All businesses operate in a business environment. The more that is known and understood the better.
V brings a politically stable business environment to the table. With no direct taxes or controls, taxes and fees are minimal. The legislature includes confidentiality provisions as offshore business was strengthened when the ICA (International Companies Act) was passed. An attractive and competitive financial center, an international corporation can be set up in a day.
Businesses must acquire a Business License which is issued yearly and could be subject to some conditions. The license is transferable as of this writing.
As Vanuatu has no income tax and no double taxation treaties, there is no legislation for information swapping.
Two acts, the Mutual Assistance in Criminal Matters Act and the Serious Offenses Act are focused on preventing money laundering within the nation.
Leasehold titles, which replaced freehold titles in 1980, vary in terms depending on location and land use. The charges have remained low, but there is a review every five years. Port Vila and Santo each have fifty-year leases while in rural areas leases may last between 30 and 70 years.
In the South Pacific extreme weather events often impact on an owner’s ability to stay profitable. Reacting when the event happens allows owners to plan and be prepared. A head-in-the-sand method is not good business.
Bukh Global Network
Business competitiveness is a company’s ability to provide products and services as or more effectively and efficiently than the other, and more specifically, relevant competitors. This boils down to considerations in the broader context – the expense of production, human services, transportation expenses, marketing, technology, etc. – and businesses, have to maintain delivery of the competing interests to stay profitable. For businesses, it is about expanding knowledge, information, and expertise to make one’s business (or industry) increase its productivity.
Working through Bukh Global, new businesses have access to training and development in business-related topics unique to the South Pacific.
Pacific Islands Private Sector Organization, PIPSO, is one example and provides multiple modes of capacity building and technical help and support (include facilitating support) to enhance competitiveness by finance training; marketing and quality assurance; cluster development; and food safety and regulations.
Corporate interventions also include industry visits and participating in trade exhibitions and trade shows, where one can learn from competitors, other vendors, and industry-wide players. PIPSO holds the belief that research and development, and commitment to academia is one block in the Pacific that private sector operations have not sufficiently reached out to and there are possibilities to be gathered.
Cluster expansion is one policy area that PIPSO widely supports by understanding Pacific businesses can gain better traction from greater collaboration within and among competitors and like-minded businesses, as well as with Government, and academia.
New businesses are provided training in:
Multi-pronged and coordinated industry research and capacity building programmes for Pacific businesses.
- Innovative credit and funding schemes.
- Business networking and counseling support services.
As reported on LowTax.net there are no taxes for persons other than importation tariffs (at varying rates), VAT at 12.5% (2012), an assessment on lease earnings over VT200,000 in a 6-month period of 12.5%, and stamp duty on various land dealings, share transferrals and some other reassignments at rates of up to 1% (minimum VT2,500).
The Government assesses payments on the purchase of tract(s), charging 2% of the undeveloped capital value as an administrative fee and 5% of the developable capital appraisal as stamp duty. Although there are no State social security participation as such, workers and proprietors provide 6% of salary to a sanctioned superannuation plan, normally the Vanuatu National Provident Fund.
Vanuatu and its quarter-million or so residents are facing 21st-century challenges and vulnerabilities. A tiny island change amidst raising sea levels and superstorms, Vanuatu is an underdeveloped nation which relies on global assistance to survive. A leading industry was endangered by the restrictive after-effects of an international suppression on tax refuges.
Among tax havens like Jersey in the English Channel and the Cayman Islands in the Caribbean, Vanuatu has always been a bit player. Now, Prime Minister Salwai is working to transform the nation’s tax system.
A debate raged in Port Vila about the nation’s financial future. On the one hand is Salwai, a French-trained comptroller, and fiscal reformist. The Prime Minister backs implementing taxes, like corporate and income, to bring revenue which will be utilized as an investment in the nation’s future.
On the other hand is Thomas Bayer, an American financier transformed ‘ni-Vanuatu,’ a term for local citizens. Along with Bayer are a herd of expat brokers, attorneys, and financial counselors. Each has made an excellent living helping the world’s well-heeled secure their assets.
No one questions the requirement for investment funds to support the nation’s economics. One of the planet’s poorest nations, the World Bank points to a per-capita gross domestic product of under $3,000. Just 10% of the nation’s population earns over $40 a month. Education levels are below the international average, and severe meteorology conditions along with climate change are a constant threat. In 2015, Cyclone Pam left 75,000 homeless as the storm swept through the capital.
There are no personal or corporate income taxes, no estate or capital gains taxes. The government has historically been relaxed about requiring businesses to disclose ownership details.
Vanuatu’s offshore economic center dates to the 1970s. Then the British and French divided up governmental control of the islands, then called the New Hebrides. The crash of fixed-exchange rates resulted in capital being more mobile than ever before.
An attractive tax program which promoted offshore banking, lured skilled professionals, financial know-how, and hard currency. Expats stirred the demand for better schooling and healthcare which, in turn, pushed tourism to the fore. The tourist industry now accounts for half of Vanuatu’s economy.
While Vanuatu’s island neighbors such as The Cook Islands and Samoa changed their focus, Vanuatu remained an offshore financial center. By sticking to the operations which served it well, Vanuatu began to draw attention. In 2015, it showed up in the leaked Panama Papers, and an evaluation by the Asia/Pacific Group claimed Vanuatu had been “infiltrated by international organized crime groups.”
To stay in FATF’s good graces, Salwai led the government in pushing through bills designed to expose and prosecute modern laundering. As it works to improve transparency, the nation has invested in information technology and manpower.
It appears Vanuatu has turned the corner.
In June, Vanuatu welcome the arrival of two Chinese People’s warships and in July, China opened a new embassy in Port Vila. Vanuatu became the first Pacific nation to support China’s territorial claims in the South Cinca Sea.
China has spent millions for infrastructure projects. One project, which will be a boom to essential tourism, is a planned upgrade of the nation’s major airfield.
Salwai is turning to a new strategy to attract overseas talent and capital.
Life can be hard, difficult and challenging. Life in Vanuatu is beckoning, attractive and relaxing. Vanuatu Unified Services can help you over the speedbumps as you start your new life in Vanuatu today.