French Polynesia applies the principle of freedom of investment. Nevertheless, it has implemented specific regulations for foreign investments. Any natural or legal person, including foreign nationals, can invest in projects of any kind. Investments affecting public order or health, as well as those which are contrary to the laws and regulations applicable in French Polynesia are prohibited.
Definitions
Investissements
By investment we mean:
- the acquisition of property or real estate rights;
- the purchase, creation or extension of a business, branch or any business of a personal nature;
- all other operations when, alone or in combination, concurrent or successive, they have the effect of enabling one or more persons to take or increase control over a company that exercises an economic activity, whatever its form, or to ensure the extension of such a company already under their control.
Foreign
- A natural person is said to be foreign when s/he does not have French nationality.
The investment made by a natural person who does not have French nationality will therefore be considered as a foreign investment. However, the regulations on foreign investment do not apply to citizens of the European Union. - The nationality of legal persons, which is not defined by any general text, is assessed on the basis of two criteria:
The head office criterion
As a rule, it is the registered office that determines the nationality of the company. Article 1837 of the Civil Code provides that “any company whose head office is located on the French territory is subject to the provisions of French law”.
But this criterion is sometimes not sufficient to assess the actual nationality of the legal person. This is why the concept of control is used.
The control criterion
This amounts to taking into account the nationality of the persons controlling or directing the company in question.
As a general rule, a French company of which more than 20% of the capital listed on the stock exchange (or 33.33% of the unlisted capital) is held by foreigners or by French companies themselves under foreign control shall be considered as being under foreign control. The investment made by such a company will then be considered as foreign.
This 20% threshold is not, however, an absolute rule and the administration may retain or accept a different threshold in order to take into account the reality of the control exercised and, in particular, elements other than the sole capital share.
Real estate or real estate rights
Real estate, in comparison to movable property, is property that cannot be moved (immovable property), the Latin root of the word “immovable” meaning “that does not move”.
This may concern bare land, a building or part of a building for residential, office, industrial, etc. purposes. Real estate is defined in articles 517 to 526 of the Civil Code. Certain rights, such as usufruct and mortgage can also be legally attached to immovable property. In addition, real estate rights can also consist of company shares.
Regulation applicable to foreign investments
The regulations relating to foreign investments applicable in French Polynesia are governed by resolution n°96-141 APF of 21 November 1996 and its implementing order n°285/CM of 17 March 1997, as amended.
Foreign investments subject to prior authorization
Foreign investments in French Polynesia are subject to prior authorization when they consist in:
- the acquisition of property or real estate rights;
- an investment in the fishing, aquaculture, mother-of-pearl or pearl industries, whether or not they require to occupy the public maritime domain;
- an investment in audiovisual or telecommunications.
Procedure for examining an application for prior authorization
After receipt of the application addressed to the President of French Polynesia, along with the complete file, registered with the Polynesian Authority for Investments, an acknowledgment of receipt is sent to the applicant (or his representative). The file is sent to the French Polynesian departments concerned, under cover of their supervising ministries, and to the Mayor of the municipality where the project is located, in order to obtain their technical advice within 15 days.
Upon receipt of the advice, the Polynesian Authority for Investments finalizes the examination of the application. The Minister of Finance and Economy, responsible for Energy, Comprehensive Social Welfare and Coordination of Government Action, submits the application to the Council of Ministers for authorization.
A favorable decision is formalized by an order of the Council of Ministers published in the Official Journal of French Polynesia. After formalization and notification of the favorable decision, the funds intended for the financing of the investment can be released.
An unfavorable decision is formalized by a letter from the Minister of Finance and Economy, duly authorized for this purpose by the Council of Ministers.
A standardized report on the achievement of the investment is drawn up and sent, in triplicate, to the Polynesian Authority for Investments, within 20 days of the completion of the authorized investments.
To be noted:
The authorization is issued on a nominative basis to the investor and cannot be forwarded to another natural or legal person of foreign nationality without prior authorization from the competent authority.
When the legal achievement of the operation and the corresponding regulations are not concurrent, a separate report must be drawn up, on the one hand for the legal achievement and, on the other hand, for each regulation.
In the event that an authorized operation is not carried out or is only partially carried out, this should be reported to the administration.
Formalities relating to the filing of an application for prior authorization
- Send your application for prior authorization for foreign investment to the President of French Polynesia, along with the duly completed form provided for this purpose, and the documents required for the examination of the application, all in duplicate;
- Send your application by post by registered letter with acknowledgment of receipt, or hand-deliver to:
Invest in Tahiti, Investment Promotion Authority of French Polynesia
1st Floor – Annex Building of Tarahoi’s Building
24 avenue Dupetit-Thouars, Papeete – Tahiti – French Polynesia
BP 1677 – 98 713 Papeete – TAHITI
+689 40 50 56 00
secretariat@dpi.gov.pf
Content of the application for prior authorization for a foreign investment
For a natural person, provide in duplicate (1 original + 1 copy):
- a letter of application addressed to the President of French Polynesia;
- the prior authorization for foreign investment application form duly completed and signed by the applicant or his representative* (* provide a power-of-attorney);
- a copy of a valid ID;
- a copy of a valid residence permit, if s/he resides in French Polynesia;
- a resume;
- a bank financing certificate or any document justifying the availability of funds intended for financing the project.
For a legal person, provide in duplicate (1 original + 1 copy):
- a letter of application addressed to the President of French Polynesia;
- the prior authorization for foreign investment application form duly completed and signed by the applicant or his representative* (* provide a power-of-attorney);
- a copy of a valid identity document of the representative(s) of the company;
- a document presenting the legal person (name, activity, registered office, shareholders, subsidiaries, etc.);
- a copy of the articles of association;
- a bank financing certificate or any document justifying the availability of funds intended for financing the project.
Additional documents depending on the nature of the investment to be attached in duplicate:
For a real estate acquisition, provide:
- a copy of the sales agreement;
- a copy of the development information note (provided by the Town-Planning Department);
- an extract from the cadastral plan.
For the creation or take-over of a business, provide:
- a file presenting the investment project (nature of the investment, summary business plan, marketing strategy, number of jobs existing or to be created, etc.)
To acquire a stake in a company, provide:
- a promise to transfer shares/securities.
The standard forms can be downloaded here:
- Form n°1 – Application for prior authorization for a foreign investment in French Polynesia
- Form n°2 – Report on an authorized foreign investment in French Polynesia
The standard forms can be downloaded here:
Foreign investments subject to declaration
Foreign investments made in French Polynesia, which do not fall under the prior authorization regime, are subject to a declaration to the President of French Polynesia, within 3 months after their completion.
However, foreign equity investments not exceeding 20% of the share capital or voting rights of listed companies or 33.33% of the share capital or voting rights of unlisted companies are exempt from any declaration.
Formalities relating to the declaration of a foreign investment
- Send your foreign investment declaration to the President of French Polynesia, along with the form provided for this purpose, all in duplicate (1 original + 1 copy);
- Documents to be provided with the form:
– For a repurchase: a deed of sale of the company;
– For a creation: proof of creation and/or updated articles of association (Tahiti number, RC number, etc.) - Send your declaration by post or hand-deliver to:
Invest in Tahiti, Investment Promotion Authority of French Polynesia
1st Floor – Annex Building of Tarahoi’s Building
24 avenue Dupetit-Thouars, Papeete – Tahiti – French Polynesia
BP 1677 – 98 713 Papeete – TAHITI
+689 40 50 56 00
secretariat@dpi.gov.pf
The standard forms can be downloaded here:
Financial transfers
Financial transfers from French Polynesia to foreign countries are not subject to any tax or customs restriction. There are no reporting requirements with respect to transfers between Metropolitan France and the Overseas Communities such as French Polynesia.
On the other hand, in pursuance with Articles L.721-4, L.731-5, L.751-6, L.761-5 and L.741-6 of the Monetary and Financial Code, there is a reporting obligation between these communities and foreign countries, whether they are Member States and Third-States of the European Union. However, transfer amounts under XPF 1,193,317 (EUR 10,000) are exempted from reporting (Articles L.741-4, L.751-4 and L.761-3 of the same code).
The freedom of foreign investment is the principle adopted. Foreign investors do not automatically benefit from a right of residence, which remains within the State jurisdiction.