Vanuatu tax system: attractive conditions for foreign investors from IST Hungary

The Vanuatu government actively seeks to attract foreign investors by offering them favorable tax conditions. There are no income, inheritance, capital gains or capital export taxes for individuals. In addition, legal entities can also benefit from special tax incentives.

Tax conditions in Vanuatu are the same for both residents who live in the country for more than 183 days a year and for non-residents – citizens of Vanuatu who spend most of their time outside the country. Individuals are effectively exempt from most taxes, including taxes on income, real estate ownership and property. They do not pay taxes on wealth, inheritance, capital exports and capital gains.

As for Value Added Tax (VAT), in Vanuatu it is already included in the cost of goods and services and is 12.5%. For comparison, in Russia the VAT rate is 20%.

The government also creates favorable conditions for legal entities. Companies registered in Vanuatu may not pay taxes for the first 20 years of their activity. Instead, they pay a fixed annual fee of $300.

Taxes for legal entities in Vanuatu:

• Income tax: 0%
• VAT: 12.5%
• State duty: from 300 to 1000 dollars
• Pension fund contributions: 6%

Real estate taxes:

Owning real estate in Vanuatu is tax free, but there are taxes on real estate transactions. When buying, changing ownership or renting a property, a tax ranging from 2% to 12% must be paid.

The list of property taxes includes:

• Stamp Duty: 5%
• Registration Fee: 2%
• Tax on rental income: 12.5%
• VAT on purchase of commercial real estate: 12.5%

Rental income tax is levied twice a year on the amount exceeding 200,000 Vatu (approximately 1700 dollars). For example, if the rental income is 300,000 Vatu for a six-month period, tax will only be levied on the amount exceeding 200,000 Vatu.

Tax reporting and confidentiality

Owners of international companies are required to maintain accounting records and capital controls, but are not required to file reports with the government. Vanuatu guarantees data protection of its businessmen and ensures confidentiality of banking transactions.

It is also worth noting that Vanuatu complies with international standards for combating illegal income and has double taxation agreements with a number of countries, including Australia and France.

Citizenship for investment

Finally, Vanuatu offers an attractive citizenship through investment program. Investors can obtain a passport in just one month, which makes this country particularly attractive for those looking for new business and life opportunities.

IST Hungary is happy to help you understand the investment opportunities in Vanuatu and choose the best solutions for your business!

With a Vanuatu passport you can travel visa-free to 95 countries, including the UK. Vanuatu citizenship also makes it easier to obtain visas to travel to the USA, Canada and Australia.

Basic requirements for filing an application

1. The applicant must be at least 18 years of age.
2. No criminal record and no serious illnesses.
3. The minimum investment amount is 130,000 US dollars.
4. There must be at least 250,000 USD in the bank account.

Citizenship may also be granted to close relatives of the applicant, including:

• spouse;
• children under the age of 18, as well as children under the age of 25 who are studying at university and are financially dependent on
• the investor;
• parents over the age of 50.

The investor directs their funds to the Vanuatu National Development Fund and all proceeds from this fund are used to improve the economy of Vanuatu.

Frequently Asked Questions: