The Republic of Vanuatu is very popular in the community of entrepreneurs and people interested in doing international business. This is partially due to Vanuatu’s very relaxed tax laws, which are simple for business owners as well as regular residents.
This makes it very inviting for some businesses to move their practice to Vanuatu in hopes of maintaining a strong business with fewer restrictions. Vanuatu, with the introduction of new commercial laws in the 1970s, quickly became an international Financial Center, specifically in the South Pacific where it is located.
The town of Port Vila is the main location for commercial business on Vanuatu, which is composed of a group of islands. In Port Vila, finance and banking are the major practices. A sudden expansion occurred in the area with the onset of the new commercial laws and has thrived ever since. Port Vila is the Vanuatu capital for support organizations and professionals. It has had such rapid growth, along with the rest of the islands’ economy, that it has become known and respected in the international business community.
For those wanting to do business in Vanuatu, there are a few important things to consider. First, you should consider whether relocation to Vanuatu is the best thing to do personally, as well as business-wise. Also, one must consider what it means to do business in Vanuatu. The Republic of Vanuatu offers many great business opportunities, but there are still regulations to follow. Most if not all of these regulations are helpful, but it is important to review them in detail before deciding to do business in Vanuatu.
Relocating to Vanuatu
The Government of Vanuatu unequivocally promotes foreign investment and its newly passed legislation known as the Strata Titles Act makes it a lot easier for anyone to invest in the country with a good chance for a profitable return. The government also simplified the procedures implemented by the Foreign Investment Board, Customs, and Immigration to streamline the formalities of taking up residency and investing in Vanuatu.
Relocating to Vanuatu opens a lot of opportunities and you will quickly realize that in this country, compared to other contenders in the tourism sector like New Caledonia and Fiji, land leasing arrangements in Vanuatu actually work excellently. All land leases must be registered in the Land Records Department of the central government. And in urban areas like Luganvillle and Port Vila, the Vanuatu government itself turns into the lessor representing custom owners.
More often than not, courts protect both the interests of the lessee and landowners much more efficient than any land dispute courts. As an added benefit, leases for residential property usually last for fifty years and seventy five years for commercial properties. The property lease can also be renewed once it reaches its expiration like subdividing the property for example.
Banking, Finance, and Foreign Investment
Vanuatu has a very strong support system for foreign investment. Much of this is due to the numerous offshore banking agencies that make homes and centers on the islands, particularly in Port Vila. Foreign investment is perhaps the most quickly expanding form of economic growth on Vanuatu. This is again because of the simple tax laws that draw in investors from all over the world. While tourism, fishing, and cattle ranching support much of the economic stability for locals, it is the financial center that has brought much of the growth since the 1970s.
Foreign investment is even more strongly encouraged by the fact that there are no exchange control regulations or authorities on Vanuatu. This means that accrued funds remitted to Port Vila in any currency can be held and transferred to anywhere in the world without any questions being asked. Because of this, companies may be incorporated using any currency, allowing for much more efficient business. Companies are allowed to run based on any currency and may exchange currency for any other type of currency for free. Naturally, strict money laundering laws do exist to prohibit businesses from taking advantage of this relatively free business environment.
As mentioned above, one of the major attractions to doing business on Vanuatu is the very relaxed nature of taxes that government requires. There are no income taxes, corporate taxes, estate duties, succession duties, gift duties, capital gains taxes, double taxation agreements, or withholding taxes. This complete lack of any burdensome taxes on businesses is what makes Vanuatu a great location for international companies. There is much less to worry about when it comes to considering the tax implications of doing business around the world. These tax incentives also show Vanuatu government’s great interest in being helpful partners for any company willing to bring business to their shores.
The one tax that does exist in the Republic of Vanuatu is known as the Value Added Tax (VAT), which is a 12.5% tax on all goods and services. While this is a fairly hefty tax on each individual item, it is taken in a straightforward manner and is very easy to understand and calculate into a budget. The government of Vanuatu may also take a similar tax on interactive gaming and online casinos run on the islands.
Cost of Doing Business
While all of these tax incentives are very inviting and really do much to help businesses thrive on Vanuatu, it is good to remember that there are still costs involved with setting up a company. Just like any other countries, the Government of Vanuatu also requires businesses pay for a variety of business licenses and fees. These fees include business license fees, insurance, banking and trust company licenses, annual registration fees for all companies, stamp duties, and other smaller fees. These are just a few of the cost items to be aware of before seeking to set up a business on the Vanuatu islands.
Even so, the Republic of Vanuatu is a very inviting group of island for business owners of any kind—from tourism to foreign investment, and even from the fishing industry to cattle ranching. Vanuatu has set up its commercial laws specifically for the purpose of drawing in new business, and anyone is welcome.