South Pacific Real Estate - The Kingdom of Tonga  

Tonga
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DISCUSSIONS, Page2
 

 

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What are the requirements for getting a visa?

Malo e Lelei,

Roxana here from Entra Services. 

We have 3 kinds of visas a foreigner can apply for:

  

1. Business visa (2 years and is renewable).

2. Employment visa (2 years and is renewable).

3. Assured income visa (2 years and is renewable).

1. Business visa:

If you want to have a business in Tonga, you will need a business visa and a minimum capital requirement of TOP $50,000.00 is required. Visas will remain valid while the business is trading/operating.

2. Employment visa is for those who want a job.  The employer must convince the Ministry that there is an authentic need to employ the applicant in the business.

3. Assured income visa. This visa allows residency in the Kingdom without employment or business, and it does not allow an applicant to work, study or start a business in Tonga. To qualify you must have income of at least TOP $10,000.00 per annum. Evidence of a current and operational bank account in Tonga; AND Financial Documentation evidencing this income and that the source of such income is bonafide.

Please let me know which kind of visa you wish to apply for. 

In any case, you should prepare to obtain: A police record for every member in your family ( over the age 16), 4 recent passport photographs of all Applicants, lots of reference letters from persons who have known the applicant for 5 years (contact details of the referee). All other documents should be originals (marriage certificate, education/training Certificates or transcripts), if copies- they need to be certified.

Prices for the Entra Services are available upon request.  

Thank you so much.

Roxana
entra@kalianetvav.to 

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The government just announced that on certain land and under certain conditions, one can get up to 999 years on a lease.  Any land that is part of the government estate has the potential for the extended lease term.  This does not apply to commoner land on government estates.  The government estates are few.  The process is new and no one is sure of exactly how they will qualify these properties. 

Warwick buying and building out here was the catalyst for their getting the first extended term deal and $20 million in investment was the carrot.  Of course, a smaller piece, i.e. 8 acres would not likely command that kind of investment, so it is assumed the qualifications for the 999 would be very much less on small land pieces….   Guessing we are here on how things will be dealt with and even the land office can’t say for sure how it will go.  Apply, make a case and see. 

The only way to secure a property and manage a lock down of the price is to make an offer.  

To make a deposit on a property you wire the money to me and I trade it for a signed offer of a firm price and any conditions… however, once I give that deposit to the landholder, we are very likely never to see it again.  So, it has to be non-refundable, or anyway, they don’t sign anything. 

Deposits are the only way to secure anything, now or later.  One has to evaluate the risk.  I could honestly suggest that, if one could afford it, they should lease up all the good beach land, and quickly.  My first 7.5 acre sale/lease of beach property went for $30,000 USD.  Today it would be $100K.  A fellow just bought 4 acres on an island for $65,000.   It will be offered over $80 now, just a month later. 

What I am saying is, it will all be worth a fortune one day, just like everywhere in the world where beach land is offered.  I started this land rush less than 5 years ago and may have been the catalyst for the 999 concept.  Some love me for opening the doors for investment here and others not.  Everything has two sides out there.   The government wants the development and some of the old ex-pats here don’t, or say they don’t, even though some are becoming wealthy from their own increasing land values, thanks to me.  There are some jealousies here, but they should not affect you.  I get all the heat, but I deserve it for being so bold as to get into this business.  I am the first to do so and have no background in it… that must give you some idea of how early in the pioneering stage this place is. 

Robert …

What are the laws regarding land, leases and sale? I have heard conflicting stories.  Also, how long have you been in the business?  Please take no offense, but dealing with someone across the ocean can give one an insecure feeling.   

As for the issues surrounding land dealing; the subject has been bandied about since I got into this business about 5 years ago.  I am the first real estate broker here, and may be the only licensed one still.  I reinvented the concept that was foreign here (where in the world could you do that but Tonga?) and they actually made up a special license for me to operate.  I will tell you, it has been the most interesting situation I have ever been in, resulting in my making headlines in one newspaper and my meeting most of the people in government, including the King.  I offered full disclosure of everything I was doing via dinners, meetings, invitations to their homes and their offices.  Everything I was doing and intended to do was laid out on the tables, including all documents I or lawyers had drawn up.  The general consensus was; never in the history here has anyone brought so many investors to Tonga or succeeded in maintaining a business doing so.  I was an anomaly that was scrutinized from every angle.  Since, I have letters from officials that read like love letters.  I dare not show them off for fear of stirring up more jealousies, in particular by any competitors who have VERY unsuccessfully tried to imitate me. OK, not tooting my horn as much as relating some Tongan history that I just happen to be a part of.

Now, I am interested in what material you have been reading on the subject that has confused you.  I read it all from every source possible and suspect some material exists that I might not be privy to.  If you have anything that you can offer me in the way of info, please share it.  I would be glad to comment back on any such material. There are a lot of misconceptions here. The place is a regularly watered garden for them.  

Brings us to the land laws and their interpretation.  They are quite simple. It only gets complicated when you want to effect a longer term that the land laws allow for---and there are ways.  No one "owns" land here, but landholders can lease it.  That lease is ONLY a government document written in the 1800's on a large piece of paper that is not amendable.  If someone offers you a land lease that is not printed on A-5 paper in two languages without official seals, it is not a valid land lease.  The law determines the term of years a lease can be written.  Commoner landholders, which comprises the basic population, can lease their "bush" land (the most popular land) for only 20 years, with a 10 year legal extension, but the extension must be signed and negotiated after the initial 20.  For "town land", the term might be as high as 50 years.  Nobles and government can lease their land for up to 99 years. This was the end of the story right here, until very recently, where on government owned estates you can get up to 999 years on a government lease. 

So, if you want a term longer than allowed for under the land lease laws, you have other options.  These options do not refer to land, but rather to buildings or joint ventures where buildings are involved, which of course, are built upon land.  So, indirectly, they represent a land deal--to be forthright about it.  Those contracts are outlined next.

The Tenancy Agreement has been used for many years here.  It refers to the rental of buildings and structures on land, but not renting the land per se.  The Tenancy Agreement has no legal limit for its term, but nothing in Tonga that has anything to do with land extends over 99 years (with that rare and new exception noted). The TA has a subjective limit of 99 years. There are issues with the agreement as there are issues with the land lease. Nothing being perfect in Tonga.

 

The solution for the short term land laws on larger pieces is the combination, TA and land lease.  It works like this; the land lease is good for 20 years only, but the TA is good for 50 or more.  The land lease is kind of a deed, insurance of having a proper landholder and it asserts very officially that the land is no longer the landholder's for the duration.  After the 20 years, when the lease expires, the TA comes into full force, having been there all the years, but at this point it is the only valid agreement you have.  It covers all the buildings, walkways, fences and structures that you have built, which are now the landholder's, but are being rented by you and paid for in advance (which gives you another legal advantage) with explicit language as to the terms and conditions of this agreement.  It is a proper agreement drafted by the President of the lawyer's association here and has been reviewed by the land office and their legal staff. It has provisions for reselling and about every right akin to ownership you could want. 

Another agreement, which has not been tested or run by the land office and legal people like the TA has, is;  an agreement by the landholder to increase the lease term as the new land laws anticipated passing will allow for.  The agreement says; we know the government has before it some new land laws under consideration.  If and when these new laws allow a commoner to lease his land beyond the present limits, the landholder agrees to take the first opportunity to tend to extending the lease between the parties.  And on and on.  So, if the land laws change, maybe this agreement is legally binding to force an extension or rewrite of the lease to extend the 20 to 50 or as agreed and allowed for under the new law. 

Complicated?  Yes, but so far so good. Now, for the lots by the sea for little down and monthly.

This agreement is an offshoot of what was required in the old days, that being the requirement to have a Tongan partner in everything you do.  The issues surrounding that requirement must have been varied and interesting. A Tongan partner is no longer required, but still has some desirable attributes if the agreement is inflexible and not tried to arbitrary ways of seeing or dealing with things. 

The “Investment” agreement has been through the same scrutiny that the TA has.  Especially the one at Lafi Moetala, which is the Crown Prince’s land.  When he was Prime Minister, I was invited to his home with the mayor of the area and the primary landholder there. We went over the whole program with “His Royal Highness” and subsequent visits to the project by he and his son the Prince. This model was previously introduced in the first of such projects closer to town, in the Toula area.  The logic or legality of the agreement lies with the term; “investment”, the key to making this agreement valid for 99 years.  The two page agreement basically says; the landholder offers you a place to build a house that, in turn, you agree to revenue share with him under very specific terms anytime you rent it or sell it.  Selling costs you 1.5% of the sell price, rental is a small percentage of the 25% charged for absentee owners to manage their places.  So, the landholder is bound by the agreement which has little in the way of negatives to offset the positive of the maximum term of 99 years. The other comfort level is the safety in numbers there, where up to 85 some people might have some collective clout should anything come up that no one has thought of.  You don’t know, what you don’t know and all the King’s men and lawyers too, will not be able to anticipate what is unseen or not predictable. This is new territory for Tonga.   

You have choices.  They are, combinations of agreements and or the just plain old lease.  Some have elected to not go with the lease, given it has some language in there from the 1800’s that could be unsettling should the government ever invoke every option there that it never has in the past. They just use the TA with its more comfortable language. 

Probably worthy of mention again:  No document called a land lease or that which refers to land other than the government’s official land lease is legal for land dealing.    

In brief, that about covers it. 

Phew,

Robert       

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