Vanuatu Trust Formation: A Guide for International Investors

Could a Vanuatu offshore trust keep one lawsuit or a messy inheritance from undoing decades of your work? Nothing can promise that. But it can help. You hand assets to a licensed trustee in the South Pacific, under rules rooted in English common law. Used well, it supports asset protection, estate planning and spreading your wealth across more than one country. It won't hide you from tax authorities, and it won't make anything untouchable. This guide covers how it works, who's involved, what it costs and the limits to know.

What Is a Vanuatu Offshore Trust? The Basics in Plain English

Trusts work like a promise backed by law. You, the settlor, hand assets to a trustee. The trustee looks after them for the people you choose. These people are the beneficiaries. On paper, you no longer own those assets. That split between legal ownership and benefit is the whole idea.

Vanuatu has never had a trusts act of its own. The government says so in the explanatory note to its 2026 Trust Bill. Article 95 of the Constitution of the Republic of Vanuatu kept the British and French laws in force on independence day, 30 July 1980, until Parliament replaces them. For trusts, that means English common law and equity, the UK Trustee Act 1925, the UK Trustee Investments Act 1961 and a 1974 Queen's Regulation on perpetuities and accumulations. A separate licensing law, the Company and Trust Services Providers Act No. 8 of 2010, regulates the firms that act as trustees.

That could change soon. A Bill for the Trust Act No. of 2026 is listed for Parliament's session starting 19 October 2026. It isn't law yet. We explain what it would change further down.

Most offshore clients choose a discretionary trust. Here, the trustee decides who gets paid, how much and when. Your deed can set guidelines, and trustees usually follow them. Because no one holds a fixed right to the assets, there's less for a claimant to reach.

Why Choose Vanuatu? Common-Law Roots and Licensed Trustees

Vanuatu is an island nation south-east of Papua New Guinea. It gained independence from France and the United Kingdom in 1980. Its three official languages are Bislama, English and French, so your documents can be in English.

• Common-law roots: Courts apply English principles of law and equity.
• Licensed trustees: Anyone providing trust services as a business must be a company holding a Company and Trust Service Provider (CTSP) licence from the Vanuatu Financial Services Commission (VFSC).
• Real safeguards for trustee firms: Licensed firms must hold VT20 million in minimum financial resources, carry professional indemnity insurance and have their trust-money records audited each year.
• No public register today: Trusts don't register with the government yet, so there's no public record of your arrangement. Your trustee still keeps full records, as covered below. The 2026 Trust Bill would create a confidential register.
• Open to foreigners: Vanuatu law sets no nationality or residence rule for settlors.
• Diversification: Holding assets under a second legal system spreads your risk across borders.

Asset Protection Features: What Helps and What Doesn't

Here's what works in your favor, plus the gaps you should know about.

• Discretionary control: Beneficiaries have no fixed right to income or capital. That makes claims against them harder.
• An independent, licensed trustee: Firms acting as professional trustees must hold a CTSP licence. You don't control the assets day to day, and that distance is part of the protection.
• Protector oversight: You can name a protector to watch over the trustee. Licensed trustees must record who the protector is.
• Spendthrift-style wording: Your deed can say a beneficiary's interest ends or shrinks if they go bankrupt. The Trust Bill would confirm these protective trusts in statute.
• Privacy, not secrecy: There's no public register. But the regulator can demand your trustee's records and share them with foreign agencies, including in foreign tax evasion cases.
• Change of domicile: No Vanuatu statute deals with moving a trust today, so it depends on a power written into your deed. The Trust Bill would expressly allow a change of governing law where the deed or the court permits it.
• Forced heirship: Today no Vanuatu statute shields a trust from foreign forced-heirship or matrimonial claims. The Trust Bill would add that shield, along with protection against a beneficiary's foreign insolvency.
• Foreign judgments: There's no system for registering foreign judgments. A creditor has to start a fresh claim in the Supreme Court, which treats the judgment as a debt. Courts have applied a six-year limitation period to those claims.
• No special creditor law: Vanuatu has no dedicated asset protection statute. There's no short deadline for creditor claims against transfers into trust and no higher burden of proof, and the 2026 Trust Bill doesn't add them. Places like the Cook Islands and Nevis have legislation built for this job.

Key Features at a Glance

Who's Involved? Settlor, Trustee, Protector and Beneficiaries

The Settlor (You)

You create the arrangement and fund it. Vanuatu law sets no nationality or residence rule for settlors. You don't need to travel, because the deed can be signed anywhere in the world. Under the English trust principles Vanuatu applies, you can also be one of the people the trustee may pay. But a trust you can benefit from is usually the easiest kind for your own creditors to challenge, so we often advise against it.

The Trustee

The trustee becomes the legal owner and manages the assets for your beneficiaries. A firm providing trust services as a business must be a company holding a CTSP licence under the Company and Trust Services Providers Act No. 8 of 2010 (the CTSP Act). The Act's Special Trust Licence is only for administering customary land in Vanuatu, so it doesn't cover offshore trusts.

A company based abroad can only get a CTSP licence if it is registered as a local company under the Companies Act, and at least one of its managers must live in Vanuatu. Before you sign, check your trustee on the regulator's list of licensed company and trust service providers.

The Protector

A protector is an adviser or family friend who keeps an eye on the trustee. Your deed sets the protector's powers. Common examples are approving large payouts or replacing the trustee. Vanuatu law recognizes the role: licensed trustees must record the protector's identity.

The Beneficiaries

These are the people who benefit. A beneficiary can be a named person or a whole class, such as "my grandchildren." In a discretionary setup, each beneficiary has hopes, not rights, until the trustee decides to pay out.

Establishing a Trust in Vanuatu Takes Six Steps

Before forming an offshore structure, get clear on your goals. Then follow these steps.

1. Plan with advisers. Decide what to protect and who should benefit. Ask a home-country tax adviser how the structure will be taxed and reported.
2. Choose a licensed trustee. Use only licensed trust companies that appear in the regulator's directory.
3. Pass due diligence. Your trustee must identify the settlor, trustees, protector, beneficiaries and beneficial owner and run checks under the Anti-Money Laundering and Counter-Terrorism Financing Act No. 13 of 2014. Expect to show ID, proof of address and where your money came from. The exact list depends on the trustee.
4. Sign the Vanuatu trust deed. This is the main legal document. It names the parties, sets the rules and can be signed anywhere.
5. Pay the duty. Lodge the deed for stamping within one month of signing it locally, or within one month of it first arriving in the country if signed abroad. Lodging up to three months late adds 25% penalty duty (minimum VT3,000); after that it's 50% (minimum VT5,000), under the 2009 amendments.
6. Fund the structure. Move assets into an offshore bank account held in the trustee's name, often at an international bank. When opening an account, the trustee must tell the bank it is acting as trustee. Once the trust funds are in place, keep records of every transfer.

What Does It Cost, and How Long Does It Take?

Your costs come in three parts: a setup fee, a yearly trustee fee and a one-time government duty.

• Setup fee: Our fee to settle a Vanuatu trust is USD 3,500.
• Annual trustee fee: Charged by the trustee for running the arrangement and taking on legal responsibility for it. It varies by trustee and asset profile, and we confirm it in writing for your case.
• Stamp duty on the settlement: VT50 for every VT10,000 of property settled, with a VT10,000 minimum. If the deed is signed locally and the property sits abroad, the duty is capped at VT20,000, as set by the Stamp Duties (Amendment) Act 2009.

Your total trust formation cost depends on what you settle and where the deed is signed.

You may see VT200,000 quoted online as the yearly renewal fee for a trust management company. That figure is out of date. Under the current CTSP regulations, a trustee firm pays a VT300,000 annual licence fee. That's the firm's own cost to the government, not a fee you pay directly.

How Long Does It Take?

Most of the time goes on due diligence and opening the trust's bank account, not on drafting the deed. Timing varies by trustee, bank and how quickly your documents come together. We confirm a realistic timeline when we quote.

Your Home Country Can Still Tax You: Tax and Reporting Rules

Local Tax

Vanuatu has no income tax, capital gains tax or inheritance tax. It does charge VAT, though. The taxes the Department of Customs and Inland Revenue collects are VAT, business licence fees, rent tax and excise, mostly on activity inside the country. A trust holding assets abroad for non-residents pays none of them. The main local charge is the one-off stamp duty described above.

The trust itself files no accounting records or financial statements with the government today. But the licensed trustee firm must have its trust-money records audited every year. Your trustee should also keep a full ledger of the assets and liabilities it holds for you. The Trust Bill would make annual trust accounts a duty.

Being tax-free locally doesn't make you tax-free. If your home country taxes worldwide income, you still owe that tax at home.

CRS and FATCA

The country takes part in the Common Reporting Standard (CRS). It joined the multilateral agreement for automatic exchange in June 2018 and, according to the OECD, began exchanges that year. Under the CRS rules, a trust run by a professional trustee is usually treated as a financial institution in its own right, so it reports its settlor and beneficiaries.

On FATCA, the US Treasury lists no FATCA agreement with the country, so there is no IGA model. Without one, local banks and other financial firms register with the IRS directly. Thanks to these international financial reporting systems, your account details can reach your home tax office.

Home-Country Reporting

US taxpayers must report worldwide income to the IRS. Anyone else taxed on worldwide income must also report that income to their tax authorities. US persons who create or deal with a foreign trust may have to file Forms 3520 and 3520-A, Form 8938 and the FBAR, and the penalties for missing them are steep. Get advice at home before you move any money.

Every Structure Has Limits: Risks to Weigh

• EU tax blacklist: On 9 October 2026, the EU kept Vanuatu on its list of non-cooperative jurisdictions for tax purposes. The EU applies defensive tax measures to listed places, and banks may ask more questions.
• EU anti-money-laundering list: Vanuatu is also on the EU's list of high-risk third countries, so EU banks must apply extra checks to clients and payments linked to it.
• Information sharing: The regulator can share information with the Financial Intelligence Unit, police and foreign agencies, including in foreign tax evasion cases.
• No dedicated creditor law: Without special statutory rules, a court may look hard at transfers made to dodge existing creditors. Plan early, while things are calm.
• Banking access: Vanuatu has been treated as compliant by the FATF since 2018, but the Prime Minister has said the coming anti-money-laundering review will affect access to correspondent banking.
• Rules in flux: If the Trust Bill passes as drafted, existing trusts with links to Vanuatu would have to register within a year, and trustees would face new record and reporting duties.
• Too much control: If you keep too much power over the assets, many courts may treat them as still yours. Let the trustee act independently.

Is Vanuatu Right for You? How It Compares

It suits people who want a common-law jurisdiction, a licensed trustee and a Pacific base for part of their wealth. If strong creditor rules matter most, look at places with dedicated legislation. Each offshore jurisdiction mixes cost, privacy and protection differently.

• Cook Islands: a Pacific option with its own asset protection legislation.
• A Nevis trust: a Caribbean option with its own asset protection legislation.
• Belize: a Central American option with its own legislation.
• New Zealand: an onshore common-law option for some families.

Prefer a foundation instead? The country also has a Foundation Act (No. 38 of 2009). Compare the formation and benefits of offshore trusts and foundations, and the estate planning benefits of each, on our trusts and foundations page.

Need a Company Too? Pair It With an IBC

Many clients have the trustee own a Vanuatu offshore company. The company holds investments and bank accounts, while the trustee holds its shares. This keeps the corporate structure tidy and the two legal entities separate. A Vanuatu company of this kind is formed under the International Companies Act and has its own registered office, directors and shareholders. If you want to set up a company alongside your trust, open a bank account for your business or add a virtual office offshore, start with our guide to company formation in Vanuatu. It covers offshore company formation, how offshore companies are run and the costs involved.

How Are Vanuatu Offshore Trusts Changing in 2026?

On 9 October 2026, EU finance ministers kept Vanuatu on the EU list of non-cooperative jurisdictions for tax purposes. The Council noted progress on tax transparency, but its conclusions say the country still facilitates offshore structures that attract profits without real economic substance, and hasn't fixed this yet.

Parliament's session from 19 to 30 October 2026 will consider a new Trust Bill, amendments to the CTSP Act and anti-money-laundering law, and legislation on resident entity economic substance. As drafted, the Trust Bill would:

• Let trusts last indefinitely and switch off the rule against perpetuities.
• Require trusts with links to Vanuatu, including those with a licensed local trustee, to register with the VFSC within 30 days. Existing trusts would get a year. The register would be confidential but open to Vanuatu and foreign authorities.
• Require trustees to verify beneficial ownership, update it within 30 days of a change and keep records for 7 years.
• Exclude foreign forced-heirship, matrimonial and beneficiary-insolvency laws, and refuse foreign judgments based on them.
• Allow a change of governing law and require a sole trustee to be licensed.

It's still a bill, and the final text may change. Pressure is building in other ways too. In November 2025, the government launched a Mutual Evaluation Technical Team to prepare for an Asia/Pacific Group on Money Laundering review scheduled for November 2026. The team draws on the Financial Intelligence Unit, the Reserve Bank of Vanuatu, the financial regulator and others. In July 2026, the regulator also published new guidance for licensed trustee firms on licence revocation and targeted financial sanctions.

What We've Learned Setting Up Trusts Since 1996

The structures that hold up best are the boring ones. They're funded early, long before any claim. Every dollar has a clear source. The deed matches how the family really lives. With trustees already required to keep beneficial-owner records, a tidy paper trail does more for you than any country's reputation.

What We Expect Next

This is a prediction, not a promise. Expect tougher checks through 2027. If the Trust Bill passes, trustees will spend 2027 registering existing trusts and tightening their records. The country will also have to respond to the November 2026 review. Trustees may ask for more proof of where your wealth came from, and some banks may stay cautious while the EU listings stand.

What Do People Ask About Vanuatu Trusts?

• How much does a Vanuatu offshore trust cost?

  You pay three things: our setup fee of USD 3,500, a yearly trustee fee that varies by trustee and asset profile, and a one-off government duty on the settlement. The duty is VT50 for every VT10,000 settled, with a VT10,000 minimum. It is capped at VT20,000 when the deed is signed in the country and the property sits abroad.

• How long does it take to set up a Vanuatu offshore trust?

  It depends mostly on due diligence and opening the trust's bank account, which vary by trustee and bank. We confirm a realistic timeline for your case when we quote.

• Does Vanuatu have a trusts act?

  Not yet. Trusts run on English common law and equity, the UK Trustee Act 1925, the UK Trustee Investments Act 1961 and a 1974 Queen's Regulation on perpetuities, kept in force by Article 95 of the Constitution. A Trust Bill goes before Parliament in October 2026, but it isn't law yet.

• Do I need a Vanuatu trustee?

  No law requires one today. But any firm acting as a professional trustee in Vanuatu must be a company with a CTSP licence, and the Trust Bill would require a sole trustee to be licensed. In practice, a Vanuatu trust is run by a licensed local trustee.

• Can creditors break a Vanuatu offshore trust?

  They can try. A discretionary setup with an independent, licensed trustee makes claims harder, because no beneficiary has a fixed right to the assets. But Vanuatu has no dedicated asset protection statute, so there's no short deadline for creditor claims and no higher burden of proof. Transfers made to dodge existing creditors are the most exposed, so plan early.

• Are foreign court judgments enforced against a Vanuatu trust?

  Not automatically. Vanuatu has no system for registering foreign judgments, so a creditor must start a fresh claim in the Supreme Court, which treats the judgment as a debt. Courts have applied a six-year limitation period to these claims. The Trust Bill would also refuse foreign judgments based on forced heirship, matrimonial claims or attempts to undo a Vanuatu trust.

• Do I have to report a Vanuatu offshore trust to my home tax authority?

  Almost certainly, if your country taxes worldwide income. US persons may need Forms 3520 and 3520-A, Form 8938 and the FBAR, and others taxed on worldwide income must report at home too. The country also shares financial account data under the Common Reporting Standard. Check the exact forms with a home-country tax adviser.

• Can a foreigner set one up?

  Yes. Vanuatu law sets no nationality or residence rule for settlors. The deed can be signed anywhere in the world, so you don't need to visit.

• Will my name appear on a public register?

  No. Trusts don't register with the government today. Your licensed trustee must still record who the settlor, trustees, protector, beneficiaries and beneficial owner are, and the regulator can ask for those records. The Trust Bill would add a confidential VFSC register open to authorities, not the public. Expect privacy, not secrecy.

• How long can Vanuatu trusts last?

  Providers quote up to 80 years under the current perpetuity rules. The Trust Bill would remove the limit entirely if it passes.

• Can the settlor also be a beneficiary?

  Yes, under the English trust principles Vanuatu applies. But courts in many countries look harder at structures where the settlor can benefit or keeps too much control, so it weakens the protection.

• Is Vanuatu on the EU tax blacklist?

  Yes. On 9 October 2026, the EU Council kept the country on its list of non-cooperative jurisdictions for tax purposes. It noted progress on tax transparency but says the country still facilitates arrangements that attract profits without real economic substance. Vanuatu is also on the EU's anti-money-laundering high-risk list, so expect more questions from banks.

Ready to Protect What You've Built?

A Vanuatu-based structure gives you a licensed trustee, common-law roots and a second country for your wealth. It supports asset protection, estate planning and succession planning, as long as you fund it early and report it at home. It isn't right for everyone. We build offshore solutions around your family's goals. Book a consultation today and get a straight answer on whether this fits.