Conducting business on Kosrae is similar to operating a business in the US because federal and state business laws have been modeled after those in the US.
Businesses may operate as sole proprietorships, partnerships or corporations. Whatever its form, our laws do not require local citizens to share in the ownership of the business if a foreign investor prefers 100% ownership. The preferred approach, however, is for outside investors to enter into joint ventures with local partners. Foreign investment permit regulations, for example, require that consideration be given during the review process to the extent of local ownership in the business.
The reality of the situation is that participation of a local citizen partner will, in all but the most unusual situation, be beneficial to the outside investor.
The Kosrae State Government will assist investors in identifying prospective local citizen partners, although you are also free to do so on your own.
Investors who choose to manage their investments on Kosrae will need foreign investment permits to reside in the country for the duration of their investment. If ownership in the business is 20% or less, such an investor is required to secure work permits.