What makes the economy of Samoa a hotspot for global investors?

Despite being an island country with a small area, Samoa is always one of the ideal destinations for foreign investors. This article below will discuss the strength of the economy of Samoa.

Samoa’s strategic location

Samoa is a small but densely populated island nation located in the center of the South Pacific Ocean. Samoa enjoys a prime location just 2,740km northeast of New Zealand and only 720km northeast of Fiji. The country is made up of an archipelago of 9 islands, 4 of which are inhabited. The two largest islands are Savai'i and Upolu. These islands are ranked among the most beautiful islands in the South Pacific. Samoa is famous for its volcanoes, caves, waterfalls and beautiful coconut beaches.

Samoa's political system is a unified parliamentary democracy. Samoa is a member of the United Nations and the Commonwealth of Nations, whose official languages ​​are Samoan and English. The country's strategic location in the Pacific Ocean and the state's relationships with the United States are the key factors contributing to the prosperity of the economy of Samoa.

The strategic location has greatly contributed to the economy of Samoa

The promising economy of Samoa

Samoa's economic system depends largely on agricultural exports, development aid and especially private capital from foreign investors and businesses. The Samoan government has called for the deregulation of many complicated financial sectors, encouraging international businesses to continue investing while protecting the environment. Moreover, Samoa is one of the countries with special preferential policies for international companies. Economists have asserted that Samoa's economic system flexibility is the fundamental strength of the country's future economic progress. Samoa became the 155th member of the WTO in May 2012 and graduated from Least Developed Country status in January 2014. Samoa has many countries as trading partners such as: New Zealand, Australia, United States States, American Samoa and Japan.

Samoa’s GDP achieved more than $2 billion last year - an impressive figure for a small island nation. It confirms just how potential Samoa's economic system is. The agricultural sector is considered a key economic sector when it requires nearly two-thirds of the labor force. Only in the last 7 months of 2020, the total export value including re-export accounted for 28% (USD 15.55 million) and the export of domestic products accounted for 72% (USD 40.06 million). The main export items are fresh fish, taro, crude coconut oil, beer, tobacco. In the same period, the total value of imported goods was $475.37 million. Moreover, the service and tourism industries can be considered as the fastest growing occupations in Samoa, accounting for almost two-thirds of Samoa’s GDP.

Agriculture is considered one of the key industries of Samoa

Although the Covid-19 epidemic is raging around the world and shaking all economies from large to small, Samoa's economic system seems to be affected very little. It is due to the fact that the most important part of the country's economy is remittances from Samoans working abroad, as well as capital from investors from other countries around the world. In which, New Zealand, Australia and the United States are the main sources of remittances.

Advantages when investing in Samoa

So why Samoa? Why are investors particularly interested in this island nation? Below we will list some of the benefits and why Samoa is so attractive to foreign businesses.

The first thing that makes Samoa an ideal location for investors from all over the world is that the country's political and social environment is extremely favorable for investments. Indeed, this country is known as a peaceful country and the economy of Samoa is always stable. Samoa has a common law system of England. In particular, the protection of the identities and records of shareholders and offshore investment directors is always strictly adhered to. The government has taken a strong stance and enacted numerous laws aimed at combating fraud and money laundering after numerous global commissions stepped up to try and reshape Samoa's economic system. In addition, the workforce is both more qualified and more accessible in terms of cost.

Secondly, the tax system in Samoa is also considered as one of the main reasons attracting investors to set up companies as well as foreign businesses to set up headquarters here. In particular, the government's repeal of some business-related taxes has significantly contributed to improving the revenue and cash flow of many companies.

Samoa’s tax system attracts many investors and foreign businesses

The next thing that many businesses consider before deciding to invest into a specific country is the conditions and business environment. Samoa's economic system as well as the government legislation always support and create the most favorable conditions for entrepreneurial innovation, which is most evident in the policies that assist the establishment of a company. Indeed, when setting up a company, there is no minimum capital required. A legal or natural person can act as a company director or shareholder. If you wish, these officers can accumulate leadership roles as a shareholder. Furthermore, these shareholders may or may not reside in Samoa. In addition, there is not any regulation on the trading limit of each company. Also, all exchanges of a company outside of Samoa are exempt from fees. The use of multiple currencies is also unrestricted.

Last but not least, we also need to pay attention to the location of this island nation of Samoa. Located in the heart of the Pacific, the country is an ideal offshore jurisdiction and a vital connection among the 3 most prominent continents. Samoa will be the perfect hotspot if you want to expand your company's market to Oceania (New Zealand, Australia), Japan and the US.