Timor-Leste’s is in its transformation into a fair, prosperous and self-sufficient nation, aim to build a modern and diversified economy burgeoned by a healthy, educated, secure and medium-high income-earning population by 2030.
Timor-Leste is establishing itself as a preferred destination for foreign investment, characterized by a fair and favorable business environment and one of the most attractive tax systems for business in the world.
Timor-Leste is one of the eleven sovereign nations of Southeast Asia. The country shares a land border with Indonesia and is located some 500km to the northwest of the Northern Territory of Australia, across
the Timor Sea. The territory of Timor-Leste comprises the eastern part of the island of Timor, the enclave of Oecusse (in the western part of the same island) and the islands of Ataúro and Jaco..
Strategic National Development Plan
Since 2011, a Strategic National Development Plan has been guiding Timor-Leste’s transformation into a fair, prosperous and self-sufficient nation, with an aim to, by 2030, build a modern and diversified economy burgeoned by a healthy, educated, secure and medium-high income-earning population.
The VI Constitutional Government implemented an economic reform program, entitled the Guide for Economic Development Reform (GRFE) 2015-2017. The reform program combined cross-cutting actions to strengthen the business environment with actions to develop the priority sectors of agriculture, fisheries, tourism, manufacturing and oil and gas.
The cross-cutting actions included reform to land and property regulation; economic infrastructure; labour regulation and development of the workforce; reform of the business environment; tax reform; reform of the private investment regime; and private sector development.
The achievements of the reform program included:
- Approval of new policies for tourism and civil aviation;
- Sectoral development plans in coffee and forestry;
- Establishment of a Credit Guarantee Scheme for SMEs;
- Strengthening of Timor-Leste’s approach to investment promotion through revision to the Private Investment
Law and the re-establishment of TradeInvest;
- Approval of new legislation including the package of Land Laws; Consumer Protection Law; Law on
Protected Areas; Private Investment Law; Law on Commercial Companies; Regime for Commercial Registry;
- Approval of the National Employment Strategy.
Timor-Leste is a full-fledged member of the Community of Portuguese Speaking Countries (CPLP), enabling access to a market of more than 250 million consumers in three continents, for which more than 50 million are upper middle income.
The country has applied for accession to ASEAN (the Association of Southeast Asian Nations) in 2011. Ongoing investments and reforms are paving the way for a closer integration in the coming years.
Timor-Leste applied for accession to the World Trade Organization (WTO) in April 2015. At the meeting of the General Council on 7 December 2016, WTO members considered the application for WTO accession of Timor-Leste, and established the Working Party on the accession of Timor-Leste). Timor-Leste assigns priority to WTO membership, as it would help to leverage the on-going improvements in its infrastructure, human capital, and administrative capacity, to accelerate growth and economic diversification.
Timor-leste’s corporate income tax – 10% is the lowest in Southeast Asia. This further enhances by negotiable tax incentives for large projects, which may further improve business models.
Macro Economic Indicators
GDP 2015 : US$ 3,956 million
GDP per capita : US$ 3,330 (estimated 2015)
Real growth rate : 6,8% (estimated 2015)
Economic structure :
• Petroleum and gas 73%
• Public Administration 6%
• Agriculture 5%; Civil Construction 5%; Comerce 5%
• Real Estate 2%; Communication and Information 2%
• Manufacture Industry • Financial Activity • Various Services 1%
Export 2014 : US$ 23.0 M
Import 2014 : US$ 554.0 M
Inflation rate 2014 : 1%
Unemployment rate : 6,7%
Minimum Salary : US$ 115