Table of Contents
- 1. Executive Summary: Why Papua New Guinea in 2025?
- 2. Economic Overview & Key Statistics (2025)
- 3. Priority Investment Sectors: Mining, Energy, and Beyond
- 4. Infrastructure & Connectivity: Current Status and Future Projects
- 5. Legal and Tax Framework for Foreign Investors
- 6. Regulatory and Compliance Landscape
- 7. Navigating Risks: Political, Environmental, and Market Considerations
- 8. Local Partnerships, Labor, and Cultural Insights
- 9. Case Studies: Success Stories and Lessons Learned
- 10. Outlook 2025–2030: Opportunities, Challenges, and Strategic Recommendations
- Sources & References
1. Executive Summary: Why Papua New Guinea in 2025?
Papua New Guinea (PNG) presents a compelling opportunity for investors in 2025, underpinned by its vast natural resources, ongoing economic reforms, and strategic positioning in the Asia-Pacific region. The country is endowed with significant reserves of gold, copper, oil, gas, and an abundance of agricultural and fisheries resources. In recent years, the government has prioritized stabilization and transparency, aiming to attract both domestic and foreign investment to diversify the economy and promote sustainable development.
PNG’s economic outlook for 2025 is cautiously optimistic, with GDP growth projected in the range of 4% to 5%, driven largely by resource extraction projects and a rebound in non-mineral sectors such as agriculture and fisheries. The government’s 2024 Budget Strategy Paper highlights a commitment to fiscal discipline, investment in infrastructure, and public sector reform, all of which are intended to improve the investment climate.
On the legal and regulatory front, PNG has enacted key reforms to strengthen investor confidence. The Investment Promotion Authority (IPA) continues to streamline business registration and licensing processes, while the Internal Revenue Commission (IRC) has implemented new tax administration measures and digital systems to ensure greater compliance and transparency. The government is also progressing updates to the Companies Act and related legislation to align with international best practices.
Foreign direct investment (FDI) remains a significant component of PNG’s economic strategy. The latest available statistics from the Bank of Papua New Guinea indicate that FDI inflows are concentrated in mining, petroleum, and construction, but there is growing interest in renewable energy, agribusiness, and infrastructure. The government’s Department of Finance and National Planning has set targets for expanding the role of private capital and public-private partnerships in national development.
- Key compliance areas for investors include adherence to local content requirements, environmental and social impact regulations, and stringent anti-corruption laws.
- The PNG Independent Commission Against Corruption (ICAC) became operational in 2024, further strengthening governance and enforcement frameworks relevant to investors.
- PNG is a member of the Asia-Pacific Economic Cooperation (APEC) and the World Trade Organization (WTO), providing access to regional and global markets under established trade agreements.
In summary, Papua New Guinea in 2025 offers investors a landscape marked by resource wealth, progressive reforms, and improving governance. While risks remain—particularly in areas of legal enforcement and infrastructure—ongoing reforms and macroeconomic stability indicate a positive trajectory for investment in the coming years.
2. Economic Overview & Key Statistics (2025)
Papua New Guinea (PNG) offers a complex yet promising economic landscape for investors in 2025. The country’s economy is largely driven by its vast natural resources, particularly in the mining, oil, and gas sectors, which collectively account for over 80% of export revenues. According to the Bank of Papua New Guinea, the nation’s GDP growth is projected at approximately 4.6% for 2025, bolstered by resumed operations at key extractive projects and increased foreign direct investment (FDI). Inflation is forecast to remain moderate, at around 5%, though it is subject to fluctuations in global commodity prices.
The economic rebound in 2025 is underpinned by several significant developments. The reopening and expansion of the Porgera gold mine and the Papua LNG project have catalyzed renewed investor interest. The Department of Treasury projects that extractive sector output will increase by over 10% compared to 2024, with positive spillovers expected in construction, services, and transport.
In terms of regulatory environment, PNG has undertaken notable reforms to enhance investment security and compliance. The Investment Promotion Act was amended in 2023, streamlining business registration and clarifying sectors subject to foreign investment restrictions. The Investment Promotion Authority now operates a single-window platform for business licensing, reducing bureaucratic delays and improving transparency for both local and international investors.
Compliance with anti-money laundering (AML) and counter-terrorism financing (CTF) laws remains a priority. The Financial Analysis and Supervision Unit enforces robust reporting requirements and monitors cross-border transactions to align with international standards. Investors are advised to ensure strict compliance with these regulations to avoid penalties or operational disruptions.
Key statistics for 2025 reveal a population exceeding 10 million, a labor force participation rate of roughly 70%, and an urbanization rate below 15%, according to the National Statistical Office. While the formal sector remains relatively small, there are emerging opportunities in agriculture, fisheries, and digital infrastructure, supported by targeted government incentives.
Looking ahead, PNG’s economic outlook is cautiously optimistic. Sustained growth in the resource sector, combined with regulatory reforms and infrastructure investment, is expected to attract new capital inflows. However, risks persist, including political instability, infrastructure deficits, and global commodity price volatility. Investors should conduct thorough due diligence and actively monitor policy developments to navigate PNG’s evolving investment landscape.
3. Priority Investment Sectors: Mining, Energy, and Beyond
Papua New Guinea (PNG) continues to present significant opportunities across its priority investment sectors, with mining and energy leading the way, complemented by growing interest in agriculture, fisheries, and infrastructure. These sectors are underpinned by vast natural resources, evolving legal frameworks, and government initiatives aimed at fostering sustainable economic growth.
The mining sector remains the cornerstone of PNG’s economy, accounting for approximately 26% of GDP and over 80% of export earnings. Key projects such as the Wafi-Golpu gold-copper mine and the Porgera gold mine recommencement are expected to drive sector growth from 2025 onward. The government, through the Mineral Resources Authority, continues to refine regulatory oversight, including the Mining (Amendment) Act 2020, which clarifies landowner rights, licensing, and royalty frameworks. Compliance with stringent environmental and social impact requirements is mandated for all new and existing projects.
The energy sector, particularly liquefied natural gas (LNG), is another pillar of PNG’s investment landscape. The PNG LNG project, operated by ExxonMobil and partners, has seen robust returns and remains a key driver of foreign direct investment. Expansion plans for the Papua LNG project, led by TotalEnergies, are advancing with a final investment decision anticipated in 2025. The Department of Petroleum and Energy oversees licensing and compliance, with a focus on transparency and equitable benefit sharing under the Oil and Gas Act. Renewable energy is also gaining traction, with government-backed incentives to attract private investment in solar and hydroelectric projects.
Beyond mining and energy, agriculture and fisheries offer diversification potential. PNG’s fertile land supports cultivation of coffee, cocoa, oil palm, and spices, which collectively contribute around 20% to GDP. The government, via the Department of Agriculture & Livestock, encourages agro-processing investments and value chain development, bolstered by efforts to improve land titling and reduce bureaucratic barriers for investors. Similarly, sustainable fisheries projects are promoted under the oversight of the National Fisheries Authority, which enforces compliance with international standards and export protocols.
Looking ahead to 2025 and beyond, PNG’s outlook remains positive, driven by large-scale resource projects, regulatory reforms, and government commitment to economic diversification. However, investors must navigate a complex compliance landscape, including local content requirements, landowner negotiations, and ongoing anti-corruption initiatives managed by the Independent Commission Against Corruption. Strategic engagement with government agencies and adherence to legal requirements will be critical for realizing the full potential of PNG’s priority sectors.
4. Infrastructure & Connectivity: Current Status and Future Projects
Papua New Guinea (PNG) is undergoing significant transformation in its infrastructure and connectivity landscape, which is essential for attracting and sustaining investment. The government has prioritized infrastructure development as a key pillar in its Medium Term Development Plan IV (2023-2027), aiming to create an enabling environment for economic growth and regional integration. The plan identifies transport, energy, and digital connectivity as core focus areas, targeting both public and private investment to bridge infrastructure gaps and improve service delivery.
Key projects currently underway include the Connect PNG initiative, a decades-long, multi-billion kina program designed to develop over 16,000 km of roads, upgrade key highways, and improve rural access. As of 2025, the government reports over 1,500 km of priority roads have been rehabilitated or constructed under this scheme, with additional bridges and transport corridors in progress. International partners, such as the Asian Development Bank and Australia, are co-financing major segments, leveraging blended finance models to mitigate risk and increase project viability. The government’s Department of Works & Highways provides regular updates and compliance requirements for contractors and investors.
In the energy sector, PNG is targeting a nationwide electrification rate of 70% by 2030, up from roughly 20% in 2024. The National Energy Authority is spearheading reforms to liberalize the energy market, attract independent power producers, and fast-track renewable energy projects. In tandem, the government is overhauling regulatory frameworks, such as the Electricity Industry Act 2002 and introducing new licensing regimes to ensure investor protection, environmental compliance, and grid reliability.
Digital connectivity is another strategic frontier. Through the Department of Communication and Information Technology, PNG is expanding its national broadband network, building on the successful landing of the Coral Sea Cable System. The government is also enacting the National Information and Communications Technology Act to facilitate competition, safeguard data privacy, and regulate market entry for foreign and domestic investors.
Investors must comply with local content laws, environmental impact assessments, and public procurement rules, overseen by agencies such as the Investment Promotion Authority and the Conservation and Environment Protection Authority. Infrastructure investments are subject to rigorous due diligence, including land tenure verification and community consultation requirements.
Looking ahead to 2025 and beyond, PNG’s infrastructure pipeline is expected to grow, backed by reforms, international financing, and a focus on public-private partnerships. However, challenges remain, including land access, political stability, and logistical hurdles in remote regions. The outlook remains positive for investors who navigate the regulatory landscape and align with government priorities for sustainable, inclusive growth.
5. Legal and Tax Framework for Foreign Investors
Papua New Guinea (PNG) maintains a distinctive legal and tax framework for foreign investors, shaped by its dual common law and customary law heritage. The principal legislation governing foreign investment is the Investment Promotion Act 1992, regulated by the Investment Promotion Authority (IPA). All non-citizen investors must obtain a Certification from the IPA before carrying on business in PNG. The IPA also administers the Reserved Activities List, restricting certain sectors—such as small-scale retail and land transport—to citizen-owned businesses only.
Foreign investors must comply with the Internal Revenue Commission (IRC) requirements for tax registration and obligations. Papua New Guinea’s corporate income tax rate is 30%, with a higher rate for resource sector companies (e.g., 45% for mining and petroleum). Withholding taxes apply to dividends (15%), interest (15%), and royalties (10%), though these may be reduced under PNG’s various double taxation treaties. The Goods and Services Tax (GST) is set at 10%. PNG’s tax regime has recently seen reforms aimed at broadening the tax base and improving compliance, with digital tax administration initiatives rolling out through 2024–2025.
Land tenure is a critical consideration: over 97% of land in PNG is held under customary ownership, with only a small fraction available as state land for direct investment. Foreign entities typically access land through long-term leases approved by the Department of Lands and Physical Planning, subject to rigorous due diligence and negotiation with local landowners. Legislative amendments in 2023 have tightened compliance and transparency around land dealings to counter fraudulent transfers and improve investor protection (Department of Lands and Physical Planning).
PNG’s Foreign Exchange Control Regulations, enforced by the Bank of Papua New Guinea, require approval for the remittance of profits, dividends, and capital repatriation. Recent updates in 2024 focus on easing administrative bottlenecks and improving foreign currency liquidity, although some delays persist.
Statistically, foreign direct investment (FDI) inflows saw a modest recovery in 2023, with the Bank of Papua New Guinea reporting FDI of approximately K2.2 billion, primarily into mining, energy, and agriculture. The outlook for 2025–2027 remains cautiously optimistic, buoyed by major resource projects and ongoing regulatory reforms to streamline business registration and tax compliance.
- Investment Promotion Act 1992 and IPA Certification required for all foreign investors
- Corporate tax rate: 30% (standard), 45% (resource sector)
- GST: 10%; Withholding tax rates: 10–15% (subject to treaties)
- Stringent land access requirements due to customary tenure
- Continued reforms in tax, land, and foreign exchange regulations through 2025
6. Regulatory and Compliance Landscape
Papua New Guinea (PNG) presents a complex regulatory and compliance environment for investors, shaped by ongoing legislative reforms and evolving governance priorities. As of 2025, the country’s investment framework is primarily governed by the Investment Promotion Authority (IPA), which administers the Investment Promotion Act 1992 and oversees company registrations, foreign investment certification, and business licensing. Foreign investors are required to obtain a Foreign Enterprise Certificate from the IPA before commencing operations. Certain sectors—such as land, natural resources, and reserved businesses—are subject to additional scrutiny and restrictions under the Reserved Activities List.
Compliance with local content and employment laws is critical. The Employment Act 1978 and associated regulations require adherence to work permit provisions, labor quotas, and prioritization of PNG citizens for employment. The Internal Revenue Commission enforces tax compliance, including corporate income tax (30% for most companies), goods and services tax (10%), and sector-specific levies, notably in mining, petroleum, and forestry.
Recent years have seen significant regulatory developments. The Bank of Papua New Guinea (BPNG) continues to strengthen anti-money laundering and counter-terrorism financing (AML/CTF) regulations, aligned with the Anti-Money Laundering and Counter Terrorist Financing Act 2015 and subsequent amendments. Financial institutions and designated non-financial businesses must comply with stringent customer due diligence and reporting obligations, with heightened enforcement expected through 2025.
PNG’s land tenure system—approximately 97% of land is customary-owned—remains a central compliance challenge for resource and infrastructure investments. The Department of Lands and Physical Planning regulates leasehold arrangements and land registration, but investors must also engage in negotiated agreements with landowner groups, often facilitated under the Land Groups Incorporation Act and subject to oversight by the Constitutional and Law Reform Commission.
Key statistics reflect an ongoing push for greater transparency and investor certainty. In 2023, the IPA reported over 58,000 registered companies, with an upward trend in foreign direct investment approvals, especially in energy and infrastructure sectors (Investment Promotion Authority). The government continues to prioritize legislative modernization, including updates to company law and efforts to digitize regulatory filings.
Looking ahead, the outlook for regulatory and compliance matters in PNG is one of gradual improvement, though challenges remain. Progress on anti-corruption initiatives, digitalization of government services, and harmonization with international standards continues, but investors should anticipate ongoing complexity in land access, local partnership requirements, and sectoral regulation through at least 2027.
7. Navigating Risks: Political, Environmental, and Market Considerations
Investing in Papua New Guinea (PNG) in 2025 presents a unique blend of opportunities and risks shaped by the country’s political landscape, regulatory frameworks, environmental challenges, and evolving market conditions. Understanding these factors is essential for investors seeking sustainable returns.
Political Risks
PNG’s political environment is characterized by relative stability, but frequent changes in government, regional disparities, and local landowner disputes can introduce unpredictability. The 2022 general elections reinforced democratic processes, yet ongoing governance reforms and anti-corruption initiatives remain central themes. The government has prioritized regulatory transparency and is actively working on amendments to the Investment Promotion Act to clarify foreign investment requirements and restrictions (Investment Promotion Authority). However, investors should monitor potential for policy shifts, especially in resource sectors, as state participation and local content requirements may evolve.
Legal and Compliance Risks
PNG’s legal system blends customary and statutory law. While the Investment Promotion Act 1992 (amended) governs foreign investment registration, sector-specific laws—such as the Oil and Gas Act 1998 and the Mining Act 1992—impose additional compliance obligations. The government is progressing on anti-money laundering reforms to align with FATF standards, aiming to improve PNG’s international risk profile (Bank of Papua New Guinea). Investors must conduct robust due diligence on land tenure, as most land remains under customary ownership, often resulting in lengthy negotiations and potential disputes.
Environmental Risks
PNG’s rich biodiversity and reliance on resource extraction create significant environmental considerations. Major projects require Environmental Impact Assessments and ongoing compliance with the Environment Act 2000 (Conservation and Environment Protection Authority). High-profile incidents, such as tailings dam failures and deforestation, have led to stricter enforcement and increased public scrutiny. The government is enhancing monitoring capacity and encouraging investors to adopt international best practices in environmental management.
Market Risks and Outlook
PNG’s economy is projected to grow by 4.6% in 2025, driven by large-scale resource projects and infrastructure development (Department of Treasury). However, reliance on global commodity markets, logistical challenges, and foreign exchange shortages remain notable risks. Exchange controls and repatriation of profits are subject to oversight by the central bank, requiring careful financial planning. Diversification into agriculture, fisheries, and renewable energy offers new opportunities, but market entry barriers persist due to infrastructure gaps and regulatory complexity.
In the coming years, investors in PNG must prioritize legal compliance, stakeholder engagement, and sustainability to navigate ongoing risks and capitalize on emerging opportunities in this dynamic market.
8. Local Partnerships, Labor, and Cultural Insights
Investing in Papua New Guinea (PNG) requires a nuanced understanding of local partnerships, labor regulations, and cultural dynamics, all of which are pivotal for successful and compliant operations. PNG’s investment climate is unique, characterized by its diverse cultures—over 800 languages are spoken—and the significant role of customary land ownership, which covers approximately 97% of the country’s landmass. This makes building strong local partnerships essential for securing land access and social license to operate.
The legal framework for foreign investment mandates the registration of all overseas enterprises with the Investment Promotion Authority (IPA). Additionally, the Investment Promotion (Amendment) Act 2023 strengthens local participation by reserving certain sectors for citizens and requiring joint ventures or local shareholding in others. The IPA maintains a Reserved Activities List, which restricts foreign investment in specific sectors such as small-scale retail and transportation, promoting opportunities for PNG nationals.
Labor regulations are overseen by the Department of Labour and Industrial Relations under the Employment Act 1978 (as amended). These laws set standards for employment contracts, minimum wages, occupational safety, and worker rights. As of 2025, the national minimum wage stands at 3.50 kina per hour. The government has also increased focus on training and localization, with the Work Permit System requiring employers to prioritize local hires and provide training for skill transfer. Non-compliance—such as failing to secure work permits or breaching localization commitments—can result in penalties or revocation of business licenses.
Culturally, investors must recognize the importance of engaging with local communities and customary landowners. Many projects, particularly in the resource sector, require extensive consultations and benefit-sharing agreements. The Mineral Resources Authority stipulates that mining and exploration projects must include landowner benefits and social development components, reflecting the legal and customary rights of local populations. In practice, social license to operate is as critical as regulatory compliance; poor community relations have led to project delays or disruptions in the past.
Key statistics highlight PNG’s young and rapidly growing workforce—over half the population is under the age of 25—coupled with an urbanization rate of roughly 2.5% per year. The government’s Vision 2050 and Medium Term Development Plan 2023-2027 emphasize creating jobs and upskilling citizens, presenting opportunities for investors willing to invest in training and local partnerships.
Looking ahead, investors in PNG must prioritize robust local partnerships, rigorous compliance with labor and investment laws, and meaningful engagement with communities. These elements, combined with government initiatives to foster inclusive growth, will remain central to sustainable business success in Papua New Guinea through 2025 and beyond.
9. Case Studies: Success Stories and Lessons Learned
Investing in Papua New Guinea (PNG) has seen a mix of high-profile successes and cautionary tales, providing valuable lessons for prospective investors. The country’s resource-rich profile—particularly in minerals, oil, and gas—has attracted significant foreign direct investment (FDI), yet local regulatory and operational challenges have shaped unique outcomes for major projects.
A prominent success story is the PNG LNG project, operated by ExxonMobil in partnership with the PNG government and global stakeholders. Launched in 2014, it rapidly became the country’s largest-ever resource investment, contributing over 20% to PNG’s GDP and generating more than USD 13 billion in export revenue by 2023. Its operation has demonstrated the benefits of strong public-private partnerships, adherence to rigorous environmental standards, and community engagement. The project’s positive impact on national revenue and employment continues to be cited as a benchmark for responsible investment in the country (Kumul Petroleum Holdings Limited).
Conversely, the Ok Tedi Mine—one of the world’s largest open-pit copper and gold mines—offers lessons on the importance of environmental compliance and stakeholder management. In the 1990s, environmental damage stemming from waste disposal practices led to international legal disputes and reputational risks. The government’s eventual intervention and the establishment of the Ok Tedi Development Foundation in 2001 marked a shift toward more robust local benefit-sharing and environmental remediation. The experience prompted the strengthening of PNG’s environmental regulations and social license requirements for resource projects (Ok Tedi Mining Limited).
Recent years have also seen successful investments in sectors beyond extractives. For example, the expansion of Digicel PNG, a major telecommunications provider, has fostered digital inclusion and market competition. This was facilitated by regulatory reforms and the issuance of new operator licenses, contributing to increased mobile penetration and digital services access (National Information and Communications Technology Authority).
Lessons learned from these cases emphasize the necessity for investors to prioritize legal compliance, community engagement, and environmental stewardship. PNG’s Investment Promotion Authority continues to streamline approvals and promote transparency, while new legislative initiatives—such as amendments to the Companies Act and enhanced anti-corruption frameworks—are expected to further improve the investment climate through 2025 and beyond (Investment Promotion Authority).
Overall, the trajectory of investment case studies in PNG shows that success is most sustainable when investors align with evolving legal standards, foster local partnerships, and maintain strong social and environmental governance.
10. Outlook 2025–2030: Opportunities, Challenges, and Strategic Recommendations
Looking ahead to 2025–2030, Papua New Guinea (PNG) presents a dynamic investment landscape shaped by resource wealth, evolving legal frameworks, and ambitious national development objectives. The country’s GDP is projected to grow steadily, bolstered by new extractive projects and government focus on economic diversification. According to the Papua New Guinea Department of Treasury, growth for 2025 is forecast at approximately 4.6%, largely driven by the mining, oil, and gas sectors.
Key legislative reforms are underway to enhance the regulatory environment for investors. The Investment Promotion Authority has streamlined business registration and compliance requirements, including the digitization of company filings and improved investor services. Revisions to the Companies Act and new anti-money laundering provisions aim to align with international standards, fostering greater transparency and investor protection.
Sectoral opportunities are most pronounced in energy, agriculture, telecommunications, and infrastructure. The Papua LNG and Wafi-Golpu gold-copper projects are expected to drive significant foreign direct investment (FDI) inflows, while government initiatives such as the Medium Term Development Plan IV prioritize infrastructure and rural development. The agriculture sector, employing over 80% of the population, is also the focus of modernization and value-addition strategies to boost export earnings.
However, investors must navigate ongoing challenges. Compliance with local content requirements, land tenure complexities, and environmental standards remains critical. The Conservation and Environment Protection Authority enforces rigorous environmental permitting, particularly for resource projects. Anti-corruption measures and corporate governance reforms are progressing, but the Independent Commission Against Corruption continues to highlight risks in procurement and licensing processes.
Geopolitical shifts and global demand trends—particularly for critical minerals and liquefied natural gas—will shape PNG’s investment appeal. The government’s commitment to fiscal stability, encapsulated in the Central Bank of Papua New Guinea’s monetary policy and prudent public debt management, provides a measure of macroeconomic certainty.
Strategically, investors are advised to:
- Conduct thorough due diligence, particularly regarding land ownership and customary rights.
- Prioritize environmental and social impact compliance.
- Engage with local communities and authorities to ensure project sustainability and social license.
- Monitor legislative updates and leverage incentives offered by the Investment Promotion Authority.
In summary, PNG’s outlook to 2030 is positive but nuanced, requiring informed, compliant, and community-focused investment strategies to realize full potential.
Sources & References
- 2024 Budget Strategy Paper
- Investment Promotion Authority
- Bank of Papua New Guinea
- Investment Promotion Authority
- National Statistical Office
- Mineral Resources Authority
- National Fisheries Authority
- Independent Commission Against Corruption
- Department of Communication and Information Technology
- National Information and Communications Technology Act
- Conservation and Environment Protection Authority
- Department of Lands and Physical Planning
- Department of Lands and Physical Planning
- Constitutional and Law Reform Commission
- Investment Promotion Act 1992
- Department of Labour and Industrial Relations
- Ok Tedi Mining Limited
- Medium Term Development Plan IV
