Investing in Vanuatu

The overall aim of the Government policy is to create and foster economic growth. To date, the government of Vanuatu have achieved a track record of reasonably sound economic management with an emphasis on financial stability.

Vanuatu encourages foreign investment, and to do so the Government enacted a Foreign Investment Act 1998 to create a favourable environment for private sector investment.

The Act provided for the establishment of the Vanuatu Investment Promotion Authority (VIPA) which encourages the formulation of a transparent and open investment environment as well as faster processing of the investment applications.

For example we understand that investments in developments that are likely to create local employment are sometimes provided with an import duty discount or exemption.

Taxation

Vanuatu has no income or capital gains taxes. Tax revenue extends from:

  • (a) Import duties- which can be considerable and result in imported goods being very expensive.
  • (b) 12.5 % Value Added Tax (VAT) on goods and services. This is equivalent of the GST collection system in Australia and New Zealand.

Economic development is hindered by dependence on relatively few commodity exports, vulnerability to natural disasters and long distances from main markets and islands.