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Vanuatu
We have a team of experienced professionals dedicated to supporting all your business requirements—ensuring smooth operations and full regulatory compliance. This strong foundation enables you to confidently establish and grow your business in Vanuatu with efficiency and assurance.
WHY VANUATU?
Vanuatu is an island country in Melanesia located in the South Pacific Ocean. The archipelago, which is of volcanic origin, is 1,750 km (1,090 mi) east of northern Australia, 540 km (340 mi) northeast of New Caledonia, east of New Guinea, southeast of Solomon Islands, and west of Fiji. In 2015, Vanuatu was ranked the 84th most economically free country by The Heritage Foundation and The Wall Street Journal. The economy grew about 6% in the early 2000s. This is higher than in the 1990s, when GDP rose less than 3%, on average. One report from the Manila-based Asian Development Bank about Vanuatu’s economy gave mixed reviews and noted that the economy grew at a 5.9% rate from 2003 to 2007. Vanuatu became the 185th member of the World Intellectual Property Organization (WIPO) in December 2011.
Vanuatu is the 174th largest export economy in the world. The top exports of Vanuatu are Non-fillet Frozen Fish ($70.5m), Tug Boats ($70m), Copra ($17.2m), Molluscs ($8.18m)
and Perfume Plants ($7.97m). Its top imports are Refined Petroleum ($38.8m), Poultry Meat ($6.83m), Baked Goods ($6.72m), Broadcasting Equipment ($6.13m) and Delivery Trucks ($5.4m). The top export destinations of Vanuatu are Mauritania ($70m), Japan ($66m), Philippines ($18.4m), China ($13.7m) and South Korea ($8.5m). Vanuatu ranks 94th in the ease of doing business index 2019 and ranks 116th in the economic freedom index 2019.
Doing business in Vanuatu offers a tax-free, investor-friendly environment with 100% foreign ownership allowed. Key steps include obtaining a Foreign Investment Approval Certificate (FIAC) from the Vanuatu Investment Promotion Authority (VIPA) and registering with the Financial Services Commission (VFSC). While there is no corporate or income tax, a 12.5% Value Added Tax (VAT) applies to specific goods and services.
ADVANTAGES
Financial and Tax Benefits
- Zero Corporate and Personal Income Tax: Vanuatu has no corporate tax, personal income tax, capital gains tax, withholding tax, or inheritance tax. This makes it a tax-efficient jurisdiction for international business.
- No Foreign Exchange Controls: There are no restrictions on the movement of funds, allowing for the easy repatriation of profits in major currencies.
- Confidentiality and Privacy: Vanuatu’s legal framework provides strong privacy protections, with no public register of directors, shareholders, or beneficial owners for International Companies (ICs).
- Offshore Financial Centre: The country has a well-established offshore financial centre, offering a range of services including banking and insurance, with a legal framework based on English Common Law.
Operational and Legal Advantages
- 100% Foreign Ownership: Foreign investors are allowed full ownership of their businesses in most sectors, with no requirement for a local partner.
- Streamlined Setup: The business registration process is straightforward, especially for International Companies (ICs), and can often be completed quickly.
- Operational Flexibility: Companies enjoy flexibility in their operations, with no minimum capital requirements and the ability to hold board meetings anywhere in the world.
- Political and Economic Stability: The government is committed to maintaining a stable and pro-business environment, with ongoing reforms aimed at improving the business climate and attracting foreign direct investment.
Location and Infrastructure
- Strategic Location: Situated in the Asia-Pacific region, Vanuatu provides convenient access to key markets like Australia, New Zealand, and Asia, making it a potential hub for regional trade.
- Improving Infrastructure: The country has seen significant improvements in its telecommunications (fibre optic cable connectivity), port, and road infrastructure, which supports efficient business operations.
- Bilingual Workforce: English and French are official languages, which can facilitate international business dealings.
TAX REGIME
No Direct Taxes:
There are no taxes on income, capital gains, or wealth for individuals.
Corporate Taxation:
Companies incorporated in Vanuatu face 0% income or corporate tax.
VAT & Duties:
A 12.5% VAT applies to most goods and services. Property transactions may incur a 2% registration fee and 5% stamp duty on the unimproved capital value.
Offshore Sector:
Companies incorporated under the International Companies Act may benefit from 20-year tax exemptions.
Tax Administration:
Since January 1, 2020, businesses must use a Tax Identification Number (TIN) and comply with electronic filing requirements managed by the Customs and Inland Revenue Department.
VANUATU COMPANIES
Sole Trader / Sole Proprietorship:
The simplest form with one owner who holds full personal liability for business debts.
Partnership:
Two or more people sharing resources and profits, commonly used by professionals.
Local Limited Company (LLC):
The most common form for local trading, offering limited liability to shareholders.
Private Company:
Restricted from offering shares to the general public.
Public Company:
Allowed to sell shares to the public upon filing a prospectus.
International Company (IC) / Exempt Company:
Often called “offshore” companies, these are incorporated to conduct business exclusively outside Vanuatu. They cannot trade locally but benefit from high confidentiality and no local income tax.
Company Limited by Guarantee:
Frequently used for non-profit organizations or charities.
Overseas Company:
A company incorporated outside Vanuatu but registered to operate within it.
Partnerships:
Includes general partnerships and limited partnerships.
Other Entities:
Includes Incorporated Cell Companies, Credit Unions, and Trade Unions.
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Contact Us
Get in touch with the right people to get the right help in setting up your business in VANUATU.
enquiries@chandrawatpartners.com.