Perth-based accounting firm Bentleys MRI has been awarded a World Bank contract to undertake a feasibility study into establishing a special economic zone in resources rich East Timor.
At the preliminary stage, the study will investigate ways to attract foreign direct investment in East Timor from around the world, with the view to implementing necessary changes to foreign investment laws, according to Bentleys MRI director of international projects, Cam Ansell.
Bentleys beat an international field of bidders for the contract from countries including the US, Portugal, another bid from Australia, and one from Europe, Mr Ansell said.
It is understood that expressions of interest in the country have already been made from a major Asian oil and gas company and local petroleum engineering services firms as a direct result of Bentleys study.
As a developing country, East Timor has one of the lowest levels of FDI in the world, with estimates that the nation has just $US1.7 billion of direct foreign capital invested.
Mr Ansell said the biggest advantage for companies investing in East Timor was that many tax laws were still being set up, creating an opportunity for concessions.
“There’s a level of flexibility there,” he said.
However, foreign tax treaties would make it difficult to estimate the exact tax benefits of doing business in the country.
As well as oil and gas, Mr Ansell said, the study would look at ways of promoting investment in the eco-tourism industry to take advantage of the country’s famous landscape.
Agriculture is another potentially profitable industry, with East Timor playing host to emerging coffee and organic food producers.
The country’s non-oil exports were worth $US8 million in 2004, of which $US7 million was from coffee, according to World Bank figures.
The World Bank estimates that East Timor will have a sustainable income from oil of between $US100 million and $US130 million annually.
