Tonga

Starting a Business in

Tonga

Below is a detailed summary of the bureaucratic and legal hurdles faced by entrepreneurs wishing to incorporate and register a new firm in Tonga. It examines the procedures, time and cost involved in launching a commercial or industrial firm with up to 50 employees and start-up capital of 10 times the economy's per-capita gross national income.

This information was collected as part of the Doing Business project, which measures and compares regulations relevant to the life cycle of a small- to medium-sized domestic business in 185 economies. The most recent round of data collection was completed in June 2012.

Compare Tonga to 184 other economies.

  • Standardized Company

  • Legal Form: Private limited company
  • Paid in Minimum Capital Requirement: None
  • City: Nuku'alofa

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No. Procedure Time to Complete Associated Costs
1 Check the uniqueness of the proposed company name and reserve a name.

Section 24 of Companies Act 1995 prohibits the Registrar of Companies from registering a company name unless it has been reserved. According to common practice, founders submit the name registration together with the company incorporation application; however, if the name is rejected, the company would resubmit. Company names with the words “Tonga,” “Tongan,” or “Royal” are subject to prior written approval by the Privy Council. A name reservation is valid for 30 working days from the date stated in the reservation notice.
2 days TOP 80
2 Register the company with the Companies Office; obtain a certificate of incorporation

To incorporate a company, founders must file form Nos. 1–5, as follows:

• Application for incorporation.
• Certification of adequate liquidity.
• Certification and consents of directors and company secretaries.
• Consents of shareholders.
• Notice of company name reservation (from the Registrar).
• The company constitution (two original copies).

The forms are available at the Companies Office reporting to the Ministry of Labor, Commerce and Industry, but also acceptable are photocopies from the regulations, found in the First Schedule to the Companies Regulations 1999. Upon receiving a completed application, the Registrar signs and issues the certificate of incorporation. Foreign compagnies need a "Foreign investment registration certificate", issued by the Ministry of Labor, Commerce and Industries.
3 days TOP 400
3 Obtain a business license from Ministry of Labor, Commerce, and Industry

All business must obtain a business or trading license, but prior requirements vary from industry to industry. Prior requirements are the same for all industries, except fishing, liquor and tourism. In some cases, prior permits from other ministries must be obtained (this may involve inspections) also an inspection might be done to verify that the business has an office. For example, for retail activities, companies must first obtain a permit by the Health Department, which also conducts an inspection. The official timeline for processing the license application is 7 working days.
7 days TOP 120
4 Register Consumption tax for income tax and consumption tax with the Internal Revenue Commission

A locally incorporated company must file for registration for consumption tax with the Taxation department with the Taxation Department. The same tax number obtained will be used to file the income tax. Registration for Consumption Tax (the equivalent of Australian or New Zealand Goods and services tax (GST) is voluntary if turnover is less than TOP 100,000 a year; otherwise, registration is compulsory.
3-4 days no charge
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