Starting a Business in Vanuatu: Legal Requirements and Benefits 

• Starting a business in Vanuatu, is an attractive business opportunity with a favorable tax regime and supportive government policies awaits at the door in the tropical archipelago in the South Pacific, Vanuatu. Despite its small economy with a GDP of about US$1 billion, its economy has grown steadily with assistance from tourism, agriculture, and international business activity. Industry value added was set at US$91,744,202 for 2018; however, the projection for GDP growth is to hit 1.9% in 2024 and 2.4% in 2025. 

• The strategic advantage is what starting up a business in Vanuatu provides, especially if it falls under the international trade and financial services departments. The Vanuatu company registration process is also made easier by the Vanuatu Financial Services Commission (VFSC), where services are offered online. In the blog post, we will use the knowledge from Tetra Consultants to explain the registration of companies in Vanuatu and the legal requirements that it entails. 

Benefits of starting a business in Vanuatu 

Tax benefits 

• Vanuatu is a tax haven. There is no income, capital gains, inheritance, or property tax. Corporate tax is also 0%. VAT is at 12.5%. Instead of paying taxes, companies pay an annual fee of $300 for up to 20 years. This way, businesses can reinvest profits and fuel growth and expansion with minimal tax burdens. 

Confidentiality 

• Company owners get excellent privacy in Vanuatu. There is no need to make the public aware of directors’ names, shareholders, or the name of beneficial owners. This might attract businesses to desire secrecy for sensitive information and to keep private operations. 

Favorable business environment 

• The government of Vanuatu encourages foreign investment and makes the process of opening a business relatively simple. This is done through simplified procedures, minimal bureaucracy, and an intention to promote a business-friendly environment. Such an approach can reduce most of the challenges associated with establishing a new venture. 

Low cost of living 

• Compared to most developed countries, the cost of living in Vanuatu is very low. That means fewer operating costs, like salaries, rent, and utilities, for business owners. Such a condition would be more appealing to small companies and start-ups who would look to utilize the resources maximally. 

Good infrastructure 

• Though not as developed as other major economies, Vanuatu has still improved much in infrastructure development. The country has suitable roads, airports, and telecommunications. Improvement in these sectors continues to support business operations and facilitate connectivity. 

No minimum capital requirement 

• Vanuatu does not require a minimum capital for the registration of companies. This makes it very attractive to entrepreneurs who would like to establish their businesses without any capital constraint. Such leniency in capital requirements boosts investment and encourages business development in the region. 

English language 

• One of the advantages of doing business in Vanuatu is that the language used is English, which means that there is no need for translation of the most important business documents. This common language ensures that everything discussed during meetings is clearly understood.  

• Unlike some foreign countries where language barriers can be a challenge to foreigners, doing business in Vanuatu in English provides clarity and ease of interaction. This linguistic convenience makes processes easier and more understandable, henceforth making Vanuatu an attractive venture to most international business ventures. 

Political stability 

• Vanuatu’s political environment has been stable over the years. This is essential for long-term investment and planning in business because it offers assurance to investors to avoid the adverse effects of changes in policy and political upsets that might face their business in the short term. 

No foreign exchange controls 

• No foreign exchange controls exist in Vanuatu, and money can be easily transferred in all major currencies with no reporting requirements. This ensures that capital flows smoothly and increases international trade. 

Legal requirements for starting a business in Vanuatu 

There are various requirements depending on the company structure you have chosen.  

For private company 

• At least 1 shareholder and up to 50 shareholders are allowed without residency requirements. 

• A minimum of 1 resident director is required, which can be complied with Tetra Consultants nominee director and shareholder services. 

• The shares cannot be offered to the public 

• It is mandatory to audit financial statements if turnover exceeds VT 20,000,000 during the year (2 million). 

For public company 

• A minimum of 1 shareholder is required without residency requirements. 

• Minimum 2 directors are required of whom 1 should be a resident director 

• Shares can be issued to the public 

• It is mandatory to have the financial statements audited if annual turnover exceeds VT 20,000,000 (2 million). 

International company 

• They have restrictions on trading within Vanuatu, owning real estate, or holding certain licenses. 

• At least one director and one shareholder without residency requirements. 

• A Vanuatu IC does not need a company secretary. 

• The company will need to have a local registered office address and agent in Vanuatu. 

• No minimum share capital requirement exists for a Vanuatu IC. 

Exempted company 

• At least one director who could be a natural person or corporate entity but be non-resident. 

• The company must have at least one shareholder, who can be a natural person or a corporation and may be non-resident. 

• There should be a registered agent who is aware of the local documents and filing requirements by the government. 

• An exempt company does not need a company secretary. 

• The company has to have an address for the local registered office in Vanuatu. 

• There is no minimum share capital for an exempted company. 

Conclusion 

• Starting a business in Vanuatu with Tetra Consultants comes easy and hassle-free. The tax advantage and the confidentiality assured along with low regulatory requirements make jurisdiction a haven for entrepreneurs and investors alike in the said country of Vanuatu. Our team of experts guides you through every step from offshore company incorporation to corporate bank account opening, ensuring compliance and support for your ongoing business. Our clear and effective methodology can help you to concentrate more on developing your business while letting us do the rest. Partner with Tetra Consultants today to avail of the strategic advantages of Vanuatu for the establishment of your company. 

• Contact us to know more about benefits and legal requirements of starting a business in Vanuatu and our team will revert back in 24 hours.