3. Friendly business environment with solid legal framework

Tonga is a sovereign constitutional monarchy with a stable political system and evolving democratic institutions. 

The country operates under a unicameral parliamentary framework, where both elected representatives and nobles hold seats in the Legislative Assembly. Since key democratic reforms in 2010, Tonga has held regular elections and maintained a tradition of peaceful governance. Its legal system is rooted in English common law and supported by local statutes, offering a transparent and predictable environment for businesses. Combined with strong political stability, respect for the rule of law, and low levels of corruption, Tonga provides investors with a secure foundation for long-term operations.

Solid and robust legal framework for investors

^{¹ ACP - EU Samoa Agreement: African, Caribbean and Pacific Group of States (77 states) - European Union (28 states). It includes same states from Cotonou Agreement.  -   ² Pacer Plus: Pacific Agreement on Closer Economic Relations Plus (14 states). It includes same states from SPARTECA.  -   Source: Tonga National Investment Policy Statement - https://investmentpolicy.unctad.org/investment-dispute-settlement/country/211/tonga - https://www.state.gov/reports/2023}

3^rd best place for doing business

• Top business destination: Tonga ranks a the 3rd best places for doing business in Pacific Region* according to the Doing Business index 2020. 
• Global business climate ranking: Ranked 103rd out of 212 countries**, Tonga offers a competitive and investor-friendly environment on the global stage.
• Access to Credit: Tonga ranks #9 in East Asia & the Pacific and #48 globally for ease of access to credit, making it one of the top performers in the region for financial inclusion and lending accessibility.

^{*Excluding developed economies.   -  **Countries and territories Notes: Higher score implies better position in the ranking. Doing Business 2020 was the last version created by the Word Bank. The new report called Business Ready (B-Ready 2024) only includes Vanuatu and Samoa from the Pacific Islands States.   -   Source: The World Bank Database Doing Business Report 2020}

Tonga’s governance advantage

Tonga stands out among 20 nations in Southeast Asia and the Pacific for its stable and supportive business climate, offering a strong foundation for economic activity and investment.

• Regional leader in political stability: Ranked 5^th in Political Stability and Absence of Violence, Tonga stands out as one of the most secure and peaceful countries in Southeast Asia and the Pacific. Its consistent governance, low risk of conflict, and strong institutions provide a reliable environment for investors seeking long-term stability and confidence in doing business.
• Vibrant democracy & civic freedoms: Tonga ranks among the top 7 countries in Southeast Asia and the Pacific for Voice and Accountability, highlighting its respect for civil liberties, media freedom, and democratic participation.
• Reliable Rule of Law: With a solid score of 0.55, Tonga stands ahead of major regional economies like Fiji, Thailand, Indonesia, and Vietnam, offering a trusted legal framework for investors and businesses.

^{*Excluding high income economies (Australia, New Zealand & Singapore).  -  Political Stability and Absence of Violence/Terrorism: Perceptions of the likelihood of political instability and/or politically-motivated violence, including terrorism.  -  Rule of Law: Perceptions of the extent to which agents have confidence in and abide by the rules of society, the quality of contract enforcement, property rights, the police, and the courts, as well as the likelihood of crime and violence.   -   Voice and Accountability: Perceptions of the extent to which a country's citizens are able to participate in selecting their government, as well as freedom of expression, freedom of association, and a free media.   -  Source: The World Bank Database.}