Bank Accounts website
Flag Theory website

Vanuatu

Foundation

Vanuatu foundations are legal entities established under the Foundations Act No. 24 of 2009. This legislation introduced a civil-law style legal vehicle into Vanuatu’s primarily common-law system, offering an alternative to traditional trusts and companies. A foundation in Vanuatu is a hybrid structure—it possesses the legal personality of a company while serving the asset protection and succession planning functions commonly associated with trusts.

Foundations are particularly suitable for asset preservation, estate planning, charitable purposes, and long-term wealth management. Their establishment and operation are regulated by the Vanuatu Financial Services Commission (VFSC), the authority responsible for oversight of non-banking financial entities in the jurisdiction.

A Vanuatu foundation is a separate legal person, distinct from its founder, beneficiaries, or officers. This distinguishes it from a trust, which relies on a fiduciary relationship and does not constitute a legal person in its own right.

The core structural components of a foundation include:

  • Founder: The individual or legal entity that establishes the foundation and contributes initial assets. After establishment, the founder typically ceases to have ownership or control over the assets, though certain reserved powers may be specified in the charter or bylaws.
  • Council: The governing body of the foundation, responsible for its management and decision-making. The council may consist of individuals or corporate bodies and need not be resident in Vanuatu.
  • Beneficiaries: These may be specified persons, a class of persons, or purposes (charitable or otherwise). Beneficiaries do not hold legal title to the assets, and depending on the foundation’s structure, may or may not have enforceable rights.
  • Registered Agent: All foundations must appoint a licensed registered agent in Vanuatu, who is responsible for maintaining records and ensuring regulatory compliance.
  • Secretary (optional): Foundations may, but are not required to, appoint a secretary to handle administrative duties.

Vanuatu foundations may be established for a wide range of lawful purposes, including:

  • Private wealth management – for holding and preserving family assets across generations;
  • Succession planning – especially useful in jurisdictions where forced heirship rules might otherwise apply;
  • Charitable or philanthropic activities;
  • Corporate structuring – as holding entities or special-purpose vehicles.

Importantly, foundations are not permitted to carry on commercial business activities, unless such activities are incidental to their primary purpose or are conducted through underlying entities (e.g., subsidiaries). This limitation aligns with their role as asset-holding and managing entities, rather than as trading bodies.

A primary advantage of the Vanuatu foundation structure lies in its robust asset protection features. Once assets are transferred to the foundation, they cease to be the property of the founder and become the property of the foundation itself. This separation can shield assets from personal creditors of the founder, provided the transfer is not made with the intent to defraud.

Additionally, Vanuatu does not recognize foreign judgments relating to forced heirship, making the foundation a viable tool for succession planning in cross-border estate arrangements. The founder may designate successors, impose restrictions or conditions on distributions, and customize the governance model to ensure intergenerational continuity.

Vanuatu law provides a high degree of confidentiality for foundations. While the foundation’s charter is filed with the VFSC and available on public record, other documents—such as the bylaws, details of beneficiaries, and internal resolutions—are not publicly disclosed.

Foundations must maintain accounting records that are sufficient to show the financial position of the foundation. However, there is no requirement to file annual financial statements or tax returns with the VFSC, except in the context of compliance with anti-money laundering (AML) and economic substance legislation.

Vanuatu imposes no income tax, capital gains tax, inheritance tax, or estate duties, either at the foundation or beneficiary level. This favorable tax treatment enhances the attractiveness of the foundation structure for international asset planning.

A foundation may be dissolved in accordance with the provisions of its charter or bylaws, or by order of the court in cases of illegality or impracticality of purpose. Upon dissolution, the assets are distributed in accordance with the foundation’s charter or, if silent, in accordance with the instructions of the council or a supervising court.

Foundations may also be voluntarily terminated if their purpose has been achieved or is no longer capable of being fulfilled.

Vanuatu foundations are used in a range of contexts, including:

  • Estate and succession planning for families with international ties;
  • Asset holding vehicles for passive investments, real estate, or intellectual property;
  • Philanthropy and charitable giving structures;
  • Governance tools for family offices or private groups wishing to separate control and benefit.

Their flexible governance structure, separation of legal ownership, and limited public disclosure requirements make them a strategic vehicle for those seeking continuity, control, and confidentiality.

Vanuatu foundations offer a versatile legal framework for the protection, administration, and transfer of wealth. While not designed for active commercial enterprise, they serve a critical role in non-operational asset structuring and succession planning. 

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.

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% Corporate 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
  • 12.5% VAT Rate
  • 14 Tax Treaties

Country details

Vanuatu
VUV
Port Vila
Oceania
bi, en-VU, fr-VU
221,552

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.

Tax treaties

Country Type Date Signed
Denmark TIEA 2010-10-13
New Zealand TIEA 2010-08-04
Norway TIEA 2010-10-13
Faroe Islands TIEA 2010-10-13
France TIEA 2009-12-31
Sweden TIEA 2010-10-13
Grenada TIEA 2011-05-31
Ireland TIEA 2011-05-31
Australia TIEA 2010-04-21
Korea, Republic of TIEA 2012-03-14
San Marino TIEA 2011-05-19
Iceland TIEA 2010-10-13
Finland TIEA 2010-10-13
Greenland TIEA 2010-10-13

Tax treaties Map

>

Services

We can help you incorporate a Foundation in Vanuatu.
Please, contact us for further details.


Disclaimer

Although we use our best efforts to keep the information of this site accurate and up-to-date, we make no representations or warranties with respect to the accuracy, applicability, fitness, or completeness of the contents of this website. We disclaim any warranties expressed or implied, merchantability, or fitness for any particular purpose. We shall in no event be held liable for any loss or other damages, including but not limited to special, incidental, consequential, or other damages. The contents of this website are just for illustrative purposes and are NOT to be considered as a legal opinion or tax advice and should not be relied upon as such. Far Horizon Capital Inc., and any associated company, is not engaged in the practice of law or tax. If you wish to receive a legal opinion or tax advice on the matter(s) in this website please contact our offices and we will refer you to an appropriate legal practitioner. Use of our websites FlagTheory.com, Incorporations.io, Residencies.io, Passports.io, is subject to our terms and conditions.

Newsletter

Flag Theory is an internationalization and offshore solutions provider, and the creator of incorporations.io. We offer expert consultation advice and assistance.

Your privacy is important for us and we will keep your information secure. View our privacy policy

View past newsletters

Consultation with

Flag Theory is an internationalization and offshore solutions provider, and the creator of incorporations.io

In order to better serve you, we ask that you please fill out the following form as accurately as you can and provide as many details as possible. Thank you.

Your privacy is important for us and we will keep your information secure. View our privacy policy