Fisheries Industries

Overview

Fishing is cherished for its recreational and social aspects in Fiji. In relative terms, fisheries is the third largest natural resource sector, behind sugar and “other crops”. Also important in Fiji is tourism, which has an important relationship to the fisheries sector.

The Fisheries sector boasts diverse resources of marine life species. These species range from finfish products such as fish species like yellow fin tuna, big eye tuna, albacore tuna, marlin, swordfish, mahi-mahi, and deep water fish like snapper and reef fish species like sea-bream, trevally, groupers, coral trout and rock cods to aquaculture products which include prawn, seaweed, giant clam and tilapia farming.

The Tuna industry dominates sector in terms of output and export.

The Tuna industry dominates the sector in terms of output and export. The overall performance of the sector over past years is attributed to increased catch of tuna for the Japanese sashimi market. The performance of the sector is closely linked to the growth of offshore fisheries.

Fish from Fiji are either exported frozen or fresh chilled to overseas markets.

Supply

The government has several strategies to increase the national fish supply. This involves facilitating private sector growth, promotion of aquaculture, encouraging the harvesting of tuna resources by small-scale fishers, and supporting the marketing of fishery products landed in remote parts of the country.

Exporting

Tuna Export to the European Union Market

Compliance to EU Fish Export Standards requires vessels, crew, processing plants and storage facilities certified by the Competent Authority.

Tuna Export to other Markets

For major Fiji markets such the US, Japan, Australia, Canada, European Union markets and New Zealand, the exporter is required to adopt and implement the following food safety systems:

i. HACCP (Hazard Analysis Critical Control Point System) Plan

ii. Standard Sanitation Operating Procedures Plan (SSOP)

iii. Good Manufacturing Practices Plan (GMPP)

POTENTIAL FISHERIES INVESTMENT OPPORTUNITIES

Aquaculture

Prawns	Tilapia	Asian Carp, Ornament Fish
Shrimp	Milkfish	Giant clams
Seaweed	Pearl Oyster	Trochus
Sea Cucumber	Sea grapes

Offshore Fishery

Tuna as the major foreign exchange earner for Fiji’s fishing industry is boosted by the development of domestic tuna long line cannery and processing companies and to the vast lucrative sashimi and sushi markets in Japan. Major export products include:

· Deep water snapper

· Tuna species – Bigeye, Yellowfin, Albacore, Skipjack

· Other species – Swordfish, Blue Marlin, Striped Marlin, Mahimahi, Wahoo

· Shark, Sunfish, By-catch

Inshore Fishery

The inshore resources that are exported includes aquarium commodities such as ornamental fish, live ornamental invertebrates, live coral and live rock.

Beche-de-mer	Shark fin/meat	Live rock
Corals	Live Food Fish	Reef Fish

Resource Base

Fiji has in the 200 nautical miles Economic Zone archipelagic baseline in an area totaling 1,145,000 square kilometers. The large stock of marine resources such as tuna species of Yellow fin, Skipjack, Albacore, and Big eye in the EEZ presents a lot of opportunities for investment.

There are 411 registered "Qoliqoli" or customary fishing right areas throughout Fiji, which support the Inshore Fisheries. There are also non-tuna species namely Marlin, Sailsh, Mahi-mahi, Barracuda and Opah. The inshore waters of Fiji are the bases of the reef fish.

The coastal waters, coastal mangroves and surrounding reefs have large stocks of fish, crabs, clams, shellfish, prawns, lobsters, etc. In addition, a variety of seaweed are also available in the Fiji waters.

The Qoliqoli are demarcated for indigenous Fijians as their customary fishing ground.

BUSINESS OPPORTUNITIES IN FISHING AND OR FISHERIES INDUSTRIES

Fishing venture is a restricted activity and an investment must have 30% of shares held by a Fiji Citizen(s). The foreign investor must have at least %500,000 in owner’s contribution or paid-up capital for companies in the form of cash from the operational date, to be fully brought into Fiji within the implementation period.

Investment Approval process include:

· Registration of your business with Investment Fiji for a Foreign Investment Registration Certificate (FIRC) (www.investmentfiji.org.fj)

· Register business with Registrar of Companies (ROC)

· Register business with Reserve Bank of Fiji (RBF)

· Register business with Fiji Revenue and Customs Authority for VAT and Tax Identification Number (FRCA)

· Obtain business license from Local Authority such as City Councils

· Register with the Fisheries Department for licenses

COMMERCIAL FISHING VENTURE

(a) Fishing License application requirements

Any application for any fishing license must be made only after the fishing vessel is in the country

(b) Two (2) Categories of Fishing License

1. Offshore – Tuna and Deep water snapper

2. Inshore – Fishing of Fish. BDM, Aquarium product (Artisanal)

For Tuna Long-Line Fishing Vessel License Requirements, there is a list of requirements that needs to be fulfilled and these requirements can be obtained from the Fisheries Department

INCENTIVES OFFERED

(i) Tax Rate Reduction

YEAR	RESIDENT COMPANIES	NON-RESIDENT COMPANIES
2009	From 31% to 29%	From 31% to 29%
2010	From 29% to 28%	From 29% to 28%
2011	28%	28%
2012	20%	20%

(ii) Investment Allowance

60% deduction for investment allowance can be claimed between 2009 and 2012 (both years inclusive) in respect of qualifying expenditure relating to an agricultural, forestry or marine resource business.

(iii) Accelerated Depreciation

(a) Accelerated depreciation for building erected before 2001 has been extended to 2014.

(b) 20% depreciation for building used for agricultural, commercial or industrial purpose can be written off within any 5 of 8 years.

(c) 100% write off will be available in the year the expenditure was incurred on water storage facilities and renewable energy plant and machineries. This will also be available to new plants and machineries used for manufacturing purposes.

(iv) Loss Carried Forward

Loss carried forward can be claimed up to 4 years. Loss carried forward by a company is allowed if that entity satisfies the continuity of ownership test or the same business test.

(v) Dividend Exemption System

Exemption from tax at the shareholder level is to be based on percentage of dividends subject to tax at the company level

CONCESSIONS

(vi) Production Input

All goods used as raw materials in the manufacture of approved goods not available locally will attract 3% fiscal duty + 15% VAT, and all raw material used for manufacturing by companies located outside of Viti Levu will attract 0% fiscal duty + 15% VAT.

(vii) Capital Items

Duty rates on capital items (which refer to machinery used in the manufacture of approved goods) will attract 0% fiscal duty + 15% VAT.

(viii) Duty Suspension Scheme

a) Enables exporters to have access to inputs without having to pay for duties upfront.

b) Imported goods are conditionally relieved from payment of fiscal duty and VAT on the basis that such goods will be substantially transformed through manufacturing or processing and subsequent exportation.

c) The Scheme would entitle exporters to import duty free an amount equal to the proportion of approved imported inputs required to produce exports. This is called entitled Proportion (EP).

d) Administered by the Fiji Export Council, which is a private sector led organization.

e) Zero fiscal duty on New Machinery and Equipment

· Specialised machineries directly used for fisheries purposes. The importation under concession is subject to the condition that a letter of approval is issued by Department of Fisheries in relation to goods under concession.

· For small and micro enterprises (SME’s), Income tax exemption to be applicable to selected sectors with maximum turnover threshold of $300,000.

(ix) Incentives available under Tax Free Region Incentive is as follows:

· Tax Free Region incentives available to a newly incorporated entity engaged in a new trade, business of manufacture established in the following areas:

o Vanua Levu- including Taveuni, Rabi, Kioa and other islands generally included for government’s administrative purposes as being in the Northern Division;

o Rotuma; Kadavu; Levuka; Lomaiviti; and Lau.

· Any company may apply to the Minister for Finance in prescribed form for an operating license.

Criteria for grant of License

· The company has to be newly incorporated entity engaged in a new trade, business or manufacture.

· The minimum initial level of investment should be $250,000 from January 2010.

Criteria for Grant of License

(i) The company is a newly incorporated entity engaged in a new trade, business or manufacture

(ii) The minimum initial level of investment should be $250,000 from 1 January 2010.

Tax Exemption Available

1. The income of any new activity approved and established between 1 January 2010 to 31 December 2014 shall be exempt from tax as follows:

• Capital investment from $250,000 to $1,000,000, for a period 5 consecutive fiscal years; or

• Capital investment from $1,000,000 to $2,000,000, for a period of 7 consecutive fiscal years; or

• Capital investment above $2,000,000 for a period of 13 consecutive fiscal years.

2. The income of any new activity approved and established from 1st January 2015 shall be exempt

from tax for a period of 13 consecutive fiscal years with an initial capital investment of $2,000,000 or

more.

Duty Exemption

• Import duty exemption on the importation of raw materials, machinery and equipment (including parts and materials) for the establishment of the business for 12 months from the date of approval. The duty exemption will cease upon the establishment of the business in the Tax Free Region.

Other benefits under the TFR

• Additional 5 years of income tax exemption isavailable to any company granted a license and having indigenous i-Taukei landowner equity of atleast 25 percent.

(x) Vanua Levu Tax Incentives

• The incentives are applicable to existing businesses in Vanua Levu

• The package entails the following:

o 40% Tax Deduction on extension and renovation expenses with a minimum qualifying expenditure of $50,000.

o The incentive is available from January 1^st 2012.

(xi) Manufacturing

Food Processing & Forestry

100% of the amount of investment as a deduction for investing in food processing as well as forestry. Re-investment will also be allowed for expansion purposes. In order to qualify, the investor should utilize 50% of local produce in its production process.

(xii) Employment Taxation Scheme

Employment Taxation Scheme – 150% of the salary and wages paid within 1 January 1997 and 31 December 2012 are tax deductible. The deduction is restricted to salary and wages paid in respect of 12-month period commencing from the date of the appointment of the employee provided he or she has not previously been in full-time paid employment.

OTHER CUSTOMS CONCESSIONS

(i) Duty/Customs Concession under Section 10 of the Customs Tariff Act

(a) Specialised equipment and machinery

· Free fiscal duty and import excise duty on specialized Fisheries & Forests equipment and machinery

NOTE: (These concessions are already approved by the Minister for Finance. All they (Importers) need to do is lodge a customs entry for clearance for the goods).

Small and Medium Enterprises

(ii) 100% Income tax exemption to be applicable to selected sectors with maximum turnover threshold of $300,000.

These sectors include:

· Agriculture and Fishing (Sugarcane Farmers, Coconuts, Rice, Ginger, Yaqona, Fishing, Raising Livestock, Vegetables, dalo, cassava and other root crop production, farming and bee keeping).

Miscellaneous

(i) Fiscal and Import Duty Excise Changes for PRIME MOVERS & SPECIALISED MOVING MACHINERY.

(a) Machinery used in the manufacture of goods

· Reduce Fiscal Duty to 0%

(b) New road tractors for semi trailers of heading 8701 and trailers of heading 8716

· Reduce Fiscal Duty from 32% to 5% excluding agricultural tractors, which is 0%

· Include prime-movers and

· Self loading and other trailers for transport of goods

· Reduce Fiscal Duty from 32% to 5%

(d) New Special type of vehicles of heading 8705

· Reduce Fiscal Duty from 32% to 5%

(e) New trucks (goods vehicles) of gross vehicle weight exceeding 3 tonnes

(Note: No need to apply, customs entry to be lodged with Customs and paid)

Industry	Items	Fiscal	VAT(%)
Fishing	1. Automotive Diesel Oil	2 cents/ litre	15
	2. Specialised fishing gear and equipment	Free	15
	3. Fish baits	Free	15
	4. Specialised fishing vessels	Free	15
Approved operators engaged in 100% export	1. Sharks fin	Free	15
	2. Live fish	Free	15
	3. Live corals	Free	15
	4. Food supplementary	Free	15
	5. Fish sauce and fish	Free	15
Prawn industry	1. Prawns larvae and prawn feed	Free	15
	2. Pesticides and fungicides	Free	15
	3. Lime and formalin	Free	15

(Note: Application to be made to Customs, Tariff and Trade Section)

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