Starting a Business in Pacific Paradise? Tips and Pitfalls

July 5, 2011 10:32 PM

I'm looking for guides, honest accounts and balanced sober economic plans, proposals, checklists etc on the realities of starting a small business in a South Pacific Island Country (think Fiji, Vanuatu, etc) as an American.

I'm in Fiji and my impression is that starting a small business (mostly remotely run) in a climate such as this is quite doable with only modest (by American Standers) start up capital. I'm thinking something like a small variety import/export shop or a small cafe.

What intrigues me is the utter "wild west" feeling of it here, not like the stilted business atmosphere in America. I'm not thinking of building a corporate / business empire, but just a solid profitable business that is fun and exciting, gives me an excuse to travel to paradise regularly, a reason to meet and network with the locals and maybe do some good.

But while I think I know a bit more than the average bear about micro and macro economic theory, I am certainly not a business person. My thoughts are based on a gut feeling and conversations with some locals and western business owners and just sizing the situation up for myself. I have some start up capital at my disposal and am at a point in my life (rather young) that I could jump into something like this without too much risk of not being able to recoup a total loss later on through returning to more "traditional" employment.

So point me in the direction of some somber analysis of the possible upshots and pitfalls of foreign owned, (mostly) remotely managed small businesses in a Pacific Island nation, as an American.

Thanks Hive Mind

posted by DetonatedManiac to Work & Money (5 answers total)

The magazine Islands Business would be a good start. While there's not as much analysis of small business issues, there is alot of macro-level analysis of the business environment, and could give you a good idea of the kind of issues you might face.

Also, does it matter whether it's "as an American"? You might find it easier to find Australian and New Zealand resources for this kind of thing.
posted by ryanbryan at 1:21 AM on July 6, 2011

"Wild West" is one way of putting it. For one thing, Fiji's a military dictatorship with a historically hostile relationship to outspoken foreign-born businesspeople. If you annoy the wrong people you may find yourself in more interesting legal waters than you would in a country with more independent courts.
posted by Fiasco da Gama at 1:56 AM on July 6, 2011

Response by poster: Let me clarify about the "as an american" thing:

what Fiasco says is what I want to know about, how do I identify and stay away from the danger zone on those governmental and political issues since I am an American Citizen and don't plan on changing that. Also, I need some "non-BS", "non-spun", solid economic analysis that cuts through the BS so I end up making money at the end of the day when I do my taxes in the USA.

But where the info comes from I don't care, just that I don't fully trust whats in the Fiji papers or Fiji government website. Everyone says that they turn little issues into big ones in the papers, I guess as part of a population control method or something.

As far as the military dictatorship, that is a feature not a bug. I'm not saying I want to be a dissident or activist (except maybe for the environment, which is in the Fijian's enlightened self interest to protect for cultural/tourist reasons) but I do think that having some power to protect people in a place where some people may eventually come to harm is a moral duty. See the movie "Schindlers List".

But in my own self interst, barring the worst case (which from what I hear, all the coups were bloodless because their only growth industry is tourism and blood scares the tourists away... and any business I open would likely be servicing (at least partly) tourists... so even the worst case is not personally that horrible for me) I just want to make enough to live, maybe buy a sailboat and sail to some of the islands in the area. I hear they have a big one called Auzzyland or something sorta south west ;)
posted by DetonatedManiac at 12:53 AM on July 8, 2011

Still, this is not specific to the US or being American. The Fijian government doesn't like anyone meddling in their affairs, whether they be from the US, Australia, Vanuatu or wherever. As long as you stay away from businesses that have anything to do with the media, or commenting publically on issues to do with the Fijian goverment, you will have no problems. This is not unique to Fiji either.

Getting back onto the topic, try Austrade.
posted by ryanbryan at 7:47 PM on July 8, 2011

Best answer: As researcher who has worked in Fiji, I would say from my experience that Fiji is not really as politically unstable as it might seem and definitely not as bad as the Aus and NZ media portray it. The Fijian government has shown little interest in interfering with private industry outside of the media sector (and a few mega-companies). I would not be concerned with the actions of the Fijian government having any direct effect upon your small business. With that said, Fiji though is an extremely tourist driven economy. Decreased tourism and poor relations with other countries in the region have had a real serious effects upon many sectors of the economy, even ones that you would not expect. This rather then direct governmental action should be your primary concern. Croz Walsh is a retired USP professor, who's writing is generally fairly balanced about the situation in Fiji. I would highly recommend his blog for a view that is not as spun as the government and the media, but still fairly critical.

On the nuts and bolts side of things, Fiji does have some unique foreign investment rules. There are a number of activities that can not be engaged in by non-Fijians, without Fijian partners or that require very large cash reserves. Non-restricted businesses require at least $250,000FJD ($142,500) cash to invest. The steps for starting a business can be found at the World Bank's Starting a Business in Fiji page. Westpac (a bank) also has some hints (PDF). There are also some oddities with regards to land ownership that you will need to become familiar with as well.

The most through analysis of the Fijian economic situation I have seen is by the Asian Development Bank htttp://www.adb.org/Documents/Reports/PSA/FiJ/Fijiislands.pdf . Unfortunately it is about five years old and is pre-coup. The magazine Islands Business as ryanbryan suggested is a great resource for more recent less in-depth data. I am a social scientist, so I am not overly familiar with the economic literature, but if there is something specific you are seeking I can probably track it down.

I would strongly recommend against remotely running a business in the South Pacific. It can be extremely challenging to find people able to run your business with you away. Business culture in the region strongly favours bosses who are present over remote operators. I am yet to see it work well in the hospitality sector where it is common. Owners frequently complain about things not happening and a lack of communication from their workers. Fiji has a much more relaxed style of business than most Americans are used too.

Fiji is a wonderful place to live, though you will need to get used to its many differences from the United States. It is not all paradise, but if you go in with realistic expectations, it can be great. Feel free to message me if you have any more specific questions about what life is like in Fiji.
posted by cspurrier at 7:42 PM on July 10, 2011