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Panel dangles incentives for investors
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Posted on Nov 27 1998
A subcommittee of the Economic Recovery and Revitalization Task Force pushing the creation of a free trade zone in the Northern Marianas has outlined a package of incentives to lure foreign investors into setting up business here.
The commonwealth is hoping the establishment of a free trade zone would stir economic activities in the islands which have been suffering from investment drain since last year due to stringent business requirements.
The economic meltdown in Asia, which used to be a rich source of investments for CNMI, has further thinned entry of fresh capital into the slumping tourism-led economy. In August, only three investors had been issued foreign investment certificates to do business on Saipan.
The Free Trade Zone Committee, chaired by Bob Jones, has listed a number of incentives to attract companies into locating in the FTZ, which is patterned after the Philippines and Hawaii. It is envisioned to be operational by next year.
Among the key incentives drawn up by the subcommittee are unrestricted repatriation of profits, low business tax, quota-free treatment of qualified goods exported to the mainland as provided in Headnote 3(a), unhampered entry of capital goods, and tax benefits for employees.
The subcommittee says CNMI’s proximity to Asia, modern banking and financial services, low crime rate, reliable shipping schedule, direct dial communications network, and US standard mailing system make the islands a conducive place for investments.
“Most of the nations in the western Pacific and many within the southeast Asian region have established such zones. However, none of the existing free trade zones have the advantage afforded the Commonwealth,” Jones said in a press release.
Local officials said the financially-troubled government is taking the route of putting up a free trade zone to reboot the teetering island economy and address the impending departure of the half-a-billion-dollar garment industry when trade barriers are brought down with the implementation of the General Agreement on Tariffs and
Trade by the World Trade Organization beginning year 2003.
