Vanuatu offers the possibility to establish a privately owned offshore banking institution with very reasonable capital requirements and governmental fees. The recent changed in banking laws creating a new 2002 International Banking Act established a more regulated financial environment to oversee the continued expansion of the offshore banking sector.
Vanuatu is an established offshore financial center offings a wide range of offshore services and company products. The jurisdiction offers an International Banking Licence through the International Banking Act [CAP. 280] which is regulated by the Reserve Bank of Vanuatu.
The Vanuatu International Banking Act defines a Banking business as:
- A person is carrying on banking business if the person:
- accepts deposits of money that are withdrawable, or payable upon demand, after a fixed period or after notice; or
- undertakes the frequent sale or placement of bonds, certificates or other securities;
and uses such deposits or the proceeds of such sales or placements, either in whole or in part, for loans or investments for the account and at the risk of the person.
2. A person is taken to be carrying on banking business if the person:
- advertises for or solicits deposits of money, or offers to sell or place bonds, certificates or other securities; and
- uses or intends to use the funds so acquired, either in whole or part, for making loans or investments, or any other activity authorised by law or customary banking practice, for the account and at the risk of the person.
Key aspects for obtaining and keeping a license:
It is required that all beneficial owners and directors are in good financial standing with a clean financial history together with a CV and background that is capable of fulfilling the financial obligations required for the maintaining of a international banking licence.
The applicant is expected to have a pain-in capital of more than 500,000 USD, which is the minimum threshold. All liability, debts or loans are such that the sum total of all transactions capital remain above 500,000 USD.
Signatory authority may come from a director or beneficial owner, who will be given authority over accounts. The paid-in capital required to open a International Bank in Vanuatu is not required to be held by the Vanuatu Reserve Bank or any other Vanuatu financial institution. Vanuatu financial regulator officers require that funds are held in a reputable financial institution, whether it is within Vanuatu or abroad.
Depending on the purpose of the financial institution the assets may be held in various forms, which will advised by the Reserve Bank of Vanuatu whether funds are held in cash, stock gold or investments which is often determined by the assets and liabilities.
It is important to note that one must establish the credibility that such a financial institution is to be used for ethical reasons and that such capital used is acceptable and comes from reputed individuals that show ones intentions.
The licence will be revoked if the international bank is not used within the first three months of its inception or during its operations is not used for a period of three months or more.
Refusal of a international banking licence is usually justified because the applicant has a criminal history, is not qualified or does not have a shareholder or director qualified to meet the financial obligations required for keeping the bank in good standing.
- All dealings must be with foreign non-resident individuals, no local financial dealings allowed
- One shareholder required(individual or legal entity)
- Two Directors required (both must be persons and one must be a local resident)
- One Director or shareholder are responsible for managerial duties including knowledge of financial records and regulations
- There is no taxation of any form including on all profits, incomes, or interest, including corporate tax, VAT or income tax
- All International Banks must maintain a physical local office where all records are kept
- Accounts must be filed and audited every year by a recognized agent
- There must be a local physical registered office (formed within 30 days after successful licence application)
- May not have financial dealings in local currency or with local residents
- Proof of paid-in capital in the form of a letter from ones banking institution
- Paid in capital of 500,000 USD
Vanuatu Governmental fee is 16,750 USD which includes application and registration for the licence and first year of the annual company registration fee.
Members associated with the International Bank are protected by law any and all details concerning personal, company or financial related information, unless required by officers of the Reserve Bank or local authorities for the sake of regulatory compliance.
Information is not shared with foreign governmental bodies. All information is protected by law, according to the International Bank Act, unless:
"the foreign regulatory authority or the foreign law enforcement authority is subject to adequate legal restrictions on further disclosure; and...that the information disclosed is reasonably required by the foreign authority for the purpose of its regulatory or law enforcement functions."
Essentially stating that information is kept private unless foreign authorities have reason to believe the applicant is dealing in criminal behavior and have already sufficient evidence against the applicant.
- A locally incorporated licensee must not:
- carry on any banking business other than international banking business; or
- carry on international banking business in contravention of:
- a term or condition of its licence; or
- a provision of this Act or the regulations; or (iii) a directive issued by the Reserve Bank, whether generally or specifically to the licensee.
- Application preparation and submission
- Reviewing and conducting due diligence by the Reserved Bank of Vanuatu
- Creating a local office setup
- License for international bank application
- Notification of International Banking Licence (usually takes 4 months)
- If there is a refusal the Reserve Bank will let the applicant know the reason for refusal of the licence
Necessary documents for an international banking license include:
- Notarized copy of valid passport
- Proof of address
- A second recognized form of ID
- Copy of criminal record
- Bank reference
- Copy of Diploma/Higher Education certificate
- 2 professional references
- Business Plan
*Requirements are for all members associated with the international banking licence including: beneficial owner(s), shareholder(s), member(s), director(s), secretary:
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