Vanuatu

Vanuatu's case rests on one unusually clean fact: there is no direct taxation. No personal income tax, no corporate tax, no capital gains tax, no withholding tax, no death duties. The state raises revenue through a 15% VAT and import duties. For a holding structure or an operating business generating profit in-country, that changes the after-tax model rather than trimming it at the edges.

There are no exchange controls, and money may be repatriated without restriction. The islands sit a few hours' flying from Brisbane, Sydney, Auckland and Nadi, and Port Vila's Bauerfield International Airport carries direct services from Australia and New Zealand — the Brisbane–Port Vila route alone adds around 150,000 seats a year.

The commercial opportunity is concentrated in tourism, agriculture and the blue economy. Over 70% of the country's hotels and resorts are in Port Vila, more than 60% of visitors arrive from Australia, and agriculture contributes roughly 20-25% of GDP while employing over 60% of the population — a combination that makes agri-tourism a genuine rather than a marketing category. Yachting is small but measurable: 376 yachts visited in 2023, spending VUV 580m (about US$4.9m) directly.

GDP of roughly US$1.35bn across about 335,000 people, or some US$4,000 per head. Tourism and agriculture dominate; copra, coconut oil, kava, cocoa, beef, coffee and sawn timber are the main exports, and imports run at a high share of GDP.

Foreign direct investment is modest in absolute terms — net inflows of around US$28.9m in 2024 — but it carries disproportionate weight, accounting for roughly a third of formal employment. Australia is the largest source, followed by New Zealand and Japan.

No direct taxes at all. No personal income tax, no corporate income tax on either local or offshore income, no capital gains tax, no withholding tax, no gift tax and no death duties.

VAT is 15% and, with import duties, is the main indirect burden.

Rental income is taxed at 15% where it exceeds VT 200,000 in a six-month period.

Stamp duty of up to 1% applies to property transactions and share transfers, subject to a VT 2,500 minimum.

No exchange controls. Funds may be repatriated without withholding.

With no corporate tax to forgive, Vanuatu's incentives work through duties and process rather than tax holidays:

• Duty exemptions for tourism operators, new and existing, on imported tourism-related goods — building materials, fixtures, equipment, furnishings, boats, and facilities such as gyms.
• Tax and duty reductions for qualifying agricultural activities, including operators importing tourism-related goods under agri-tourism ventures.
• Streamlined temporary permits for new projects, and permit facilitation through VFIPA with government departments.
• Aftercare and policy advocacy from VFIPA once a project is operating, and online investment registration and licensing.

Support is framed by the Sustainable Tourism Policy 2019-2030 and Vanuatu's People's Plan 2030, both of which favour projects that employ local communities and protect natural environments — worth reflecting in a proposal, since it is the stated basis on which support is given.

All land in Vanuatu is leasehold. There is no freehold for foreigners. The Constitution caps a lease at 75 years, renewable. A foreign investor needs a certificate to negotiate under the Land Reform Act, and the lease must be registered with the Vanuatu Lands Registry to be protected. Treat the lease term, not a notional freehold, as the asset life in any model.

Foreign investment is governed by a Reserved List of activities open only to Ni-Vanuatu citizens and a Restricted List of sectors open to foreigners on conditions. Both lists have been under review by VFIPA. Check the current lists against the intended activity before committing — this is the most common reason a Vanuatu structure has to be redrawn.

The Foreign Investment Act established the Vanuatu Foreign Investment Promotion Agency in place of the former Vanuatu Investment Promotion Authority, moving foreign investment from a permitting regime to registration with annual investor surveys.

Vanuatu operates a Development Support Programme granting citizenship by contribution, and has added a real estate route. As with any such programme, treat citizenship and project approval as separate workstreams.

Natural disaster exposure is the dominant risk. Vanuatu ranks among the most disaster-prone countries in the world — cyclones, earthquakes and volcanic activity. Reinstatement cost, insurance availability and build standard are not sensitivities here; they are the base case.

Infrastructure and isolation. Power, water and logistics outside Port Vila and Luganville are thin, and distance from major markets raises freight costs on anything exported.

Scale and skills. A market of 335,000 spread across 83 islands, with a shallow pool of specialised labour.

Regulatory change. The Reserved and Restricted Lists have been under active review, and the shift from VIPA to VFIPA is recent. Confirm the current position rather than relying on older guidance.

VFIPA — the Vanuatu Foreign Investment Promotion Agency — is the gateway for foreign investment enquiries, pre- and post-investment, and provides its services free of charge.

The usual sequence is: confirm the activity against the Reserved and Restricted Lists, register the foreign investment with VFIPA, incorporate, obtain a certificate to negotiate and register a lease if land is required, then apply for sector licences and any duty concessions.