Forming A Company In Vanuatu: Complete 2025 Guide

Published on September 29, 2025 and written by Cyril Jarnias

Vanuatu, a tropical archipelago in the South Pacific, has become a prime destination in recent years for international entrepreneurs and investors seeking advantageous tax opportunities. With its business-friendly regulatory framework and attractive tax system, Vanuatu offers an environment conducive to the creation and development of offshore companies. In this article, we will explore in detail the benefits and procedures for setting up a company in Vanuatu, as well as practical considerations for successfully carrying out your entrepreneurial project in this lesser-known tax haven.

Vanuatu’s Advantages for Business Establishment

Vanuatu offers numerous advantages that make it a preferred destination for offshore company formation:

Extremely favorable tax regime: Vanuatu stands out with the complete absence of income tax, corporate tax, capital gains tax, and inheritance tax. This zero-tax policy makes the country one of the world’s most attractive tax havens.

Flexible and business-friendly regulatory framework: Vanuatu’s legislation offers great flexibility for company formation and management, with simplified procedures and minimal financial reporting requirements.

Political and economic stability: Despite its small size, Vanuatu enjoys remarkable political stability and a growing economy, providing a safe environment for foreign investments.

Modern and confidential banking system: The country has a developed banking sector, offering quality financial services and a high level of confidentiality for international transactions.

Strategic location: Situated at the crossroads of Asia-Pacific, Vanuatu offers privileged access to the region’s emerging markets.

Main Available Legal Structures

Vanuatu offers several types of legal structures adapted to foreign investors’ needs:

International Company (IC)

The International Company is the most popular legal form for offshore businesses in Vanuatu. It features the following characteristics:

• Complete tax exemption on profits earned outside Vanuatu
• High confidentiality: shareholder and director names are not made public
• Minimum required capital: 1 USD
• Possibility to have a single shareholder and a single director
• No requirement to maintain accounting records or file annual accounts

Limited Liability Company (LLC)

The Vanuatu LLC offers an interesting alternative, combining the advantages of corporations and partnerships:

• Limited liability for members
• Flexibility in management and profit distribution
• No minimum capital requirement
• Possibility to have a single member

Trust

Vanuatu also has favorable legislation for trust creation, offering:

• Effective asset protection
• High confidentiality
• Tax benefits for estate planning

Ultra-Competitive Corporate Taxation

Vanuatu’s tax regime is one of the most advantageous in the world for businesses. Here are the main aspects to remember:

Corporate tax: The corporate income tax rate is 0%, whether for locally or internationally generated income.

Value Added Tax (VAT): A 12.5% VAT applies to most goods and services, but offshore companies are generally not subject to it for their international activities.

Withholding tax: There is no withholding tax on dividends, interest, or royalties paid to non-residents.

Capital gains tax: Capital gains realized by companies are completely tax-exempt.

Customs duties: Customs duties apply to certain imports, but generally at low rates.

Tax treaties: Vanuatu has not signed any double taxation treaties, which can be an advantage for certain international tax optimization structures.

It’s important to note that despite this very favorable taxation, Vanuatu has committed to respecting international standards regarding tax transparency and anti-money laundering. Companies must therefore comply with certain reporting and due diligence obligations.

Setting Up Your Company in Vanuatu: Practical Guide

Setting up a company in Vanuatu is a relatively simple and quick process. Here are the main steps to follow:

1. Choose a Company Name

Start by checking the availability of your desired name with the Vanuatu Financial Services Commission (VFSC). The name must end with “Limited”, “Ltd.”, “Corporation”, “Corp.”, “Incorporated” or “Inc.”.

2. Prepare Incorporation Documents

You’ll need to draft the company’s articles of incorporation (Memorandum and Articles of Association). These documents define the company’s structure and operations.

3. Appoint Directors and Shareholders

Identify the company’s directors and shareholders. For an International Company, a single director and a single shareholder are sufficient, and they can be the same person.

4. Choose a Local Registered Agent

Vanuatu law requires every company to have a local registered agent. This agent will be responsible for communications with local authorities and the administrative management of the company.

5. Submit Registration Application

• Company registration application form
• Company articles of incorporation
• Information about directors and shareholders
• Proof of payment of registration fees

6. Obtain Certificate of Incorporation

Once your application is approved, the VFSC will issue a certificate of incorporation, marking the official birth of your company.

7. Open a Bank Account

After incorporation, you can open a bank account for your company, either with a local bank or an international bank.

The complete process generally takes between 1 and 2 weeks, depending on the complexity of your structure and the responsiveness of local authorities.

Vanuatu Compared to Other Offshore Jurisdictions

To better appreciate Vanuatu’s advantages, it’s interesting to compare it to other popular offshore jurisdictions:

Vanuatu vs Cayman Islands: – Taxation: Both offer zero taxation, but the Cayman Islands have a more established reputation. – Costs: Vanuatu is generally less expensive in terms of incorporation and maintenance fees. – Confidentiality: Vanuatu offers a higher level of confidentiality.

Vanuatu vs Belize: – Political stability: Vanuatu is considered more politically stable. – Banking services: Belize offers a wider choice of international banks. – Reputation: Vanuatu benefits from a better international reputation.

Vanuatu vs Seychelles: – Location: The Seychelles are closer to Europe and Africa, while Vanuatu is better positioned for Asia-Pacific. – Legal structures: The Seychelles offer a greater variety of business structures. – International treaties: The Seychelles have signed more international tax conventions.

Vanuatu stands out through its unique combination of advantageous taxation, political stability, and flexible regulatory framework, making it an attractive option for many international entrepreneurs and investors.

Social Obligations in Vanuatu: A Light Framework

Social obligations for businesses in Vanuatu are relatively light compared to many other countries, contributing to the country’s attractiveness for foreign investors. Here are the main points to know:

Social Security System

The Vanuatu National Provident Fund (VNPF) is the country’s main social security system. Employers are required to contribute to this fund for their local employees:

• Employer contribution: 4% of gross salary
• Employee contribution: 4% of gross salary (withheld at source by employer)

These contributions mainly cover retirement and certain basic benefits in case of illness or disability.

Health Insurance

There is no mandatory health insurance system in Vanuatu. Employers may choose to provide private health insurance to their employees, but it’s not a legal requirement.

Paid Leave

• 15 days of paid leave per year
• 21 days of paid sick leave per year
• Maternity leave (12 weeks) and paternity leave (5 days)

Working Hours

The standard work week is 44 hours, spread over 6 days. Overtime must be paid at a higher rate.

Minimum Wage

A minimum wage is in effect in Vanuatu, but it’s relatively low compared to international standards. It’s regularly reviewed by the government.

Termination

Termination procedures are relatively flexible, but termination benefits are due to employees with more than one year of service.

It’s important to note that these rules mainly apply to local employees. For expatriate employees or non-resident directors, conditions can be negotiated more freely within individual contracts.

Opening a Corporate Bank Account in Vanuatu: Step-by-Step Guide

Opening a corporate bank account is a crucial step after setting up your company in Vanuatu. Here’s the procedure to follow:

1. Choose a Bank

• National Bank of Vanuatu
• ANZ Bank
• Bank South Pacific (BSP)

2. Prepare Required Documents

• Your company’s certificate of incorporation
• Company articles of incorporation
• Proof of identity and residence for all directors and significant shareholders
• A business plan detailing the company’s planned activities
• Proof of funds origin

3. Complete Application Form

Each bank has its own account opening application form. You’ll need to provide detailed information about your company and its activities.

4. Bank Interview

Many banks require an in-person or video conference interview to discuss your application and verify your identity.

5. Background Check

The bank will conduct thorough checks on your company and its directors as part of its anti-money laundering procedures.

6. Initial Deposit

Once your application is approved, you’ll need to make an initial deposit. The minimum amount varies by bank but can range from 500 to 10,000 USD.

7. Account Activation

After receiving the initial deposit, the bank will activate your account and provide you with necessary access information.

It’s important to note that the account opening process can take several weeks, or even months, due to the strict due diligence procedures implemented by banks.

Promising Business Sectors in Vanuatu

Although Vanuatu is primarily known for its tax advantages, several business sectors offer interesting opportunities for foreign investors:

Offshore Financial Services

• Wealth management
• Trust services
• Captive insurance
• Online trading

Tourism and Hospitality

• Hotel complex development
• Ecotourism
• Cruise services

Agriculture and Fishing

• Production and export of organic products
• Aquaculture
• Seafood processing

Renewable Energy

• Solar energy
• Geothermal energy
• Biomass

Information and Communication Technology (ICT)

• Software development
• Call center services
• Online payment solutions

Real Estate

• Luxury property development
• Rental investment
• Sustainable development projects

These sectors often benefit from specific government incentives and a regulatory framework favorable to foreign investments.

Recruiting Staff in Vanuatu: Keys to Success

Recruiting qualified staff is a crucial aspect for your company’s success in Vanuatu. Here are some essential points to consider:

Local Labor Market

Vanuatu has a young and growing workforce, but qualification levels can vary significantly across sectors. Areas such as tourism, agriculture, and basic services generally have a good pool of local talent.

Expatriate Recruitment

For highly skilled or specialized positions, it’s often necessary to recruit expatriates. The Vanuatu government encourages local employment but is generally open to granting work permits for positions that cannot be filled locally.

Recruitment Process

• Advertisements in local media and online job sites
• Collaboration with specialized recruitment agencies
• Networking within the local business community
• Participation in job fairs organized by local educational institutions

Work Permits

• Justification of the need to hire a foreign worker
• Proof of candidate’s qualifications and experience
• A training plan for skills transfer to local employees

Training and Development

• Improve your team’s skills
• Promote talent retention
• Meet government requirements for local workforce development

Corporate Culture

• Flexibility for family and community obligations
• Integration of elements of Vanuatu culture in the work environment
• Promotion of diversity and inclusion

In conclusion, Vanuatu offers an extremely favorable environment for the creation and development of offshore companies, combining advantageous taxation, a flexible regulatory framework, and opportunities in various sectors. However, as with any internationalization project, it’s crucial to prepare well and surround yourself with experienced professionals to effectively navigate this new business environment.