One of the best tropical island destinations in the South Pacific is the Republic of Vanuatu. What is their secret to success? The Vanuatu tax haven is free from income tax, capital gains tax, wealth tax and all inheritance taxes. It has become the happiest place in the world. Continue Reading→
Indeed, Vanuatu offers a COVID free, relaxed tropical island lifestyle in paradise where you can eliminate all income tax. What more can you ask for? There are a few methods used to enter the Vanuatu paradise, but one of them is most effective. You can be the judge, here is everything you need to know.
Enter the Vanuatu Tax Haven
Prior to 2015, the benefits of Vanuatu tax residency were temporary and only available to foreigners on short term visas. Additionally, this short term solution required frequent renewals every 12 months. As a result, outsiders could come to Vanuatu but they had to live with perpetual uncertainty.
To qualify for tax residency using the temporary method, you needed a local job that no Ni Vanuatu could perform. Alternatively, retirees could qualify with a minimum monthly remittance to the island. Or one could also qualify for an investor’s visa with a minimum USD50,000 invested into a local enterprise.
Nonetheless, your country of origin could still impose their income tax on you. Unfortunately, nobody is safe from the intrusive global tax net of the United States and other developed countries. Plus, not everyone can immediately migrate to this very beautiful but also very isolated tropical island.
The new solution provided by the Vanuatu government is the Vanuatu citizenship by investment program (CIP). Therefore, qualified applicants can now acquire the Vanuatu tax haven benefits without residing on the island, receiving local remittance, investing in a local enterprise or finding local employment.
Vanuatu Tax Haven Benefits
Of all the world’s tax havens, Vanuatu is the easiest tax haven to describe. This is because Vanuatu’s income tax laws can be summed up in two words “No Tax”. Additionally, “No Tax” applies to both individuals and corporations.
- Income Tax 0%
- Capital Gains Tax 0%
- Wealth Tax 0%
- Inheritance Tax 0%
- Business Tax 0%
However, the reality of the situation is that all tax haven governments must have some form of revenue to survive. Indeed, government revenue does provide essential services such as border control, disaster relief, public infrastructure and a stable economy.
It is certainly true that Vanuatu has remained 100% COVID free, so the government does deserve some credit for things like this. Since their efforts would be ineffective without minimal government revenues for necessities, some tax can be justified.
Applicable Local Taxes
Vanuatu imposes an excise tax, import duties and export tax which are kept to a minimum. Their true tax rates can be readily deciphered by visiting the Vanuatu Customs and Inland Revenue Department. As an aspiring Vanuatu citizen, this is what you need to be aware of.
Vanuatu imposed a value added tax (VAT) in 1998 at 12.5%. However, in 2018 it was raised by 2.5% to 15%. Source: Vanuatu Customs and Inland Revenue Department
|Import Duties = Customs Value* x Duty Rate*|
|VAT = (Customs Value + Import Duty) x 15%|
|Total Payment = Import Duty + VAT + VT1,000 Fee|
*Customs Value = cost of goods + freight + insurance, if any.
*Duty rates are available in Customs Tariff.
Excise Tax – Some commodities may also have excise taxes applied per item quantity and weight. Excise is usually used to control certain products such as alcohol, tobacco and fire arms.
Export Duty – Calculated on ad valorem basis derived from FOB value. The exception is timber export calculated at 5% + VT3,000 per cubic meter. At this time, timber and coral are the only two products with export duty.
Invest in Your Future with Vanuatu Citizenship
In 2015, the Vanuatu government established the world renown Vanuatu CIP. As a result, a qualified applicant(s) who makes the prescribed non refundable investment obtains lifetime Vanuatu citizenship.
Essentially, applicants must have no criminal background, legitimate source of funds and a clean bill of health. If so, your new passport can be obtained within 30 days.
How to Qualify for Vanuatu Citizenship
A tremendous benefit of the Vanuatu program is the simplified, all inclusive cost structure. The investment price includes everything. The only other fee that must be submitted is for due diligence and this is only required for the main applicant. Redundancy is eliminated and applicants can save thousands of dollars in processing fees.
|Applicant Categories||Investment Price|
|Married with One Child* ||$165,000|
|Married with Two Children* ||$180,000|
|FIU Due Diligence Fee||$5,000|
*Note: Family members on the application can include the spouse, children below 18, dependent children to age 25 and dependent parents.
Two Step Approval Eliminates Risk of Rejection
Additionally, the government provides a two tier approval process. For step one, the documents are submitted to the Financial Intelligence Unit (FIU) in addition to the $5,000 due diligence fee.
This initial procedure eliminates any risk of the complete file being rejected at a later stage. Therefore, financial exposure is limited to the $5,000 due diligence fee.
|Step One Documents||Step Two Documents|
|Completed and signed DSP form||Medical Certificate|
|Passport Copy (Bio Page, notarized)||6 Color Photos (40mm x 50mm, JPEG file)|
|ID Card or Driving License (notarized)||Birth Certificate (notarized)|
|CV/Personal Profile Summary||Statement of Assets (notarized)|
|Police Clearance Report ||Bank Reference/Statement (main applicant)|
|Employment Verification Letter|
|Marriage Certificate (if applicable)|
|3 Professional references (main applicant)|
|Academic Reference (if applicable)|
After step one is completed, the acceptance letter is received from the FIU (7-10 days). From this point our approval ratio is 100% and applicants can expect smooth sailing for step two. The remaining step two documents are now collected and submitted in addition to the full investment amount.
The Vanuatu Citizenship Commission sits once per month. Depending on what day of the month your complete file is submitted, you could have full approval within 30 days of the initial application date.
Vanuatu Tax Haven for Residents
Now that you are equipped with Vanuatu citizenship, the most direct method to establish tax residency is to simply move there. However, investors must still be wary of holding second citizenship.
Indeed, foreign tax residency will not prevent the United States from taxing their citizens on global income. As a result, renunciation of US citizenship is an essential element of effectively escaping the global tax net.
Additionally, while residing abroad dual citizenship holders can still be taxed on income derived from within their country of origin. Profits from investments in real estate, stocks or other income sources may still be taxable. Therefore, proper tax planning is essential. Developed countries with huge current account deficits are indeed desperate for tax revenues.
What can you do to completely escape the global income tax net? Your options remain limited by holding dual citizenship from the wrong country.
Is it really necessary to maintain dual citizenship? Vanuatu citizens must ask themselves if it is still worth the risk.
Vanuatu Passport Visa Free Countries Map
*includes eVisa and visa on arrival
Vanuatu Tax Haven for Non Residents
Tax haven benefits can work just as well or even better for non resident Vanuatu citizens. Have you renounced citizenship in your country of origin? To reiterate, optimal tax planning is most effective for those who hold one citizenship in a tax haven country and also remain in their country of residence as a long term tourist or visitor.
This allows you to have the equivalent of residency with no income tax obligations. For example, Vanuatu citizenship can be used to obtain the equivalent of long term residency in countries such as Malaysia, Thailand, Singapore or even Portugal. If so, you are free of all overseas income tax.
Do what is necessary to acquire the visa. This can be a limited expense with huge benefits! As a non resident, non citizen you have no personal income tax obligations unless it is sourced locally.
Time is of the Essence!
My partners and I have 35+ years of experience working with the Caribbean citizenship by investment programs plus Vanuatu. As a result, we are well integrated with the government agencies in addition to local property developers.
Our objective is to give you the necessary tools to receive the tax haven benefits that you deserve. We will do it at the lowest cost in the most efficient manner.
The solutions we offer are time tested. Additionally, we have walked in your shoes to successfully achieve second citizenship. Work with us and your country of origin will no longer remain as a tax liability.
Protect your assets, your wealth and your future! Contact me today to begin your journey to global citizenship.
Email: [email protected]
Post Citizenship Services
Vanuatu does not have any income taxes, but just the same they offer tax identification numbers (TIN) for new citizens. Therefore, new citizens can seamlessly open new accounts with banks and other financial institutions in Common Reporting Standard (CRS) signatory jurisdictions.
Note that the United States government is not a signatory of the CRS. Therefore, do not confuse the CRS with FATCA or FBAR. US notwithstanding, many countries do participate in CRS as a common reporting standard to eliminate tax evasion. This includes the majority of legitimate tax haven countries such as Vanuatu.
Furthermore, we can help you to obtain a Vanuatu ID card and proof of address in Port Vila. Are you interested in company formation or offshore banking? Our post citizenship services are all inclusive and we are happy to assist.