Internationally recognized as an independent state in mid-2002, East Timor was determined by 2003 to begin creating a legislative, institutional, and administrative environment attractive to foreign investment. Nathan Associates supported the country’s national program for investment by advising on legislation design, institutional arrangements for investment promotion, marketing, investment facilitation, promotional materials, and product chains involving foreign and local companies.

Nathan Associates first cultivated relationships with government officials, foreign and local businesses, and donor agency officials and operatives; implemented a basic legal framework for foreign investment; and established a structure for the investment division of the Ministry of Economic Development. Building on this foundation, the team institutionalized a truly consultative and inclusive approach to all legislative activities, organizing surveys, roundtable discussions, and stakeholders forums to gauge local sentiments and perceptions of foreign investment, and to establish a productive process for the design and approval of legislation.

By the end of the project, the team had helped

(1) finalize a private investment policy and submit it to the Prime Minister for deliberation and approval by the Council of Ministers

(2) ensure the success of the Commercial Companies Law, advising the Secretary of State for Tourism, Environment, and Investment on various aspects of the proposed bill, which was passed by an overwhelming majority in March 2004

(3) draft domestic and external investment laws in collaboration with the Secretary of State for Tourism, Environment, and Investment.

Under these laws, investors earn fiscal incentives based on the number of full-time local workers they employ and new ventures are granted Customs incentives to mitigate the high cost of starting a business in East Timor. The domestic private sector has praised the laws’ simplicity and clarity.