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Is The Vanuatu Citizenship By Investment Program Right For You

3 min read

Is The Vanuatu Citizenship By Investment Program Right For You

Vanuatu is an archipelago of 83 islands in the South Pacific Ocean consisting of 12,274 square kilometres (about half the size of Wales), although most of that is water. Modern Vanuatu declared its independence from England and France in 1980, the cumulation of a long period of decolonization. Vanuatu has many tropical forests but is surprisingly tame when it comes to the biodiversity of land animals. 

That being said, there are a number of species indigenous to the islands, including the Vanuatu flying fox. On the other hand, there is a rich variety of marine life, and there are even rumoured to be a few saltwater crocodiles lurking about.

The climate is quite idyllic, ranging between 22 and 30 degrees centigrade. Summer lasts for nine months, and then you have a brief period of slightly cooler weather. There are three official languages, Bislama, English, and French, although there are an additional 113 languages indigenous to the region spoken there as well. Vanuatuan cuisine is heavily focused on fish and vegetables, and fresh fruit is widely enjoyed as well. 

Unfortunately, Vanuatu is plagued by natural disasters. Considered the world’s most at-risk country for natural hazards, Vanuatu regularly experiences earthquakes, cyclones, landslides, and tsunamis. Vanuatu lies on the ring of fire, the meeting point of two tectonic plates, which is the underlying cause of all this activity.

 

VANUATU development support program

The modern Vanuatu citizenship by investment program originated in 2017, but on record, Vanuatu actually started offering second passports as early as 1997. 

The latest program, known as the Vanuatu Development Support Program, offers citizenship to individuals around the world at a relatively inexpensive price. The goal of this program was to attract foreign revenue, as well as to stimulate the economy and create jobs. Vanuatu has an extremely underdeveloped economy, and the Vanuatu Citizenship by Investment program is the primary source of revenue for the Vanuatu government.

One of the selling points of the Vanuatu Development Support Program was that anyone was welcome. However, this has created some controversy, as Vanuatu passports were allegedly sold to wanted criminals, like the Cajee brothers from South Africa, who ran a Bitcoin exit scam stealing billions of dollars in cryptocurrency from investors. Other individuals with criminal histories have also managed to obtain Vanuatuan passports, like disgraced Turkish businessman Hayyam Garipoglu and Gianluigi Torzi from Italy, giving rise to questions about the ability of Vanuatu to do due diligence checks when it comes to vetting Citizenship by Investment applicants.

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Map of Vanuatu

Map of Vanuatu

TAX IMPLICATIONS OF VANUATUAN CITIZENSHIP

Vanuatu is a tax haven. There are no taxes on income (for individuals and for corporations, except you must pay tax on rental income), capital gains, inheritance, or gifts. There is a VAT of 12.5%, so it’s not quite perfect. A lot of the people in Vanuatu live through subsistence agriculture and fishing, so there isn’t really much point in having a modern tax system there. And actually, Vanuatu’s status as a tax haven plays an important role in its overall economy, attracting foreign investment and high-net-worth individuals who are sick of paying taxes.

 

Vanuatu Vatu

Vanuatu Vatu

APPLICATION PROCESS

The application process is fairly straightforward. With the traditional Vanuatu citizenship by investment program, you are looking at a minimum cost of $130,000 USD to $180,000 USD or more if you have a big family. You also have to demonstrate financial solvency to the tune of $250,000 USD in assets. 

  • $130,000 USD for a single individual
  • $150,000 USD for you and your spouse
  • $165,000 USD for a family of three 
  • $180,000 USD for a family of four. 
  • $10,000 USD for additional dependents

Once you give proof of your financial solvency, you must show proof of a clean criminal background. There is also a $5,000 USD application fee, which is non-refundable. Once you pass the check, you submit all of your documentation and apply for citizenship. You won’t have to wait long, the Vanuatu government relies heavily on its CBI program for revenue, and applications are processed very quickly. Usually, the wait is about a month or two. Once you are approved, there is a citizenship ceremony, and you get your passport. In fact, as of 2021, and because of the pandemic, you didn’t even need to go to Vanuatu for the ceremony but could do the whole thing over teleconferencing. 

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Port Vila, Vanuatu 

Port Vila, Vanuatu 

BENEFITS OF VANUATU CITIZENSHIP

  • Vanuatu is a tax haven. There is no income tax or corporate tax, and Vanuatu has the lowest taxes in the world. No capital gains tax. No wealth tax. Nothing.
  • It is literally an island paradise. Pleasant climate, warm all year round. Great place to live.
  • No residency requirements. Stay or go as you please. Nobody cares.
  • No language requirements. French and English are the dominant languages spoken there anyway.
  • Hereditary citizenship for any children you might have.
  • Currently, as of this writing, you will have visa-free access to 98 countries. (When the EU opens back up in the Spring of 2023, they will have visa-free access to 132)
  • Minimal cost for citizenship compared to other CBI programs.

 

Coral Reefs in Vanuatu

Coral Reefs in Vanuatu

an uncertain future

There are some rumours about the closure of the Vanuatu citizenship by investment program. The E.U. has temporarily suspended visa-on-arrival benefits for Vanuatuan citizens on account of rumours that international fugitives have been granted Vanuatuan citizenship. The Vanuatuan government had not been doing its due diligence on vetting citizenship by investment applicants. At the moment, visa-free travel for Vanuatuan citizens to the E.U. has only been suspended until February 2023, but this backlash has threatened the survival of Vanuatu's citizenship by investment program. Other countries are also considering revoking Vanuatuan visa-exempt privileges. So if you are counting on a Vanuatuan passport to see the world, you may want to reconsider or at least see if the efforts on the part of the Vanuatuan government to clean up their act bear fruit.

 

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Mikkel Thorup

Written by Mikkel Thorup

Mikkel Thorup is the world’s most sought-after expat consultant. He focuses on helping high-net-worth private clients to legally mitigate tax liabilities, obtain a second residency and citizenship, and assemble a portfolio of foreign investments including international real estate, timber plantations, agricultural land and other hard-money tangible assets. Mikkel is the Founder and CEO at Expat Money®, a private consulting firm started in 2017. He hosts the popular weekly podcast, the Expat Money Show, and wrote the definitive #1-Best Selling book Expat Secrets - How To Pay Zero Taxes, Live Overseas And Make Giant Piles Of Money, and his second book: Expats Guide On Moving To Mexico.

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