Offshore Companies: Vanuatu
Your Own Vanuatu Company & Vanuatu Bank Account
Vanuatu is in the South West Pacific, North East of New Caledonia and North West of Fiji, governed as an independent Republic by its indigenous people. The Ni-Vanuatu, as they are known, are a peaceful, loving, gentle race, who enjoy life's simpler pleasures in a country of unique and diverse customs and culture.
Vanuatu is a chain of approximately 80 islands situated between the latitudes of 13 and 21 South and about 1,750 km north east of Sydney, Australia. Vanuatu covers 12,189 square kilometres of land and 450,000 square kilometres of sea within its 200-mile exclusive economic zone. Ten islands account for 90 per cent of the total land area. Port Vila, on Efate island, is Vanuatu's capital, and home for the country's international Finance Centre. The population (predominantly Melanesian) is about 140,000, with 20,000 resident in Port Vila. The climate varies from tropical in the north to sub-tropical in the south. Average maximum temperatures are 29 C in the summer months of November to April, and 25 C in the winter months of May to October.
Vanuatu is a pure tax haven, and commercial activities in the country have been greatly influenced by this status. An extremely active financial centre, it is engaged in the administration and management of offshore companies, trusts and banks. Pure, because for both residents and non-residents there are no personal or corporate income taxes, no estate or gift duties, no capital gains taxes, no exchange controls, and extensive secrecy provisions.
The absence of these taxes, duties and controls, coupled with state of the art communications and highly- developed professional services, makes Vanuatu an ideal centre for foreign investors to base their surplus funds for investment or to base off-shore companies forming part of a wider international or financial network. The Vanuatu Government is extremely active in its support, and is committed to making the country the Pacific's foremost tax haven.
The international offshore infrastructure of Vanuatu has long been a favourite of investors. The facilities and the expertise are world standard and Vanuatu is well facilitated with a number of international banks and modern telecommunications. Tourism provides experiences not found elsewhere in the world - the Pentecost Land Dive and the Toka Ceremony on the island of Tanna are both highlights that draw people from all around the world, together with scuba diving.
The uses of a tax haven are really only limited by the fertile imaginations of taxpayers (and non-taxpayers), their accountants, lawyers and other professional advisors.
How best to use any tax haven depends on what type of income a taxpayer has, where it is earned, where it is taxed and, in many jurisdictions, exchange controls. There is no short answer and no easy solution; if there was nobody would pay any tax.
Contrary to popular opinion, tax havens are not only places used to avoid income tax. While this may be their main use they are also very important in the fields of estate and gift duty planning, minimising stamps duties, and the circumvention of exchange controls; uses which are commonly overlooked.
Another often used aspect of the Vanuatu Finance centre is the strict code of secrecy. While this code of secrecy is relied upon, and rightly so in tax planning, it can also be very useful in any number of circumstances where the confidentiality of ownership, or control, want to be preserved.
The Republic of Vanuatu is a parliamentary democracy. Independence was attained in 1980 after some 74 years of joint rule by Britain and France. The Constitution provides for executive and legislative arms of government, and the judiciary. The President is Vanuatu's Head of State. The judiciary consists of the Supreme Court with a Chief Justice and a Magistrates Court.
The legislature consists of a 50-member Parliament elected for a term of four years. The executive consists of a Council of Ministers headed by the Prime Minister who is elected by Parliament from among its members. The President is elected by Parliament and the National Council of Chiefs for a period of five years. The Central government consists of ten ministries with 40 departments. Local Councils have also been set up in various areas of the country. Vanuatu is a full member of the British Commonwealth, the French League of Nations, the United Nations, Agence de Co-operation Culturelle et Technique, the South Pacific Bureau for Economic Co-operation (SPEC), the South Pacific Commission, the World Bank and the Asian Development Bank (which has its regional headquarters in Port Vila.
The International Companies Act (1993), the Companies Act (1986), the Banking Regulation and other Regulations are based on English law. The Supreme Court of Vanuatu has jurisdiction to determine all matters. Commercial law is based on English law.
The local currency is the Vatu (VT) which is tied to a regional basket of currencies. As there are no exchange control regulations in Vanuatu, bank accounts can be held in Vatu or any of the major international currencies, and funds in any currency can be readily transferred anywhere in the world without the need for approvals.
The banking structure consists of a Reserve Bank, the National Bank of Vanuatu, numerous internationally recognised commercial banks, merchant banks, and the State-owned Development Bank. In addition, a substantial off-shore banking centre exists. Many international commercial banks have licences to conduct business locally as well as with non-residents. These banks provide international services through a world-wide network of branches and correspondents.
Vanuatu has no exchange control regulations or authorities. Funds accrued in or remitted to Port Vila in any currency can be held in any currency and readily transferred anywhere in the world. This applies to all types of transactions whether capital, loans, dividends, interest, royalties, service fees or profits. Any major world currency can be invested, earn interest and be repatriated in that currency or freely converted into other currencies. Companies may be incorporated with capital in any recognised world currency.
The Government has created conditions in Vanuatu that have widespread appeal to investors. The general policy toward all forms of foreign investment is to welcome it, provided that the proposed investment contributes to the economy. There is no percentage limit on foreign ownership of a Vanuatu business; indeed, most businesses are foreign owned. In Vanuatu, there are no:
- income taxes
- corporate taxes
- estate duties
- succession duties
- gift duties
- capital gains tax
- double taxation agreements, or
- withholding taxes.
The Government has defined areas for development in agriculture, industry and tourism. Within these priorities the following types of projects receive favourable consideration:
- foreign exchange earning projects
- projects planned for rural development
- projects that generate employment
- projects that will increase tourist accommodation.
These projects are eligible for full exemption from customs duties both on capital goods and construction materials imported during start-up and on raw materials or manufactured goods not locally available that will be re-exported after production.
Generally speaking there are no restrictions on export trade in Vanuatu. Export duties levied are not very heavy. There are no quota restrictions and there is no system of preferential tariffs or duties on goods coming from any particular source.
Business entities available to foreigners.
- Offshore Entities.
- International Companies - offshore companies
- Discretionary or unit trusts
- Offshore Banks
- Offshore Insurance Companies
- Trust Companies
- Shipping Companies
- Local Companies
- Business Names
- Branches of foreign corporations ("overseas companies")
- Sole proprietorships
- Discretionary or unit trusts.
- Local companies.
Local companies are formed to carry on normal trading business in Vanuatu. The provisions applicable to offshore companies do not apply and the company's file at the Registrar of Companies is available for public inspection. Audited accounts must be filed with the company's annual return if the annual turnover of the local company exceeds the equivalent of US$200,000.
The Partnership Regulation 1975 is substantially the same as the 1880 English Partnership Act. A partnership may consist of general and limited partners. Limited partnerships must consist of no more than 20 persons, one or more being general partners who are liable for all debts and obligations. A limited partner cannot withdraw his contribution during the life of the partnership or take part in the management of the partnership business. A corporate body may be a limited partner. Limited partnerships must be registered with the Registrar of Companies.
An overseas company is one which is incorporated outside Vanuatu but which carries on business in Vanuatu. The company must register under the Companies Act and nominate two persons resident in Vanuatu authorised to accept notices on behalf of the company. It must also lodge an annual return together with audited accounts.
Further legislation controls company activities where those companies are banks, or financial institutions, insurance companies, shipping companies or trust companies.
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