Vanuatu

Vanuatu is comprised of a group of islands in the South Pacific Ocean, about three-quarters of the way from Hawaii to Australia. Multiple waves of colonizers, each speaking a distinct language, migrated to the New Hebrides in the millennia preceding European exploration in the 18th century. This settlement pattern accounts for the complex linguistic diversity found on the archipelago to this day. The British and French, who settled the New Hebrides in the 19th century, agreed in 1906 to an Anglo-French Condominium, which administered the islands until independence in 1980, when the new name of Vanuatu was adopted.

Vanuatu has been operating as a financial center since 1971. Accordingly, compared to many relatively new offshore jurisdictions, its service providers possess an exceptional level of investment, banking, accounting, and legal expertise. Most providers are members of the Vanuatu Finance Centre Association. Association members may offer advice on investments, business licenses, immigration permits, and local company incorporations.

Vanuatu has no tax on income, capital gains, gifts, or estates. Moreover, it has no tax treaties with other countries and, as such, no exchange of information with foreign governments. Vanuatu companies are guaranteed no taxes, duties, or exchange controls for 20 years pursuant to the Vanuatu International Companies Act. Accordingly, Vanuatu is an ideal jurisdiction for international holding companies. Companies operating in various jurisdictions around the world may be funded by loans from the parent company so that the subsidiaries may benefit from tax deductions on interest paid. Many other benefits may be realized by using this structure including tax free retained earnings and interest margins.

In addition to its favorable corporate legislation, Vanuatu is a leader in captive insurance. It offers one of the most efficient and stream-lined processes for establishing an offshore captive insurance company. Vanuatu insurance companies may be registered as local, external, or exempted. Most captive insurance companies are registered as "exempt" in order to avoid taxation. However, exempt companies are forbidden from insuring risks within Vanuatu or soliciting business. Exempt companies must have a resident director, file annual returns, and hold annual meetings. The captive insurer may either underwrite 100% of the risk, or may reinsure, either partially or wholly, through third party underwriters.

Vanuatu and Samoa are currently my preferred countries of banking licenses. Vanuatu offers a full service offshore banking license and an efficient application process with corporate capital of at least $500,000. An approved bank may offer checking accounts and credit cards, and is guaranteed tax free status. Annual government fees are currently US$10,750.

NOTE: The corporate capital above is the minimum allowed by each government’s Banking Act. The final requirement may be significantly higher, depending on the intentions of the bank.