Financial Planning in Papua New Guinea: Tax, Investment and Business Guide for HNW Individuals

Introduction

Papua New Guinea (PNG) is the eastern half of the world's second-largest island, occupying the territory east of the Indonesian province of Papua. With a population of approximately 10 million people spread across rugged, remote terrain encompassing some 850 language groups, PNG is one of the most culturally and geographically complex nations on earth.

From a financial planning perspective, PNG is not a conventional residency destination for internationally mobile HNW individuals — the security situation in Port Moresby, limited infrastructure outside major centres, and governance challenges make personal relocation unusual. However, PNG is a resource-rich nation of genuine significance in the global energy, mining, and agriculture sectors, and HNW investors and business owners with Pacific Basin interests need to understand the PNG tax and investment framework.

The PNG LNG project (operated by ExxonMobil, with interests held by Oil Search, Santos, and MRDC) and the forthcoming Papua LNG development (TotalEnergies) have made PNG one of the fastest-growing LNG producers in the Asia-Pacific region. Gold and copper production at the Porgera, Lihir, and Ok Tedi mines places PNG among the significant Pacific mineral producers. Tropical timber and palm oil are established agricultural exports.

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Tax Residency

PNG taxes individuals based on residency. An individual is a resident if they are domiciled in PNG, have a permanent place of abode in PNG, or are present in PNG for 183 days or more in an income year (January to December).

Residents are taxed on worldwide income; non-residents on PNG-source income only. PNG has a double tax treaty network that includes Australia, United Kingdom, Canada, China, Singapore, and several other countries. The UK-PNG treaty provides for reduced withholding rates on dividends, interest, and royalties.

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Income Tax

PNG operates a progressive income tax system (rates indicative 2026 — verify locally):

• Income up to PGK 12,500 per year: 22%
• PGK 12,501 to PGK 20,000: 30%
• PGK 20,001 to PGK 33,000: 35%
• PGK 33,001 to PGK 70,000: 40%
• Above PGK 70,000: 42%

In practice the first PGK 20,000 of income is effectively relieved through a rebate, so low earners pay little or no tax, but the marginal schedule above applies once income rises. A salary and wages tax (SWT) is withheld at source on employment income. The top rate of 42% is significant, and combined with the country's inherent lifestyle challenges, means that PNG residency is typically undertaken by employees on specific resource sector assignments with generous remuneration packages that offset the tax burden.

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Capital Gains

PNG does not levy a general capital gains tax. Gains on the disposal of shares, investment assets, and most property by private individuals are not subject to a specific CGT charge. This is one of the notable features of PNG's tax system from a planning perspective, and applies even for residents — gains from the sale of capital assets are generally outside the income tax base unless they arise from a business of dealing in such assets.

This CGT exemption is broadly consistent with Australian practice prior to 1985 (Australia introduced CGT in 1985 — PNG, which was an Australian administered territory until 1975, has not adopted an equivalent measure).

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Dividend Income and Withholding Tax

Dividends paid by PNG companies are subject to a dividend withholding tax imposed at a flat domestic rate of 15%, which is a final tax for non-residents. PNG's double tax agreements generally cap dividends at 15%; under the UK-PNG treaty, withholding on dividends is capped at 15%.

Interest income received by non-residents from PNG sources is subject to 15% withholding tax, with treaty reductions available.

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Mining and Resource Investment

The PNG Mineral Resources Act and the Oil and Gas Act govern the framework for resource investment. Mining and petroleum projects are structured via development licences, and the state (through MRDC — Mineral Resources Development Corporation) typically acquires participating interests. The fiscal terms for resource projects — royalties, production levies, and additional profits taxes — are negotiated as part of the licence/agreement process.

For HNW investors, indirect exposure to PNG resource production through listed shares (Santos, into which Oil Search merged in 2021; Newmont, which acquired Newcrest in 2023; Barrick Mining and Zijin Mining, the joint-venture owners of the Porgera operator Barrick Niugini; and Harmony Gold, which operates the Hidden Valley mine) is the most practical approach. Direct investment in PNG resource ventures is feasible but requires specialist legal and regulatory advice.

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The Kina and Currency

PNG uses the Papua New Guinean kina (PGK), managed by the Bank of Papua New Guinea. The kina has depreciated gradually against the USD over the past decade — from approximately PGK 3 per USD in 2015 to PGK 3.7-4.0 per USD in 2024. Currency repatriation has historically been subject to foreign exchange queuing and delays, as the central bank has managed outflows in periods of external account pressure.

The Bank of PNG's capacity to manage foreign exchange liquidity has improved with rising LNG export revenues, but currency controls remain a practical consideration for investors seeking to repatriate profits from PNG business activities.

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Security and Practical Living

Port Moresby has significant crime challenges, and most expatriate professionals working in PNG live in secured compounds. The resource sector typically provides security arrangements as part of expatriate employment packages. Outside Port Moresby, infrastructure is limited and road access to many parts of the country is seasonal or non-existent.

This security reality is a defining constraint on PNG as a personal residency destination. It is not a jurisdiction for casual relocation.

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Governance

PNG has maintained parliamentary democracy since independence in 1975, making it one of the more durable democracies in the Pacific island region. However, governance quality — particularly around public service delivery, management of resource revenues, and corruption — is significantly below OECD standards. The Extractive Industries Transparency Initiative (EITI) has been engaged to improve resource revenue transparency, with mixed results.

For investors, PNG-specific political risk insurance products are available through the Multilateral Investment Guarantee Agency (MIGA) and some commercial insurers, which can provide a measure of protection for significant capital commitments.

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Direct Exposure Versus Listed Exposure

Investing directly in a PNG venture and holding a listed company with PNG operations are frequently discussed as though they were the same trade at different sizes. They are not.

Listed exposure gives you a claim on a company that happens to operate in PNG, alongside its operations everywhere else. You obtain daily liquidity, audited accounts prepared to an international standard, a governance framework enforced by the exchange the company is listed on, and the ability to reverse the decision in an afternoon. What you do not obtain is a pure PNG position: the share price will respond principally to the commodity cycle, to the company's global asset base and to its balance sheet, and a PNG-specific development may barely register in it.

Direct exposure is the reverse in every respect. It offers the concentrated PNG outcome, and with it illiquidity, dependence on local counterparties, a governance environment materially below the standards described above, and the currency and repatriation constraints set out in this guide. The gap between the two is not a matter of degree; it is a different investment with a different risk profile, and it requires a correspondingly different level of due diligence and a correspondingly longer time horizon.

For most internationally mobile private investors, the honest conclusion is that PNG is a theme best expressed through listed vehicles, and that direct participation belongs to those with operating expertise in the sector, a local partner they have reason to trust, and capital they can afford to have locked up for an extended period.

The Question to Settle Before Capital Goes In

Currency and repatriation deserve to be treated as the first question rather than the last. As noted above, foreign exchange availability has at times been rationed, and the constraint bears on getting money out rather than on getting it in — which is precisely the wrong way round from an investor's perspective.

Anyone contemplating a PNG commitment should therefore establish, in advance and in writing where possible: how profits or proceeds would be converted and remitted, what the realistic elapsed time has been for comparable transactions recently, what documentation of the original inward investment will be required to support a future outward transfer, and what the position would be if availability tightened again. An investment that cannot answer those questions is not a liquid investment at any price.

The Absence of Capital Gains Tax, and What It Is Actually Worth

A jurisdiction with no general capital gains tax reads as a planning advantage, and for a PNG resident disposing of investment assets it is a real one. Its value to most readers of this guide is smaller than it looks, for three reasons.

The first is that it only helps a PNG tax resident. An investor holding PNG-linked assets from anywhere else is taxed by their own country of residence on the gain, and PNG's treatment of it is simply irrelevant to that assessment.

The second is that becoming a PNG resident in order to capture it is an expensive way to save tax. Residence brings worldwide income into charge on a schedule topping out at 42%, alongside the security, infrastructure and lifestyle constraints described above. Anyone attracted by the gains position should model the income position beside it, because for most people the income cost arrives every year and the gains benefit arrives once.

The third is timing. A gain realised while resident is treated one way and the same gain realised after a change of residence quite another, in both countries. Where a disposal is contemplated around a move in either direction, the sequence matters and it is not intuitive — a question for advisers on both sides before the transaction rather than after it.

The absence of a capital gains tax is therefore best understood as a feature of the package that comes with a PNG posting, rather than as a reason to take one.

Commodity-linked and frontier market investments are volatile and can lose value rapidly. Currency movements can materially change returns independently of the underlying asset. Illiquid holdings may not be realisable when you wish to sell, or at the value you expect. Nothing in this guide is personal advice or a recommendation of any named company or security.

Compliance Caveats

PNG's tax legislation is subject to change by the National Parliament, and the rates and rules in this guide reflect available information as of 2026. Nothing here constitutes legal or tax advice. Security risk is a real and present consideration. Currency risk (PGK/USD) is significant for non-resource sector investment. Investments can fall as well as rise, and resource commodity prices are volatile. Independent advice from a qualified PNG lawyer and tax adviser (PNG-qualified accountants with resource sector experience) and from your UK or home jurisdiction adviser is essential before any investment or employment decision.

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How Global Investments Can Help

Global Investments has over 32 years of experience advising internationally mobile HNW clients on Pacific Basin investment opportunities and the tax and legal structures appropriate for resource sector exposures. We can help you assess whether direct PNG investment or listed resource company exposure better fits your portfolio objectives, structure any holdings in a tax-efficient manner from your home jurisdiction, and provide a realistic assessment of the risk-adjusted case for PNG allocation. Contact our international planning team for a confidential discussion.