Investing in American Samoa
Benefits and Incentives

Background
American Samoa is a U.S. Territory. It is centrally located in the South Pacific with ready access to markets and resources in the U.S., New Zealand, Australia, and the entire Pacific area.

The Stability and Security of Operating on U.S. Soil
American Samoa offers many of the cost advantages of offshore locations while at the same time offering the stability and security of operating on U.S. territory.

Duty Free Access to the U.S.
American Samoa is outside the customs area of the U.S., but it has duty free access to the U.S. through U.S. Tariff provision Headnote 3(a).

Tax Structure
Business tax exemptions can be granted by the Governor of American Samoa for up to 10 years. American Samoa is working hard to reinstate a provision in the U.S. Internal Revenue Code, which exempts from taxation the profits of U.S. corporations earned in American Samoa.

Minimum Wage
The current minimum wage in American Samoa ranges between $2.63 and $4.09 per hour with a majority of industries and workers with minimums under $3.50 per hour. These rates compare with a U.S. national rate of $5.15 per hour.

Industrial Park
The American Samoa Government operates the 100-acre Sen. Daniel Inouye Industrial Park, one of the finest in the Pacific. It is fully served by quality water, electrical power and sewer facilities for all industrial purposes.

Infrastructure
American Samoa has an exceptionally well-developed infrastructure: harbor facilities, international airport, roads, communications, water, sewer, power, education and health care.

Financing
American Samoa offers a full range of business and commercial financial services. The Bank of Hawaii and ANZ Amerika Samoa Bank provide full interna­tional banking services with correspon­dent banks in the U.S. and the Pacific region. Both banks are FDIC approved.

Worker Training Programs
American Samoa's manpower training program includes a subsidized pre-employment-training program for manufacturing and significant employ­ment producing activities.

Education System
The American Samoa Department of Education operates at a level comparable to stateside curriculum and standards. The American Samoa Community College is accredited by U.S. accrediting institutions.

Air and Waterborne Transport
American Samoa is well served by international air and waterborne transport companies.

International Communications
The American Samoa Telecommunication Authority (AS CTA) and privately-owned Blue Sky Communications offer a complete range of modern communications services including state-of-the-art telecommunica­tion systems; satellite network and com­puter support systems; competitive fiber optic networks and mobile phone services throughout the Pacific, rapid telex, tele­
graph and facsimile services; internet service provider systems; and some of the lowest pricing offered anywhere in the Pacific Islands.

Health Care
The centerpiece of American Samoa’s health care system is the LBJ Tropical Medical Center, a 128-bed acute care hospital. The Territorial health infrastruc­ture system consists of this hospital and five primary health centers.

Housing
Western Style Housing at
pleasant locations is readily available in American Samoa.

Leisure Time/Recreation Activities
American Samoa offers workers and residents an incredible range of leisure and recreational activities. There is, of course, the extraordinary access to outdoor activities including hiking, boating, fishing, diving, snorkeling, photography, National Park visitations, and many others.

Trade & Investment Business Opportunities
The American Samoa Government and the local business community are aggressively working on targeted econom­ic development initiatives including elec­tronic commerce and electronic commu­nications; air transportation; health care; aquaculture and local fishing; and tourism.

American Samoa Department of Commerce (DOC)
The American Samoa Department of Commerce (DOC) is the lead agency for economic development and assists prospective investors with permits, licens­es and other business location needs. http:// www.asdoc.info

A message from the Governor

Talofa!

On behalf of all of the people of American Samoa, it is my pleasure to invite you to learn more about our islands. Located in the heart of Polynesia, we’re known for our stunning scenery and the gracious hospitality of the Samoan people, American Samoa is also developing a well-deserved reputation as a great place to do business.

In fact, if you are considering investment opportunities in the region, I can say with confidence that you will find no other group of islands that offers as many competitive advantages as we do in American Samoa. Your investment is protected in a stable and secure U.S. territory. We use the U.S. dollar. Our power and water utilities are among the best in the Pacific. We have outstanding transport facilities, including our international airport, busy commercial seaport and stunning deep-draft harbor.

Telecommunications services are among the most sophisticated and cost-effective of any Pacific locale. And we have exciting business opportunities, par­ticularly for the investor looking to our young visitor industry.

We have provided in this special publication details on our islands, and what we can offer your business. As you consider the possibilities, I want you to also know that as an investor you will have the full support and cooperation of our Government. Investors are welcomed in American Samoa, and we would love to show you how we can make you and your business a part of our special islands.

Sincerely yours,
TOGIOLA T. A. TULAFONO
Governor

Islands Of Opportunity

Strategic Location and
Economic Attributes Boost American Samoa

When investors look at the Pacific Islands, American Samoa stands apart from other potential investment venues. It enjoys a combination of competitive advantages unmatched by any other nation or territory in Oceania. And it offers the appeal of a strong culture that gives the islands of American Samoa a community foundation and sense of stability that few others come close to matching.

Among American Samoa’s competitive advantages is the fact that it is politically stable and has been a U.S. territory since 1900. Its legal system is based on U.S. law. It is a U.S. dollar-denomi­nated territory. It has some of the best telecommunications, power and water utilities and transport facilities in the Pacific. Two major financial institutions, ANZ Amerika Samoa Bank and Bank of Hawaii, provide a full range of business banking services. And its minimum wage is lower than any other U.S. possession in the Pacific.

Centrally located in the heart of the South Pacific, American Samoa is visited frequently and regularly by scheduled cargo vessels and air cargo carriers. And being on the U.S. West Coast-Australia shipping routes allows ready access to markets and resources in the continental U.S., New Zealand and Australia, as well as the neighbor­ing Pacific Island nations of Samoa, Tonga and Fiji. American Samoa also has direct access to Hawaii.

Ceded to America by its chiefs in the late 19th century, American Samoa has been a U.S. territory since April 17, 1900. It was governed from 1900 by the U.S. Navy until 1951 when the governing authority was transferred by presidential executive order to the U.S. Department of the Interior, which continues to oversee the federal government’s insular affairs.

American Samoa has its own Constitution, which is modeled after the U.S. Constitution. The territory’s constitution permits two forms of government—territorial and cultural (local). An elected governor heads the terri­torial government, which considers the U.S. President as its Head of State. The governor selects three district governors to head the local government under the auspices and jurisdiction of the territorial Office of Samoan Affairs. American Samoans are U.S. nationals, a status that gives them the full rights and privileges of U.S. citizens, except that they cannot vote for the presi­dent of the United States.

V/hen considering possible Pacific Islands venues, an investor should factor in the following advantages for American Samoa:

Duty Free Access To The U.S.

General Headnote 3(a)
Tariff treatment of imports from the U.S. insular areas into the United States is governed by the General Note 3(a)(iv) of the Harmonized Tariff Schedule, which extends duty-free treatment to the prod­ucts of U.S. insular areas. Eligible U.S. insular areas are American Samoa, the U.S. Virgin Islands, Guam, , and the Commonwealth of the Northern Mariana Islands.

Virtually all products are eligible for entry under General Note 3(a)(iv). (Watches are provided duty-free treatment under Schedule 7, Support E, Headnote 6 of the Tariff Schedules.) Eligible products must satisfy cer­tain foreign content criteria in order to qualify for duty-free treatment. However, no product may contain foreign materials in excess of 70 percent of its total appraised value.

Additionally, certain products which are excluded from preferential treatment under the Caribbean Basin Initiative (such as textile and apparel articles, footwear and petroleum products) may not contain foreign materi­als in excess of 50 percent of the total appraised value.

All products must satisfy certain rules of origin in order to qualify for duty-free treatment. A product of an insular area must be manufactured or produced in an insular area, either wholly from insular area materials or from imported materials, which are substantially trans­formed in the insular area. A substantial transformation occurs when a new and different article is produced, having a distinctive name, character, and use. Specific rules of origin are applicable to some garments. A certifi­cate of origin must accompany entry of all products under General Note 3(a)(iv). U.S. insular areas are not subject to the U.S. textile quota program.

Security Being Part Of The U.S.

The U.S. government is a major presence in American Samoa and has been since 1900. Because of that relationship, American Samoa has a government system that mirrors the U.S. Constitution and its three divisions of government— executive, legislative and judicial. It also has a public education system that is patterned after the American system.

There are at least 16 U.S. federal government departments and agencies with staff and major programs active in the Territory. They include: the Federal Aviation Administration; Federal Bureau of Investigation; Department of Agriculture; National Marine Fisheries Services; National Weather Service; Department of the Interior, Office of Insular and Territorial Affairs; Social Security Administration; U.S. Army Reserve and U.S. Post Exchange; Department of Commerce; U.S. Coast Guard; National Fisheries Service; National Parks Service; and, the U.S. Postal Service.

Additionally, major federal sup­port is received by both the American Samoa Community College and the Territory’s LBJ Tropical Medical Center, the heart of the American Samoa Medical Center Authority. Indeed, federal funding is a critical element in the American Samoan economy. It provides a stable foundation for the on-going develop­ment of the Territory’s private sector, and reflects the importance of American Samoa as the southernmost U.S. possession. Major funding led to a significant expansion of the U.S. Army Reserve’s base, located near the Pago Pago International Airport in Tafuna Village.

The warrior tradition is a strong element of the Samoan culture. This tradition is currently exemplified by the outstanding service that many American Samoan men and women have performed while serving in uni­form. Beginning in the 1970s, large numbers of American Samoans began serving in the U.S. armed forces. Many of them, upon retirement, return to American Samoa to pursue productive goals reflecting their higher education and training.

The American Samoan U.S. Army Reserve contin­gent reports to the U.S. Army Reserve in Hawaii (as do similar Army Reserve units in Guam and the Commonwealth of the Northern Mariana Islands). These are not just weekend warriors. Beginning in 2004, the American Samoa Army reservists were activated for duty in Iraq, along with their fellow reservists from Guam, Saipan and Hawaii.

Tax Structure & Concessions

The American Samoa Government has the same income tax structure as the U.S. with a few minor exceptions: there is a minimum 4 percent tax rate on personal income; 34 percent tax rate on the taxable income that exceeds $75,000 but does not exceed $650,000, and the highest tax bracket is 44 percent of taxable income that exceeds $650,000.

There is a 5 percent excise tax on items imported for commercial resale. There are no gross receipt, prop­erty, or sale taxes in American Samoa.

Moreover, tax exemptions can be granted by the Governor of American Samoa on some or all taxes (except for individual income taxes) for up to 10 years for the establishment or expansion of qualifying industrial or business enterprises under the Industrial Incentives Act. Corporations established in the Territory may receive an 11-year exemption on corporate income taxes, dividend distributions, customs duties and other taxes.

There are no requirements to maintain an office or agent or to hold shareholders meetings in the Territory.

Minimum Wage

Amencan Samoa is covered by the U S Fair Labor Standards Act. Minimum wages are set every two years after a U.S. Department of Labor Minimum Wage Hearing held in the Territory. The cur­rently minimum wages range between $2.63 and $4.09 per hour. The U.S. national minimum wage is $5.15 per hour.

American Samoa has approximately 16 different minimum wage classifications. All employers are required to provide Worker’s Compensation insurance against work connected injuries or death and must comply with the provisions of the U.S. Occupational Safety and Health Act, which regulate working conditions pertaining to the health and safety of employees.

The U.S. National Labor Relations Board has extended its jurisdiction to American Samoa, making it possible for U.S. unions to expand into American Samoa. However, labor unions have not been established in the Territory.

Inouye Industrial Park

The American Samoa Government, through its Real Property Management Board, operates the 100-acre Sen. Daniel Inouye Industrial Park in Tafuna Village. A 12-inch water main serves the area and electrical power is available for all industrial purposes. The Industrial Park is fully drained and connected to a sewage treatment plant. Lots are available for up to 55 years at a rate of $0.25 to $0.45 per square foot per year.

Infrastructure

American Samoa has an exceptionally well-developed infrastructure: harbor facilities, international airport, sealed roads, telecommuni­cations, water, sewer, power, education and hospital.

Pago Pago Harbor is one of the finest all weather, deep draft harbors in the Pacific. It has a total water sufface area of two square miles, and depths range from 40-160 feet throughout the inner harbor. The main dock is 1,000 feet long, handling ships of up to a 32-foot draft.

Pago Pago Harbor provides the full complement of equipment and facilities, and has a ship-repair facility with a 3,000-ton marine railway. The port provides full service port facilities: containerized cargo holding, ware­housing, transshipment operations and tugboat services.

Beyond the basics of reliable power and utilities; good roads; a broad transportation network; and, attractive telecommunications pricing, American Samoa has the additional benefit of a mature private sector, which offers a wide range of goods and services.
The American Samoa Power Authority, a govern­ment-owned entity, is one of the most reliable electric utilities in the Pacific Islands. It also provides water, wastewater and solid waste management services. It is capable of providing enough electrical power to enable economic development in American Samoa.

Banking Services

American Samoa offers a full range of business financial services. Long-term and working capital loans are available to eligible enterprises through various business financial assistance programs adminis­tered by the U.S. Small Business Administration at the Honolulu District Office. These credit programs include both direct loans and loan guarantees.
The American Samoa Government is authorized to issue tax exempt industrial revenue bonds to provide financing for acquisition of fixed assets for approved industrial projects.

The Bank of Hawaii and ANZ Amerika Samoa Bank provide full business banking services, and offer international banking through correspondent banks in the U.S. and the Pacific region.

Both banks are FDIC approved. The Bank of Hawaii, the second largest financial institution in Hawaii, has significant Pacific experience. ANZ Amerika Samoa Bank, a unit of the huge ANZ banking group of Australia, is a major financial institution in the South Pacific.

The two banks provide full retail banking services, and offer a broad range of international banking products using their own or correspondent banks in the United States, Australia and New Zealand, and other Pacific Islands. Both banks handle U.S. dollar transactions in addition to offering, among other things, direct-deposit and ATM convenience, electronic and check-card banking for businesses, and cash management services.

The Development Bank of American Samoa is a government-owned institution which offers busi­ness development loans which could be useful to outside investors for joint ventures with American Samoan partners.

Worker Training Programs

The American Samoa Government’s manpower training program includes a subsidized pre-employment-training program for manufac­turing and significant employment producing activities.

Under the Work Force Investment Act, the government supplements 50 percent of workers’ wages for up to one year.

American Samoa Community College offers post secondary training in American Samoa in many occupa­tions important to business development. ASCC offers Associate of Arts and Associate of Science degrees, as well as certificate programs in a variety of academic and technical areas including Agriculture and Life Science, Art! Music and Drama, Business College and Life Planning, Criminal Justice, Education, English Language. Institute of Health and Human Services, Languages and Literature, Mathematics, Nursing, Physical Education, Reserve Officers Training Corps (ROTC), Samoan Language and Culture, Science, Social Sciences, and Trades and Technology.

American Samoa Department of Commerce

The American Samoa Department of Commerce (DOC) is the Territory’s lead agency for economic development and assisting prospective investors. It can help (1) filing for appropriate incorporation permits (local incorpo­ration and foreign incorporation permits);  (2) filing for applications to American Samoa Immigration Board for permits for specialized foreign labor requirements; (3) filing applications to the Real Property Management Board for space at the Industrial Park; (4) filing applications for tax exemp­tion with the Tax Exemption Board; (5) filing with the Department of Commerce for all necessary license and permit applications, (6) and filing with DOC for land use permits and Department of Public Woks for building permits.

Customs and Immigration

American Samoa is outside the customs and immigration authority of the United States of America. Therefore, the Territory operates its own customs and immigration systems.

Education System

The American Samoa Department of Education (DOE) has 23 elementary schools and five secondary high schools, one of which is a poly-technical school. The DOE also offers early child­hood education, vocational education, and special education programs.
The DOE is committed to the concept and practice of individualized instruction fostering each learner’s rights, needs, and aspirations.

The Department is obligated to preserve the cultural heritage and to foster the economic development of the territory. Inherent in this commitment is preparing individuals to become productive and contributing members of society.

The DOE’s stateside education program is designed to meet the educational needs of our children and is taught at a level comparable to stateside curricu­lum and standards. Professional development for staff and administrators alike are ongoing programs to enhance instruction in our schools. Also included in the Territory’s public education program are instructional support service curriculum, instruction and accountabili­ty, library services, drug free programs, student trans­portation services, school community partnership, TV and public information, scholarship financial aid, parent teacher association, etc. There are also several high-quality private elementary and secondary schools in American Samoa.

The American Samoa Community College (ASCC) is accredited by the Accrediting Commission of Community and Junior Colleges of the Western Association of Schools and Colleges (WASC). The American Samoa Community College was established in 1970 to provide post-secondary education opportunities in the liberal arts, teacher training, vocational-technical education and general education to the residents of American Samoa.

Housing

There are a number of well-appointed Western-style homes available for lease in American Samoa. Neighborhoods range from small coastal communities, where the sound of the ocean breaking on the fringing reef is a constant, to custom homes with large yards and private swimming pools.

Transportation

American Samoa is well-served by the interna­tional transport companies. There are several cargo-carrier lines—including Hamburg Sud (formerly Columbus Lines) whose ships have served the South Pacific since 1957 and now sail regularly to and from the U.S. West Coast (San Francisco and Long Beach), to and from Honolulu, Pago Pago, Papeete (Tahiti), Apia (Samoa), Nuku’alofa (Tonga), and Suva (Fiji). Shipping services also include Polynesian Shipping Lines, local agent for several shipping lines and other cargo services, Harbor Maritime & Stevedoring Company, which represents New Zealand Pacific Container Line and Australia Pacific Container Line. American Samoa is also served by steamship agents Samoa Pacific Shipping, Inc. and the PM&O Line, which sails regularly between the U.S. West Coast and points in Polynesia and Micronesia and Asia. Summit Cargo and Fax Cargo Service each provides both air and sea cargo services.

Air cargo originating on the U.S. West Coast can transship through Honolulu, Hawaii to American Samoa via Hawaiian Airlines, which operates convenient sched­uled non-stop service. There is a regular air cargo flight that originates on the U.S. mainland once a week for sev­eral stops in the South Pacific including American Samoa. Additionally, Air New Zealand regularly stops in transit on a weekly basis in Apia, Samoa between Los Angeles and Auckland, New Zealand. Cargo out of Los Angeles or Auckland could be transshipped to American Samoa via Apia.
A helicopter service, Manulele Aviation, now offers flights around American Samoa, and can service neighboring Samoa, too. Manulele is able to provide flights for everything from sightseeing to geological work to med­ical evacuations.

Within American Samoa, the Manu’a Islands are served by both scheduled flights and ferry services. These regular transportation links are important as they provide the opportunity for appropriate tourism development on these beautiful and largely untouched islands.

Communications Telecommunications

American Samoa has some of the best telecom­munications services in the region. It is served by the government’s American Samoa Telecommunications Authority (ASTCA), and the private Blue Sky Communications, whose local management shares ownership with a major U.S. investment group. ASTCA and Blue Sky offer businesses a full range of services and competitive pricing.

American Samoa’s good telecommunications is a significant advantage to the investor. One of the greatest challenges to an investor in the region is the enormous distances between metropolitan nations and the Pacific Islands. American Samoa’s First World level of telecom services gives a business executive the opportunity to stay in contact with suppliers, customers and other offices with ease. It also gives an executive significant advantage over competitors based elsewhere in the region.

American Samoa is now a member of the U.S. domestic phone zone with a U.S. area code rather than an international code. Among other things, this designa­tion allows for lower long-distance calling rates and the greater availability of access to toll-free calling.

The Territorial government is currently exploring the possibility of having American Samoa linked to the trans-Pacific Southern Cross fiber optic cable, which links Australia and the United States via Fiji and Hawaii.

Health Care

The centerpiece of American Samoa’s health care system is the LBJ Tropical Medical Center. The Territory’s health infrastructure system con­sists of this hospital and five primary outpatient health care centers. The 2006 health professional workforce included 49 physicians—comprised of American board-certified doctors and non-U.S. board-certified graduates of the Fiji School of Medicine and foreign-trained doc­tors—IS dentists, one pharmacist, 127 nurses, one mid­wife, 98 other nursing/auxiliary staff, 46 paramedical per­sonnel, and 13 other health personnel.

The sole hospital in the Territory, the LBJ Tropical Medical Center, is a 128-bed acute care facility. It is man­aged by a governing board whose membership is desig­nated by the governor and which is subject to U.S. gov­ernment rules and regulations. It provides a full scope of general inpatient and outpatient services covering: medi­cine, surgery, obstetrics and gynecology, ear, nose and throat, eye, pediatrics, mental health and renal dialysis.

Training of nurses takes place locally and through on-line education. The educational requirement for obtaining a nursing license by the local licensing Board in American Samoa is equivalent to that required in the United States. Newly-acquired telecommunications capability at the LBJ Tropical Medical Center provides additional opportunities for distance learning through the telemedicine system housed in that facility.

The hospital generates financial resources from user fees, government appropriations, Medicaid grant and Medicare billing for the End-Stage Renal Disease (ESRD) Program. The annual health budget equals at least 10 percent of the Territory’s total annual budget.

Pharmaceuticals and vaccines are purchased from the United States. U.S. Federal Drug Administration reg­ulations prevent the Territory from purchasing pharma­ceuticals from foreign sources.

Leisure Time/Recreation Activities

American Samoa offers workers and resi­dents a broad range of leisure and recreational activities. There is, of course, the extraordinary access to outdoor activities including hiking, boating, sports fishing, diving, snorkeling, golf, tennis, national park visitations, and many oth­ers. There is also an extended range of other areas of interest in the histories and cultures of Samoa and other Pacific Islands. There is the full range of social organizations from Parent-Teacher Associations to Chamber of Commerce pursuits and a multitude of church-affiliated organizations.

Trade & Investment Business Opportunities

The American Samoa Government and the local business community are aggressively working on the implemen­tation of economic development initiatives. The Economic Development Implementation Plan contains key initiatives in involving the business community; insuring that capital investment decisions encourage target­ed business development; reducing dependence on federal financial assistance; and encouraging growth and diversification of existing business­es and seeking new investment especially in:

1. Electronic commerce and electronic communications (e.g. closed-caption training, medical records transcription, television and cable production, call centers).
2. Air transportation (e.g. supply center and drop shipping).
3. Health care (e.g. regional treatment center for x-ray and other diagnostic services, renal treatment center, med­ical tourism).
4. Aquaculture and local fishing resources (e.g. shipments of live and fresh catch).
5. Diversified, local agriculture (e.g. hydroponics cultivation).
6. Tourism

We would entertain any business development proposal which would benefit investors and the people of American Samoa.  There are many development possibilities including golf courses, ecotourism, hotel and time­share accommodations, tramway con­struction, shipyard and boat repair activities, and many other opportuni­ties for the production of goods and services in American Samoa.

American Samoa is a Pacific port of call for the Queen Elizabeth 2, as well as her sister liner, the Queen Mary 2. The port calls are a reminder of American Samoa’s international visitor appeal.

Situated about 70 miles east of Tutuila, the Manu’a Islands—Ofu, Olosega and Ta’u—as a group, are a large untapped resource for tourism and eco­tourism development. It contains a world-class tropical beach and marine reserve, has spectacular natural beau­ty, and can be made accessible for careful sustainable development. Three main investment opportunities exist for potential development among the three Manu’a Islands.

1. Developing and setting up an 18-hole golf course in the village of Ta'u, which would include a club­house, a restaurant, a cocktail lounge, shops and various tourist amenities.
2. Developing and setting up a bed-and-breakfast inn in the village of Faleasao to cater to the needs of local and international visitors and golfers.
3. Developing and setting up time-share accommo­dations in the village of Fitiuta.

The Manu’a Islands are also identified as village sites for eco-tourism development to complement the expansion of the National Park of American Samoa. Development packages may involve the creation of cul­tural eco-tourism products, such as village attraction sites, beach fales, and adventure tours through the Park and handicraft production for possible export.

The Pago Pago Harbor Tramway is a cable car operation that crosses high over the harbor from one mountain site to another. It is a historical and cultural attraction that is in urgent need of revitalixation. Once restored, the tramway can become a major gateway into the Tutuila portion of the National Park of American Samoa. Another investment opportunity available would be to develop and set up a restaurant accessible by road and tramway and overlooks the Pago Pago Harbor.

Other development opportunities include upgrad­ing an existing boat repair and maintenance facility (Marine Railway) to provide cleaning, painting and repair services to small or large fishing and commercial sea-going vessels. A related project is development of a small boat marina in the inner harbor of Pago Pago Harbor. The marina project would include, among other developments, a small pier and 68 large berthing slips and shore facilities for the common use of visiting boaters.

Finally, there is opportunity for an investor to redevelop the historic Rainmaker Hotel into a condo­minium and time share project. This once premier hotel has unsurpassed views of Pago Pago Harbor.