For the benefit of the international businesspersons and investors who are exploring the opportunities to invest wisely and trade equitably in an island paradise, the Federated States of Micronesia (FSM) is the place.

The FSM became fully self-governing in the Fall of 1986 and was admitted to the United Nations in September of 1991. As a matter of choice, the FSM opted to maintain a close relationship with the United States by entering into a long-term treaty agreement called the Compact of Free Association. With the implementation of the treaty, the FSM fulfilled its collective will to take charge of its own destiny.

Under the Compact Treaty and separate Bilateral Agreements, the U.S. agreed to defend the FSM as it would defend itself and its citizens, and to provide unique packages of financial assistance and investment incentives.

The potential for development in the FSM is immense. The FSM’s 200 mile EEZ encompasses more than 1 million square miles of ocean, teeming with the world’s largest tuna stock, and a total land area of 281.3 square miles.

Sitting gem-like in the vast setting of the Pacific Ocean – some 2,400 miles north of Australia, 2,000 miles south-east of Japan, and 2,500 miles south-west of Hawaii – FSM is relatively unheard of.

The FSM is comprised of four states: Chuuk, Kosrae, Pohnpei and Yap, with Pohnpei being the capital. The four states together consists of about 607 beautiful islands, many of which offer visitors attractions of lush greenery, white sandy beaches and hospitable people unrivalled in the Pacific. FSM enjoys tropical ocean climate, cooled consistently by trade winds throughout the year with the average temperature of 82 degrees Fahrenheit. The islands of the FSM remain to this day an almost virgin territory – one of the last real frontiers on the planet.

The island groups vary in size, appearance, and topography. Pohnpei, in the East, resembles a mountainous, cloud capped shield slicing the sky to a height of 2,000 feet. Chuuk, circled by the largest barrier reef of the world, holds a captive fleet of half-submerged mountain peaks. Kosrae is also mountainous, formed from remains of a volcano dissected by erosion and increased by reef growth. Yap, a large island of sedimentary rock, combines sandy beaches with parched meadows of pandanus. Over a thousand coral islands and reefs complete the scene of the entire FSM.

Abundant rainfall drenches the islands providing abundant water and assuring a steady supply of food in its rich vegetation and flourishing fauna – coconuts, cassava and breadfruits, mangrove swamps along the coasts, rain forests along the slopes, ferns and grasslands on the summits. Shorebirds and seabirds gracefully wing way to the skies and marine life is abundant for sustenance and providing the most ideal divers’ haven.

Both local and international investors are offered a unique blend of advantages: clean environment, favorable economic and social circumstances and a sincere commitment to free market enterprise philosophy. Investment incentives and other packages of financial assistance under the treaty with the U.S. reinforce the commitment to free enterprise and help pave the way to self-sufficiency.

»	The Federated States of Micronesia has a stable democratic form of government modeled after that of the United States.
»	Through the Compact of Free Association (Treaty) with the United States, the FSM is guaranteed security protection by the US.
»	The FSM uses the US dollar as its currency, assuring investors that investment will not be subject to unexpected currency fluctuations to the extent that the US is the market or sources of supply.
»	Easy access by air and sea to major markets such as the US Pacific Rim, New Zealand, Australia, and Guam.
»	Modern telecommunications system and state of the art technology such as telephones, telex, facsimile, internet services and switching equipment.
»	Apart from the FSM Development Bank, Bank of Guam and the Bank of the FSM are on hand to provide modern international banking services linking the nation to the rest of the world.
»	Inexpensive rates for long-term land leases for business sites.
»	Under treaty arrangement, the FSM has no quota restrictions to US markets for domestic or value-added products.
»	The FSM also enjoys preferential market access to other Pacific island countries including New Zealand and Australia. Under the South Pacific Regional Trade Economic Cooperation Agreement (SPARTECA), a non-reciprocal trade agreement, Australia and New Zealand offer unrestricted duty-free access to virtually all products originating from developing member countries, provided certain rules of origin are met. Potential for duty-free access to Japan and other Asian markets also exists.
»	All exports of products as well as re-exports of import products are tax free.
»	The Exclusive Economic Zone (EEZ) includes some of the richest tuna fishing grounds in the world.
»	Government-subsidized water and electrical services in all four states of the nation.
»	Young and relatively inexpensive labor force.
»	Low local taxes.
»	Along with significant US financial assistance, the US also agreed to extend several programs to the FSM, including the US Trade and Development Program, the Small Business Administration, the Economic Development Administration, the Farmers Home Administration, the Job Training Partnership Act, and the Overseas Private Investment Corporation (OPIC). OPIC is particularly important in that it provides political risk insurance, finance, direct loans, and loan guarantees.
»	The FSM Government welcomes and supports foreign investment as part of its overall economic development strategy.

A tropical paradise with year-round warm climate in a myriad of islands, the FSM has a clean and unspoiled environment and rich natural beauty. In short, the Federated States of Micronesia is definitely the place to invest, live and work.