Investing in Timor-Leste

Private investment is formally established under Private Investment Law No. 15/2017 and Government Decree No. 2/2018. Common structures include establishing or expanding a company, buying shares or other capital interests, forming a partnership, consortium or joint venture, reinvesting profits, and acquiring operating, land-lease or other property-related rights where land law permits. Private investment can also involve capital equipment, natural resources, intellectual property and long-term projects. Petroleum, oil, gas and minerals can be subject to separate regimes. National direct investment (NDI) refers to investment by a Timorese investor, while foreign direct investment (FDI) refers to investment by a foreign investor. A joint venture combines foreign and national participation. SERVE, I.P. handles business and commercial registration. TradeInvest Timor-Leste, I.P. promotes and facilitates investment, maintains the investment register, coordinates with public bodies and processes a Declaration of Benefits (DB) or a Special Investment Agreement (SIA). The Ministry of Commerce and Industry issues the relevant investment declaration after technical review, while the Central Bank of Timor-Leste (BCTL) regulates and supervises financial institutions, payment systems and foreign-exchange arrangements. Most sectors are open to private initiative unless the State reserves or restricts them by law. TradeInvest identifies sustainable tourism, agriculture, livestock, forestry, fisheries, aquaculture, manufacturing, processing, strategic infrastructure, renewable energy, logistics, warehousing, research and development, services and exports as priority areas. Recent monitoring for 2024 and 2025 recorded 17 proposals, with activity concentrated particularly in tourism, manufacturing, fisheries and shipbuilding; livestock, agriculture and aquaculture were prominent areas for national direct investment. Dili and Liquica each represented about 35% of monitored activity. Timorese and foreign natural or legal persons can generally invest, whether resident or non-resident, subject to sector rules. Foreign ownership can reach 100% except where petroleum, media or other special legislation provides different limits. Business registration is free and commonly takes about one to five days. The general minimum capital is about USD 1, while a joint stock company requires USD 50,000 and a foreign branch requires USD 5,000. A DB or SIA generally requires a minimum investment of USD 50,000 for a national investor, USD 500,000 for a foreign investor, and USD 250,000 for a joint venture with a resident national investor controlling at least 75% of the capital. TradeInvest may require evidence that the capital has actually been provided and may request an audit. A DB is personal, project-specific and granted once; it cannot simply be transferred to another project or investor. A SIA may be used for an investment whose size, nature or economic, social, environmental or technological significance justifies a negotiated agreement. TradeInvest promotion and DB or SIA processing are free of charge, but taxes, customs duties, sector fees and other public charges do not automatically disappear. Eligible projects and capital goods may receive exemptions from income tax, sales tax, service tax and customs duties for five, eight or ten years depending on the applicable zone and project conditions. The investor must submit annual information to the Ministry of Finance, begin the project within a maximum of one year and meet the approved commitments; failure to start or to perform can revoke the DB and end its benefits immediately. A project must satisfy environmental, labour, tax and social-security rules, comply with minimum-wage and workplace requirements, employ and train Timorese workers, keep proper accounts and reserves, and report capital and international transfers. A DB or SIA does not replace immigration, land-lease, sector, construction or other required approvals. Foreign skilled workers may be employed under the Immigration Law, and a DB or SIA provides at least five work visas, with additional visas possible under the applicable rules. State-land leases can last up to 50 years and may be extended by up to 25 years to a maximum of 100 years; zone-based terms are five years in urban Dili, eight years outside urban Dili and ten years in Oe-Cusse or Ataúro, subject to the governing land rules. Investors receive protection against expropriation or nationalisation with fair and adequate compensation. Subject to law, they may import and export, obtain domestic or foreign credit, and transfer profits, dividends, sale or liquidation proceeds, reduced capital, interest, amortisation, management income, intellectual-property income and compensation abroad through the banking system. Transfers remain subject to BCTL rules and tax requirements. The investment framework also protects intellectual property, professional information, banking information and business secrets. A dispute should first be addressed through an amicable settlement. After 60 days, a foreign investor holding a DB or SIA may be able to use arbitration under the ICSID Convention or its Supplementary Mechanism; national investors generally use the courts unless an arbitration agreement provides otherwise. Timor-Leste has no documented local stock exchange, local order book or local central securities depository. Retail trading in local shares, bonds, exchange-traded funds and investment funds is therefore not locally established. Private share or capital transfers can still occur bilaterally under company law and registration requirements, but the SERVE commercial register and TradeInvest investment register are not securities custody accounts. The Petroleum Fund is a State fund rather than a retail product; its offshore holdings include fixed income, listed equities and private debt. On 31 July 2026, it held approximately USD 18.43 billion, including about USD 12.49 billion in fixed income, USD 5.38 billion in equities and USD 558.07 million in private debt. Direct projects require checks on land certification, permits, electricity, transport, market access, available skills, tax and customs rules, environmental effects, local partners and the ability to send money back abroad. Local projects can be illiquid and difficult to exit, and their results may depend heavily on one site, sector, partner or approval. Infrastructure and logistics gaps, limited skills, financing constraints, land-title problems, sector-specific tax rules and technical reviews can delay or weaken a project. Offshore portfolio investing adds provider, jurisdiction, foreign-exchange and market risks. Timor-Leste uses the US dollar, so investors do not face a local-currency exchange risk in domestic dollar transactions, but dollarisation limits adjustment to external shocks. Investment returns are not guaranteed by the State.