Chapter 26 - Foreign Investment

Chapter 26 - Foreign Investment

27.2601 Policy and legislative findings.

(a) The Legislature finds that:

(1) There is interest among foreign persons to make large investments on a long-term basis in American Samoa.

(2) The Territory desires such investment but needs to regulate foreign investment to attract appropriate investment and to protect native resources.

(3) In order to attract appropriate long-term investment, there is a need to provide access to the Territory for foreign investors and their families.

(4) Such investors need to have access to the Territory to manage and supervise their investments, but such access must be controlled.

(b) The Legislature intends by this act to establish a clear statutory framework for the regulation of foreign investment. Foreign investment is to be generally encouraged, on a selective basis, to strengthen and diversify the Territory's economic base. Direct competition with existing locally owned small businesses is not desired, but new industries and high labor using industries are desired. Foreign investors are to be given all reasonable opportunities and assistance in bringing commercially desirable and environmentally safe activities into the Territory. Furthermore, it is the policy of the Territory to use foreign investment to supplement, not displace, the needs and desires of the people of the Terrirory. All foreign investment is to be consistent with, and not destructive in any way, of existing social, cultural, economic and natural resources management goals. Newly developed goals may be introduced at any time, but enterprises already operating shall not be unfairly hindered or restricted by retroactive application of goals.

27.2602 Definitions.

As used in this title, unless the context requires otherwise, the following meanings apply:

(a) "Certificate of foreign investment" means the certificate issued by the Director of Development Planning which includes information required by section 27.2609.

(b) "Enterprise" means any kind of for profit business accepted and, pursuant to this act, of appropriate size, location, character or duration which derives not less than 60% (sixty percent) of its gross receipts from foreign sources.

(c) "Foreign Investment" means capital in any form to be invested by foreign investors in American Samoa in an amount of not less than $1,000,000 (one million U.S. dollars) per investor in their individual enterprise or $250,000 (two hundred fifty thousand U.S. dollars) per investor by a group of investors in an enterprise of not less than $5,000,000 (five million U.S. dollars).

(d) "Foreign investor" means a natural person:

(1) Seeking or holding a certificate of foreign investment or a foreign investment visa; or

(2) Without United States citizenship or nationality, or permanent residency in American Samoa, who wishes to participate in a foreign investment in American Samoa.

(e) "Director" means the Director of Development Planning.

27.2603 Compliance with this chapter.

(a) No person may make any foreign investment in American Samoa directly or indirectly unless the provisions of this chapter have been complied with.

27.2604 Duties and powers of the Director.

(a) The Director shall be provided with appropriations in an annual budget sufficient to handle effectively all of his duties.

(b) The Director is authorized to hire staff necessary to effectively execute all of his duties. Such staff shall be career service and must have appropriate educational, administrative and work related experience.

(c) The Director shall have the following affirmative duties related to foreign investment:

(1) to develop, publish and implement written guidelines and programs of foreign investment in American Samoa consistent with the policy of the act;

(2) to publish annually and make available to any interested person a comprehensive list of industries or classes of industries in which foreign investment is to be promoted, prohibited, or left to the discretion of the foreign investors;

(3) to accept and to thoroughly review all applications to determine whether the proposed enterprise meets the investment criteria in section 27.2606;

(4) to conduct public hearings on all proposals as necessary to evaluate public opinion and gather information and to have regular consultations with the applicants during review of the application;

(5) to issue approval letters to applicants upon mandatory review of the criteria in section 27.2606; otherwise to not issue such letters;

(6) to give 180 days to holders of approval letters to secure financing to implement the proposal;

(7) upon receiving satisfactory proof of secured financing, to issue a certificate of foreign investment in the name of the applicant and to forward it to the Governor for review; otherwise to not issue such certificates;

(8) to submit an annual report on January 31st of each year to the Governor and Legislature on all foreign investment activities during the previous calendar year, showing a list of all approval letters and certificates of foreign investment issued, pending or in effect, and those suspended, modified or revoked, and other relevant information;

(9) to actively coordinate the meaningful review by and input of other governmental agencies the functions, services and burdens of which may be affected by a proposed foreign investment, but no agency which desires to contribute relevant information to the review of a proposal may be excluded.

(d) The Director has the following discretionary powers to carry out his above duties:

(1) to adopt and promulgate rules pursuant to the Administrative Procedures Act, section 4.1001 et seq., not inconsistent with the provisions of this chapter;

(2) subpoena records, books, witnesses, document and any other data, administer oaths, inspect real or personal property related to an application for a certificate of foreign investment, and conduct inquiries necessary to perform his duties;

(3) monitor the operations of foreign investments in American Samoa, and if necessary and after reasonable advance notice to a certificate holder, modify, suspend or revoke a certificate of foreign investment.

27.2605 Application for certificate of foreign investment.

(a) Any foreign investor, indigenous resident, or United States organizer may apply for a certificate of foreign investment by submitting an application to the Director. The application must include the following information:

(1) the applicant's:

(A) name, age, place of residence, nationality and birth;

(B) business history;

(C) medical history;

(D) record of any felony arrests or convictions;

(E) spouse, dependents and all other business partners in the proposed enterprise.

(2) a detailed description of the proposed enterprise which includes:

(A) the form of business and the amount of the foreign investment;

(B) the exact nature of the operations of the enterprise;

(C) the expected number of local residents to be employed;

(D) the expected duration of the enterprise;

(E) the demands on local utilities and public services and ability to provide self-generated utilities or acceptable waste disposal service;

(F) the planned training program for local resident employees, if any;

(G) the amount of capital, in whatever form, to be invested by the applicant which is the personal property of the applicant, and the amount of equity ownership available to American Samoa residents;

(H) the amount of financing needed to begin operations of the enterprise and the sources of the financing;

(I) the number of non-local residents expected to be employed by the enterprise;

(J) information on the likely ecological impact on the Territory;

(K) other information the applicant desires to include to demonstrate a positive impact on the criteria listed in section 27.2606.

27.2606 Criteria for applications review.

(a) In reviewing an application for a certificate of foreign investment, the Director must review and make written findings of the criteria in subsection (b), and specifically whether the proposed enterprise will have a positive, negative or neutral impact on the Territory. A finding of a negative impact on any single criteria does not preclude the issuance of a certification of foreign investment nor does a numerical majority of positive impact findings guarantee the issuance of a certificate of foreign investment. The Director shall take an accommodate, overrall approach in reaching his decision on each application. The Director shall actively consult with the applicant regarding his concerns on any of the criteria. All records shall be kept for at least 3 years.

(b) The Director must consider, exclusively, the following criteria:

(1) the need for and desirability of the enterprise to operate in the Territory;

(2) the ability of the enterprise to export goods or services from the Territory or, to provide goods or services in the Territory which previously had been imported;

(3) the likelihood that the enterprise would be and remain in compliance with all local and applicable federal laws and rules;

(4) the number and type of newly created employment positions for qualified American Samoa residents and the extent to which non-residents will be used in the enterprise operations;

(5) the impact of the enterprise on the ecology of the water, land, air, and living conditions in American Samoa;

(6) the extent to which the enterprise will compete directly or indirectly against existing local businesses, considering the likelihood of whether the technology or processes of the enterprise can be developed locally;

(7) outlines for construction, including locations, architectural plans, materials and grade, and compliance with zoning laws and uses in effect in the Territory at the time of the application;

(8) the extent to which the enterprise would include American Samoa residents in joint ventures or equity ownership in the enterprise;

(9) the extent to which the enterprise can, or plans to, use local contractors, subcontractors, labor, materials and other suppliers in its establishment, construction and operations;

(10) the effect upon all local utilities and waste disposal facilities and the capacity of the enterprise to satisfy its own utility and waste disposal needs;

(11) the quality, duration and expended results of a resident employee training program specifically directed toward the skills needed by enterprise;

(12) to the extent determinable, the anticipated length of time the enterprise is expected to operate in American Samoa and the resulting long-term consequences;

(13) the personal integrity, business history and business reputation of the foreign investor applicants and any local applicants for the same enterprise;

(14) the likelihood that the enterprise has been organized in bad faith or that the certificate of foreign investment may be misused.

(c) The Director may request of any applicant reasonable documentary proof of any facts alleged in the proposal or provided by communications from the applicant. Refusal to supply requested material may be grounds for negative findings under this section and, ultimately, denial of an application.

(d) If the Director is unable reasonably to determine that impact of any single criteria, without fault of the applicant, it shall be so reported.

(e) After reviewing all the criteria, the Director shall give a written conclusion of whether he approves of the proposed investment based on the total impact of the enterprise's operation.

27.2607 Approval letter-Financing required.

(a) Upon determining, after review of the criteria in section 27.2606, that a proposed enterprise is one which the Director approves of, he shall issue to an applicant a letter of approval. The letter of approval must be issued or denied within 120 days of receiving the application. If an application is denied, the applicant shall be given written reasons for the denial. Reapplications are allowed.

(b) The letter of approval provides no special rights to the applicant nor does it quarantine final issuance of a certificate of foreign investment.

(c) After receiving the letter of approval, the applicant has 180 days to secure and prove access to financing sufficient to construct and begin the operations of the enterprise. Proof of adequate financing must include proof or resources sufficient to initiate the approved enterprise within 120 days of the issuance of the certificate of foreign investment. Failure to secure, and prove to the Director, the necessary financing within 180 days of the issuance automatically voids the letter of approval. There shall be no extensions of time to obtain financing.

27.2608 Certificate of foreign investment-Issuance.

(a) Upon receipt of documentation required by section 27.2607 the Director must either issue or deny a certificate of foreign investment, within 30 days of receiving such documentation.

(b) If the Director denies issuance of the certificate of foreign investment to an applicant he shall state the reasons in writing and forward the denial statement to the applicant immediately.

(c) Notice of issuance of the certificate of foreign investment is forwarded to the Governor for final approval. The Governor may approve or deny the issuance of the certificate and must give specific written reasons in the case of a denial. The Governor may act to approve or deny the issuance within 20 days of receipt of the Director's notice or the issuance will be deemed approved.

(d) Final approval by the Governor means the certificate holder may commence immediately the construction for operation of the enterprise. The certificate is deemed to be the legal equivalent of a business license under section 27.0202 et seq., and no further license is required, except that articles of incorporation or partnership must be filed with the Registrar upon final approval of the certificate of foreign investment.

27.2609 Terms of the certificate of foreign investment.

(a) Every certificate of foreign investment shall contain the following data:

(1) a description of the enterprise and the form of business which will operate it and the location;

(2) name, nationality, age, and current residence of the applicant;

(3) description of additional financial resources required to continue or expand the enterprise beyond the initial starting capital and the date by which such financing must be obtained;

(4) any terms or conditions established by the Director on the foreign investment, including limitations on sites, construction, waste disposal; and

(5) other information deemed necessary by the Director.

(b) The certificate of foreign investment is perpetual in duration and transferable but only with the approval of the Director.

(c) The holder of such certificates must submit an annual report to the Director by January 3rd of each year on activities of the previous calendar year. The report must contain sufficient information to allow the Director to determine whether the certificate holder and the enterprise are in compliance with the terms of issuance. Failure to submit reports on time is grounds for suspension of the enterprise's operation until the report is submitted.

27.2610 Suspension, revocation or modification of certificate of foreign investment.

(a) At all times during the life of a certificate of foreign investment, its holder and the enterprise must be in compliance with the provisions of this chapter and all other applicable laws and regulations. Failure to comply may lead the Director, after giving the certificate holder reasonable notice and opportunity to cure such failures, to suspend or modify the certificate of foreign investment.

(b) The Director may revoke permanently a certificate of foreign investment upon clear evidence that the foreign investor:

(1) has not maintained an approval investment in continuing compliance with the terms of issuance of a certificate of foreign investment;

(2) has committed fraud or misrepresentation in any material assertion in the application for the certificate of foreign investment or in the annual report required under section 27.2609;

(3) has been subjected to an adjudication of bankruptcy under chapter 7 of the U.S. bankruptcy laws regarding the foreign investment;

(4) has failed to comply with any conditions or obligations stated in the certificate of foreign investment, after having been afforded by the Director a reasonable period within which to correct such failure; provided, however, that should the foreign investment fail for reasons beyond the control of the foreign investor, the Director shall provide a reasonable time to the foreign investor within which to refinance the approved investment, or secure participation in alternative approved investment;

(5) has been subjected to a finding by the Attorney General that the corporate parent for the enterprise, if any, has been dissolved; or

(6) has violated any material provision of this chapter and the rules promulgated under section 27.2604 (b).

(c) Should the Director decide to revoke a certificate of foreign investment, the foreign investor shall be afforded a six month grace period following revocation of his certificate in order to take the steps necessary to liquidate, transfer or otherwise dispose of assets connected with the investor's enterprise. The Director shall advise the Attorney General in writing of the decision to revoke the certificate of foreign investment, and compute the six month's grace period date commencing from the date of revocation.

(d) In the event the investment can not be liquidated after proper due diligence within the six month grace period, the government may purchase said investment for its then appraised current value, less 20%, as set by a fully licensed and accredited appraiser. In the event that the government declines to purchase the investment at the indicated time or value, the investor will place his holdings for public sale. The investor is expected to accept any reasonable valid offer and until said time, safely maintain all properties, and pay any appropriate taxes which may come to be in effect in American Samoa.

(e) The foreign investor's foreign investment entry permit and the entry permit held by members of his immediate family shall be valid up to and including the final day of the six-month grace period following revocation of the certificate of foreign investment.

27.2611 Fees.

(a) The fees for applying for a certificate of foreign investment is two thousand five hundred dollars ($2,500) and is non-refundable. This fee covers all costs of the Director in accepting, reviewing and processing the applications.

(b) Additional fees for other costs may be imposed by the Director through adoption of rules under section 27.2604.

27.2612 Enforcement.

(a) To the extent necessary to obtain compliance with any provision of this act of any rule promulgated hereunder, the Attorney General shall assist the Director in enforcing the same.