to set up a board of directors with well-defined decision-making abilities.

Post-Incorporation Compliance

Go through the post-incorporation compliance checklist for incorporation of a foreign subsidiary in Fiji here.

• Duty rates and tariffs are repeatedly revised in Fiji; they are also subject to change without notice. Hence, it is vital to meticulously check the current duty rates and tariffs before shipping products to Fiji. 
• A 15% non-resident withholding tax is subtracted from invoices concerning exports of services, software licenses, maintenance, and the return of dividends.
• A 9% VAT is applied to all imported goods and professional services. The importer should pay it to the Fiji Revenue and Customs Authority. Those businesses registered under VAT law can claim an input tax credit in context to VAT paid on imports.

Taxes on Subsidiaries in Fiji

You can take the assistance of professional advice regarding the tax system in Fiji before carrying out a business there.

Tax Incentives for Firms Setting Up a Subsidiary in Fiji

The Fiji Government provides a variety of tax incentives to drive investment. They include the following:

• Quick reduction on certain capital items
• Export income deductions (at 60% rate till 2022)
• Incentives to begin ICT business activities that may include research and development
• Incentives to audio-visual film productions in Fiji
• Incentives to agriculture
• Incentives on medical investments
• Incentives for registering on the South Pacific Stock Exchange
• Tourism-related concessional assistance as per the Income Tax Act
• Incentives in tax-free regions with an income tax exemption up to 13 years (depending on the level of investment)
• Incentives on corporate bonds’ listed on the South Pacific Stock Exchange
• Employment incentives (including a tax deduction for salaries paid during family and paternity care leave; tax deduction for staff training via recognized training providers)
• Incentives for investment in the subdivision of lots for housing or commercial activities
• Incentives in context to the renovation of buildings in cities
• Incentives for private companies investing in buildings for use by government agencies or entities approved by the government

Other Important Considerations

In addition to the legal process of establishing the subsidiary system in Fiji, you must consider other aspects.

• It is essential to focus on residence permits, insurance, registering for any licenses (if needed), and registration with the federal tax administration.
• Time and money are two essential components companies must invest in to set up Fiji subsidiaries.
• Other sectors requiring licenses are employment agencies, education, health care, gambling, public transport, energy, etc.

How Can Multiplier’s Employer of Record Help You Hire & Expand in Fiji?

It requires substantial time and investment to expand a business internationally. Adhering to a country’s industry standards and labor rules becomes the priority.

You can utilize services from a third-party service company like Multiplier. We handle all formalities, like payroll processing, onboarding talent, etc., when approaching a new market without setting up an entity. Furthermore, Multiplier assists you in onboarding local and global talent while also promising adherence to Fiji’s regulations and labor laws.