Global Offshore Environment in Vanuatu
Why Choose Vanuatu as an Offshore Tax Haven
Vanuatu has been operating as an offshore financial jurisdiction since 1971 and became an international financial destination in 1993 with the International Companies Act that was modeled after the legislation found in the Bahamas and the BVI’s.
Located in the South Pacific, Vanuatu is a archipelago of eighty islands and is a tropical paradise for investors offering an ideal climate for companies seeking an international corporate structure offering complete financial security and tax transparency.
Vanuatu is a zero tax jurisdiction with no financial requirements and confidentiality of all names and details of directors and shareholders, though the country is a signatory to a number of international treaties and organizations, due to international pressure and therefore enforces international financial procedures such as Anti-Money Laundering and ‘Know your Customer’ policies.
The little known island of Vanuatu provides some very big possibilities for those looking to internationalize and diversify their company structure.
Benefits of Setting up an Offshore Vanuatu Company
- Exemption from all local taxation
- Nominee service availability
- No need to submit financial accounts, annual returns or audit requirements
- Based off of an English Common Law system
- Stable economic and political environment
- Name and Details of Director(s) and Shareholder(s) are confidential
- Privacy and Confidentiality are ensured through local financial statutes
- Corporate directors and shareholders are permitted
- It is not required that a company declare its beneficial owner
- Sole Member ownership is available
- Vanuatu is on the OECD ‘white list’
- Quick incorporation process
In-Depth Information about Vanuatu
The Republic of Vanuatu also referred to, as just Vanuatu is an island located in the South Pacific. It is an archipelago consisting of eighty-two islands, sixty-five of which are inhabited. The islands lie 1,750 kilometres north east of Australia, west of Fiji and east of New Guinea. The islands are stretched along a 1,400 kilometre stretch of ocean with a total area of 12,274 square kilometres and a land surface area of around 4,700 square kilometres.
Vanuatu means ‘Our land’ in Melanesian language. The country was jointly ruled by the British and the French in 1880, and became an independent nation in 1980. Vanuatu is a parliamentary democracy with the prime minster being the head of the government who appoints a Council of Ministers that act as a Cabinet. There is a president who is considered to be the head of the republic, and is elected to a five-year term, though the role is largely ceremonial. There is a unicameral parliament that has fifty-two members elected to four-year terms. A Council of Chiefs, called the Malvatu Mauri represents district level tribes and advise the government on cultural matters.
The judicial branch consists of a number of courts, including local village or island courts, court of appeals, and magistrate courts, the highest being the Supreme Court of Vanuatu that has powers separate from the executive and legislative.
Vanuatu has a multi-party system of governance with political allegiance and social identification being largely divided linguistically, primarily between English and French speaking people.
Economy and Infrastructure
The economy in Vanuatu is based off of agriculture, tourism, offshore financial services, and cattle. The mainstay of the economy is agriculture, with 80% of the population engaged in various forms of farming, from cash crops to subsistence farming. Some of the major exports include, copra, kava, beef, cocoa, and timber, which account for 60% of Vanuatu’s total exports. Vanuatu’s main export partners are Thailand and Japan, and rely heavily on imports for machinery, foodstuffs and fuels from several countries including, China, Singapore, Australia, New Zealand, Fiji and Japan.
Tourism is rapidly growing industry and accounts for nearly 40% of GDP (2000).The country has become a popular diving spot as the surrounding waters have extensive coral reefs that are now protected by the government. The economy has an annual growth rate of 3-4% and a GDP of US 1.237 billion (2012). The GDP per capita is US 4900 (2012).
The government has continued to support the growth of the country’s offshore financial sector through the passing of supportive financial legislation. The formation of the country’s offshore sector began in 1971 and has considerably boosted the country’s economy, adding jobs, infrastructure and an increase in banking, legal, and accounting services which contribute to 7% of the country’s GDP.
Vanuatu has two international airports with regular flights to neighbouring islands and countries. There are also a broadband network and a submarine optical fibre cable that connects throughout many of the islands, and Vanuatu with Fiji.
Up until 2008, Vanuatu did not comply with international financial agencies, however, under pressure from foreign governments, they have complied with and have implemented many of the financial policies and necessary to remin in good standing by OECD and FAFTA.
Population, Language and Culture
The fist people to inhabit the islands were the Melanesia people, with the first Europeans being the Spanish, having arrived in 1606. The culture has a lot of diversity throughout the islands with many regional variations. There are many local traditions and ceremonies such as coming of age rituals and religious festivals.
Christianity is the dominant religion in the islands that is made up of Presbyterian (33%), followed by Roman Catholic (15%) and Anglican (15%).
There are many variations of traditional music, which are still widely played in the rural areas. Local instruments such as rattles, slit gongs, aeorphones, bamboo flutes, whistlers, and chordophones are played with a variety of musical traditions some of which are local and western influenced. The slit drums are used in many ceremonies, rituals and dances and are seen as the typical local instrument that is founded throughout the islands.
Traditional cuisine includes fish, root vegetables, as well as fruits such as plantains, pineapple and mangoes that are often cooked in coconut milk and cream in rich stews and curries.
The official languages are English, French and Bislama. Bislama is a pidgin language that is, a language that combines English vocabulary with Melanesia grammar. There are also over one hundred other indigenous languages, which are still spoken throughout many rural parts of the islands.
The country has a total population of 221,000 people as of 2007. Port Vila is the capital, with 80% of the population living in rural areas in relatively isolated villages with their own small subsistence level farming that supplies much of the local communities foodstuffs.
There are no exchange controls in Vanuatu and all major currencies are accepts in Vanuatu banks.
Type of Law
Vanuatu is a Common Law jurisdiction with a constitution stating that pre-independence British laws shall form the basis of the legal system, unless any such laws are seen to be incompatible with the independence of the country.
Principal Corporate Legislation
The Companies Act (Cap 191), the International Companies Act (1993) and the Banking, Insurance, Stamp Duties and Trust Companies Acts form the basis for Vanuatu’s offshore financial and corporate legislation.
Vanuatu International Companies are exempt from all local taxation including for a minimum period of twenty years. This includes, all taxes but not limited to:
- No Dividends tax
- No Corporate tax
- No Value Added Tax
- No Stamp Duty
- No Estate tax
- No Inheritance tax