Vanuatu
International Company (Company limited by shares)
Vanuatu is a pure tax haven, there are no direct taxes both for individuals and corporations.
Company law in Vanuatu is based in English Common Law. Companies in Vanuatu are governed by the Companies Act, except International Companies, the most common offshore entity, which is governed by the International Companies Act. This type of company offers more flexibility and easier administration.
Companies registered under the International Companies Act are entitled to do international business and may have restrictions to trade within Vanuatu, own a real estate interest within the territory, except the lease of an office where it conducts its management, and hold banking, trust or insurance licenses.
Offshore companies in Vanuatu are guaranteed to be fully tax-exempt for 20 years, and only subject to an annual fee of USD 300. Companies may elect to be long term entities and pay renewal fees of USD 1,000 (5-year company), USD 1,500 10-year company) and USD 2,500 (20-year company).
The name of the company must include a word or abbreviation that denotes limited liability, such as Ltd., Corp., Inc., S.A., S.R.L., B.V., Sdn Bhd, GmbH, … etc. The name can be in any language.
It can not include any words that refer to financial services, such as trust, bank or insurance, or words that relate to a public institution or words such as Foundation or Charity.
ICs may be formed by one or more shareholders, one or more directors, who may be juristic or natural persons. Directors may be residents or non-residents. Nominee directors and shareholders are commonly used.
Details of beneficiaries, shareholders, directors of a Vanuatu offshore company are not publicly disclosed. There are no annual meeting requirements, and meetings may be held outside Vanuatu by a call, video call or any other mean.
ICs must have a registered office and a local registered agent. Appointment of a secretary is not mandatory, and the secretary may or may not be in Vanuatu.
The issued minimum capital is a share with or without par value. Shares may be issued with or without voting rights, nominative, bearer, preferred and redeemable.
Vanuatu offshore companies may be subject to a solvency test, directors must ensure that any distribution does not affect the company’s capability to meet its liabilities, failure to comply with it may carry directors’ personal liability.
International Companies may be required to keep financial records, but may not be required to file accounts and annual returns.
Vanuatu has implemented the OECD’s automatic exchanges of information (AEOI) through the CRS (Common Reporting Standard).
A Vanuatu international company is commonly used for holding tangible and intangible assets, asset protection and confidentiality, gaming, estate planning, trading, securities dealer, holding vessels, among others.
Legal
Country code – VU
Legal Basis – Common law
Legal framework – International Companies Act, 1992 (As Amended)
Company form – International Company (Company limited by shares) (LTD)
Liability - The liability of a shareholder to the company is limited to any amount unpaid on a share held by the shareholder.
Business restrictions – Companies registered under the International Companies Act are entitled to do international business and may have restrictions to trade within Vanuatu, own a real estate interest within the territory, except the lease of an office where it conducts its management, and hold banking, trust or insurance licenses.
Share capital – There is no minimum capital required. The authorized share capital is usually USD 10,000 and it may be in any currency. The issued minimum capital is a share with or without par value. Shares with or without par value, shares with or without voting rights, nominative, bearer, preferred and redeemable shares may be issued.
Shareholders – The company may be formed by a minimum of 1 shareholder, who can be an individual or a corporation and may be non-resident. Details of the shareholders are not disclosed on a public file.
Directors – At least one director is required, who may be a natural person or a legal entity and may be non-resident. Details of the directors are not disclosed on a public file.
Secretary – The appointment of a secretary is optional, who can be either a legal or natural person and may be non-resident.
Registered Address – International companies shall at all times have a registered agent, who has been granted a license to provide registered agent services by the Financial Services Commission. A company must have a registered office in Vanuatu, provided by the registered agent.
General Meeting – Annual general meetings are not mandatory and can be held anywhere. Meetings can be held by telephone or other electronic means; alternatively, directors, as well as shareholders, may vote by proxy.
Electronic Signature – Permitted.
Re-domiciliation – A foreign entity can continue as a Vanuatu IC, and viceversa.
Compliance – International companies must prepare annual accounts, but there is no requirement to file them, nor annual return, nor taxa return, to any authority. Audits are not required.
- Shareholders not disclosed
- Directors not disclosed
- Corporate shareholders permitted
- Corporate directors permitted
- Local director required
- Secretary required
- Local secretary required
- Annual general meetings required
- Redomiciliation permitted
- Electronic signature
- Annual return
- Audited accounts
- Audited accounts exemption
- Exchange controls
- Mixed (Customary, French civil and Common) Legal basis
- 1 Minimum shareholders
- 1 Minimum directors
- USD 1 Minimum issued capital
- - Minimum paid up capital
- USDAny Capital currency
- Anywhere Location of annual general meeting
- 2018 AEOI
Taxes
Vanuatu does not levy corporate and individual income taxes, no dividend distribution taxes, no capital gains taxes, no withholding taxes, no estate and inheritance taxes, and there are no foreign exchange controls.
Furthermore, companies incorporated under the International Companies Act of Vanuatu are guaranteed to be fully tax-exempt for 20 years.
The only applicable taxes are a value-added tax of 12.5%, stamp and custom duties, with certain exemptions in sectors such as Tourism, Manufacturing or processing and Mineral exploration.
- Offshore Income Tax Exemption
- Offshore capital gains tax exemption
- Offshore dividends tax exemption
- CFC Rules
- Thin Capitalisation Rules
- Patent Box
- Tax Incentives & Credits
- Property Tax
- Wealth tax
- Estate inheritance tax
- Transfer tax
- Capital duties
- 0% Offshore Income Tax Rate
- 0% Capital Gains Tax Rate
- 0% Dividends Received
- 0% Dividends Withholding Tax Rate
- 0% Interests Withholding Tax Rate
- 0% Royalties Withholding Tax Rate
- 0 Losses carryback (years)
- 0 Losses carryforward (years)
- 0% Personal Income Tax Rate
- 14 Tax Treaties
Country details
The Republic of Vanuatu is a former English-French protectorate, made up by an archipelago of 83 islands of volcanic origin surrounded by coral reefs, covering more than 12,000 sq. km of the South Pacific Ocean. Located 1750 km from Australia, 500 km northeast of New Caledonia, west of Fiji and south of the Solomon Islands, near New Guinea.
The islands are inhabited by 267,000 inhabitants. Port Vila is the capital, the most populated city, and the economic and commercial center.
Port Vila is located in Efate Island (the third largest of the archipelago), which has the most important port and airport of the country.
Its official languages are Bislama, French, and English. Its official currency is the Vanuatu Vatu (VUV).
The government and politics of Vanuatu take place within the framework of a multi-party representative parliamentary democratic republic, in which the Prime Minister of Vanuatu is the head of government and the President of Vanuatu is the head of state.
The country is one of the most underdeveloped in the region, with a per capita income that barely reaches USD 3,000 annually and a very unequal distribution of wealth, with much of the population devoted to subsistence agriculture.
It has a fragile economy, with inherent economic difficulties, is remote and isolated, facing heavy transport costs, is prone to natural disasters and is heavily dependent on foreign investment, tourism and commodities price fluctuations.
Tourism is its largest sector, accounting for half of GDP. Agriculture and fisheries are the second largest, about a quarter of its economy. Its main exports are copra, coconut oil, kava, beef, timber, cocoa and coffee, and destined to Australia, New Zealand and Japan.
The Government plays an important role in the country’s economy. There are more than a dozen state-owned enterprises in such important economic areas as airports, banking, agriculture, and broadcasting.
Vanuatu has been an offshore financial center for more than 40 years. The sector contributes almost one-tenth of GDP. With well-developed banking and financial infrastructure, international financial institutions, professional lawyers, accountants and financial advisors, including multinational firms.