A lack of foreign investment rules has been highlighted as the main factor restricting economic growth in the newly independent East Timor.

East Timor's Australian-born First Lady, Kirsty Sword-Gusmao, says there have been plenty of enquiries from potential investors.

She is in the South Australian capital, Adelaide for a national conference of the Institute of Public Administration.

However, she says the setting of foreign investment laws is a major priority as East Timor struggles with massive unemployment of around 80-percent: "At present there is no foreign investment law, but it is being debated in Parliament and is due to be passed, I believe in February, March next year."

"So that will obviously clarify to potential investors, what the rules of engagement are if you like and encourage them to invest in East Timor, which will have huge benefits for recovery of the local economy."