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Structure of the Business Sector

This site is designed to help the Samoan business community to track the business economic environment with particular focus on the long range strategies, taxation and immigration issues relating to employment of expatriate skills in Samoa.This site is designed to help the Samoan business community to track the business economic environment with particular focus on the long range strategies, taxation and immigration issues relating to employment of expatriate skills in Samoa.

1. Overview of the corporate sector in Samoa

It is helpful to divide the formal private sector in Samoa into five broad categories:

1. statutory corporations formed under specific legislation;

2. state-owned/controlled companies;

3. public companies (with majority private-sector ownership);

4. private companies (with majority private-sector ownership);

5. unincorporated businesses, primarily sole traders and partnerships.

Statutory corporations

There are twelve statutory corporations formed under specific legislation as shown in Table 1. Some of these corporations were set up by government to serve specific purposes in the provision of services to the public in a commercial environment. Corporations like the Water Authority resulted from government’s corporatisation exercise of the Public Works Department. Other corporations are monopolies in their sectors, hence, their statutory status is an indirect means of government exercising some control in the interest of consumer protection particularly in meeting government’s social obligations

Table 1

Statutory Corporations formed under Specific Legislation

	% Govt. Ownership	Legislation
Accident Compensation Board	100	Accident Compensation Act 1978
Agriculture Store	100	Agriculture Store Corporation Act 1975
Airport Authority	100	Airport Authority Act 1984
Development Bank of Samoa	100	Development Bank Act 1974
Electric Power Corporation	100	Electric Power Corporation Act 1972
Housing Corporation	100	Housing Corporation Act 1990
National Provident Fund	100	National Provident Fund Act 1972
Special Projects Development Corp.	100	Special Projects Development Corp. Act 1972
Televise Samoa Corporation	100	Televise Samoa Corporation Act 1994
Samoa Water Authority	100	Water Authority Act 1993/1994
Samoa Life Assurance Corporation	100	Life Assurance Corporation Act 1976
Samoa Trust Estates Corporation	100	Western Samoa Trust Estates Act 1977

 

State-owned/controlled companies

In addition to the statutory corporations listed in 1.1.1, government also holds a majority shareholding in eight private companies and one public company as shown in Table 2. The number of commercial private companies in which government has a majority shareholding has continued to diminish as it steps up its privatisation efforts. This was shown just recently by the sale of its majority shareholding (51 percent) in Samoa Breweries Limited.

Table 2

State-owned/controlled Companies

	% Govt. Ownership	Status
Computer Services Limited	40	Private company
National Pacific Insurance Limited	30	Public company
Polynesian Airlines Holdings Limited	100	Private company
Polynesian Airlines Investments Limited	100	Private company
Polynesian Limited	100	Private company
Samoa Communications Limited	100	Private company
Samoa Land Corporation Limited	100	Private company
Samoa Shipping Services Limited	100	Private company
Samoa Shipping Corporation Limited	100	Private company

 

Public companies (with majority private-sector ownership);

A total of ten public companies are registered at the Companies Registry, however, five of these companies are no longer operational. The recent sale of the 51 percent of Government’s shareholding in Samoa Breweries Limited to Carlton Brewery (Fiji) means that four of the five active public companies in the country have a majority private-sector ownership as per Table 3.

Table 3

Public companies with Majority private sector ownership

	% Govt. ownership	Major Shareholders
Samoa Breweries Limited	15	Carlton Breweries Brauhaase International
Pacific Commercial Bank Limited	-	Westpac Bank of Hawaii
Morris Hedstrom Limited	-	MBF Asia Capital Corporation
SV McKenzie Limited	-	Various members of McKenzie family John Watson

 

Private companies (with majority private-sector ownership);

As at 24 July 1999, there were 1,556 private companies incorporated in Samoa though it is estimated that at least half of these companies are defunct. Based on our assessment of active registered private companies and using the pattern of the types of business organisations in the results of the 1994 Business Activity Survey by the Treasury Department, we estimate the number of private companies (with majority private-sector ownership) as in the following box.

46 percent of the 1998 registered businesses (1528) are incorporated companies and is equivalent to 702. The breakdown could be as follows:

• State-owned/controlled Companies 9
• Public Companies 5
• Private Companies (Private sector majority) 688

TOTAL 702

Unincorporated businesses, primarily sole traders and partnerships.

Most of the unincorporated businesses are sole traders, partnerships and cooperatives. The registered sole traders with the Inland Revenue Department are mainly small retailers usually selling a limited range of imported food items. The registered partnerships are the main types of organisation in the accounting and legal profession.

The size of registered unincorporated businesses, using the 1994 Business Activity Survey is estimated in the box below.

Estimate of Unincorporated Businesses

51 percent of the 1998 registered businesses (1,528) are unincorporated businesses and is equivalent to 810.

The unregistered unincorporated businesses could be gauged from the results of the 1991 Population Census which recorded 2633 persons as self-employed. Taking an estimate of 2800 self-employed persons for 1998, the unincorporated businesses could have the following structure.

(Est) 1998 Self-employed persons 2800

Registered 810

Unregistered 1990

The unregistered unincorporated businesses are mainly in the primary sector particularly in farming and fishing.

The corporate sector

The corporate sector is defined in this report as consisting of the following

		1998 Estimated No.
(i)	Statutory Corporations	12
(ii)	State-owned/controlled Companies	9
(iii)	Public Companies	5
(iv)	Private Companies	702
	TOTAL	728

 

The private sector is defined to consist the following:

			1998 Estimated No.
(i)	Formal Sector
	- Corporate Sector	728
	- Registered Unincorporated Businesses	810
			1528
(ii)	Informal Sector
	- Unregistered Businesses		1990
	TOTAL		3518

 

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