Starting a Business in Vanuatu
Vanuatu is fortunate in that is possesses many of the attributes desirable in a jurisdiction in which to invest.
Advantages of Starting a Business In Vanuatu
Vanuatu is currently experiencing very positive times with numerous sub-divisions and building projects underway. Air Vanuatu has doubled its flights and Virgin Airlines are operating 2 flights per week.
• No income taxes
• No capital gains tax
• No withholding tax
• No tax treaties
• Low labour costs
• A pro-FDI (foreign direct investment) government
• Excellent communications and banking facilities
• Pacific paradise just 2.5 hours from Australia
We here at IFTC are pleased to advise that we can assist in all facets of setting up business in Vanuatu.
Establishment of a Business In Vanuatu
Vanuatu’s business legislation is broadly similar to that which prevails in Australia, New Zealand, USA and UK in that local business can operate through the following legal entities: Sole Trader, Partnership, Trust, Company.
VIPA Approval: To start a business in Vanuatu requires firstly that VIPA (Vanuatu Investment Promotion Authority) approval be obtained. VIPA is equivalent to Australia’s FIRB and authorises all new investment into Vanuatu. Once VIPA approval is granted, business license, residency permit and work permit approvals become largely automatic.
Business License: The Business Licence Act No 19 of 1998 provides for the licensing of businesses and matters connected therewith. Essentially no person can carry on business in Vanuatu without first being issued with a business licence by the licensing authority. Practically, the business licence application process takes only a matter of days and involves the completion and lodgement of the application form enclosing:
• Copy of VIPA approval certificate
• Certificate of Incorporation (as appropriate)
Residency Permits: At the time of VIPA application, investors may specify how many residency permits it requires. Generally, the number of permits granted is a function of the number of locals to be employed in the business. Once VIPA approval is obtained (specifying the number of residency permits granted), application can be made to the Department of Immigration (“DOI”) for the residency permits to be issued.
Work Permits: In the VIPA application form, you should also specify how many work permits are required. Then, on approval of the project (and number of work permits) by VIPA, application to the Department of Labour must be made for each annually renewable work permit. The government fee is Vt100,000 per permit. You should note that investors do not require work permits, only their expatriate management and team members.
VAT Registration : The Vanuatu VAT regime is broadly similar to the GST system that prevails in other countries with a consumption tax in that registration is required and a CT number issued. Registration requires completion and lodgement of an application form (together with a copy of VIPA approval certificate, business license and, for a company, it’s certificate of incorporation).
Taxes
Vanuatu has no Income tax, Capital gains tax, Withholding tax or Exchange controls. Furthermore, not only is there no statutory requirement to pay tax on income, but also there is no statutory requirement to report income to any authority.
Ongoing Requirements
Audit: The Vanuatu Companies Act specifies that a company (local or oversea) with turnover in excess of Vt 20,000,000 is required to be audited.
Statutory Returns: The company is required to lodge an annual return with the VFSC up to the end of March each year. The filing fee is Vt30,000.
VIPA: Investors are required to lodge renewal applications for their VIPA approval and possible residency and work permits. We trust that the information contained herein assists your client, however should you require any further information then please do not hesitate to contact this office.
Fees
As you would appreciate, each business is different and it is therefore difficult to give an accurate estimate of fees which applies to all. With our free first consultation, we will be able to give you a quotation as to all fees required to set up business in Vanuatu. We undertake to provide a quality service for reasonable fees – that is our practice and reputation.
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