Foreign Ownership Regulations in Vanuatu

Published on September 30, 2025 and written by Cyril Jarnias

Vanuatu, a South Pacific island paradise, is attracting increasing foreign investment thanks to its favorable tax framework and business-friendly environment. However, before embarking on real estate acquisition or business creation in this country, it’s crucial to thoroughly understand the current regulations concerning foreign ownership. This article will guide you through the essential aspects to know for investing confidently in Vanuatu.

A Legal Framework Open to Foreign Investors

Vanuatu has established a relatively favorable legal environment for foreign investors, with few restrictions on ownership. Unlike many countries that impose strict limits on property ownership by non-residents, Vanuatu adopts a more liberal approach.

Foreigners can own real estate and businesses in Vanuatu without major restrictions. This open policy aims to attract foreign direct investment and stimulate the local economy. However, certain specific rules apply, particularly regarding land acquisition.

It’s important to note that Vanuatu’s legal system is based on customary law and British common law, which may present certain particularities for investors accustomed to other legal systems. Understanding these specifics is essential for navigating the local business environment effectively.

Land Acquisition: Between Opportunities and Precautions

One of the most attractive aspects for foreign investors in Vanuatu is the possibility of acquiring real estate. However, there are some important nuances to understand:

• Foreigners can purchase built properties (houses, apartments, commercial premises) without particular restrictions.
• Acquisition of vacant land is possible, but only through long-term leases, typically for 75-year renewable terms.
• Land ownership in Vanuatu is governed by the concept of “customary ownership,” meaning land traditionally belongs to local communities.

This land ownership structure aims to preserve local population rights while allowing economic development. For investors, this implies working closely with customary landowners during land acquisition.

The real estate purchase process in Vanuatu requires thorough due diligence. It’s crucial to carefully verify property titles, usage rights, and any restrictions related to customary ownership. Assistance from an experienced local lawyer is strongly recommended to navigate these complexities and avoid potential pitfalls.

Business Creation: A Simplified Process for Foreigners

Vanuatu has established a favorable regulatory framework for business creation by foreign investors. The process is relatively simple and fast, making it an attractive destination for international entrepreneurs.

Foreigners can create different types of legal entities in Vanuatu, including International Companies and Exempt Companies. These structures offer significant tax advantages, with a 0% corporate tax rate for income generated abroad.

The business creation process typically includes the following steps:

• Choose and reserve a business name with the Vanuatu Financial Services Commission (VFSC)
• Prepare and submit company incorporation documents
• Appoint directors and a registered local agent
• Obtain a business license from the Vanuatu Investment Promotion Authority (VIPA) if necessary

It’s important to note that since 2020, Vanuatu requires physical presence for businesses operating in certain sectors, particularly financial services. This measure aims to strengthen the country’s compliance with international standards for anti-money laundering and counter-terrorism financing.

Obligations and Responsibilities of Foreign Owners

Although Vanuatu offers a favorable environment for foreign investors, it’s essential to understand the obligations and responsibilities that come with ownership in this country.

Foreign owners are required to comply with local laws and regulations, particularly regarding environment, employment, and taxation. Although the tax regime is advantageous, certain reporting obligations must be respected, especially for businesses operating internationally.

Foreign business owners must:

• Maintain proper accounting records
• Submit annual reports to the VFSC
• Comply with anti-money laundering and counter-terrorism financing regulations
• Respect local employment obligations, where applicable

For property owners, it’s important to respect the terms of land leases and maintain good relationships with local communities, particularly in the case of properties located on customary lands.

The Vanuatu government has recently strengthened its monitoring and compliance mechanisms for foreign investors. This includes more thorough checks of funding sources and increased oversight of business activities to ensure compliance with international standards.

Winning Strategies for Foreign Investors

To succeed in Vanuatu as a foreign investor, it’s crucial to adopt a strategic and well-informed approach. Here are some essential tips to maximize your chances of success:

1. Conduct thorough due diligence: Before any investment, whether in real estate or business creation, conduct detailed research on the local market, sector-specific regulations, and potential business partners.

2. Collaborate with local experts: Engage the services of lawyers, accountants, and investment advisors familiar with Vanuatu’s context. Their expertise can help you navigate local system complexities and avoid costly mistakes.

3. Understand and respect local culture: Vanuatu has a rich traditional culture that strongly influences business practices. Taking time to understand and respect these traditions can greatly facilitate your business relationships and integration.

4. Diversify your investments: Vanuatu offers opportunities in various sectors, from real estate to tourism and offshore financial services. A diversified investment strategy can help minimize risks and maximize returns.

5. Stay informed about regulatory changes: Vanuatu’s legal and tax framework regularly evolves to align with international standards. Keep up to date with these changes and adapt your strategy accordingly.

6. Establish a local presence: Even if not always legally required, having a physical presence in Vanuatu can greatly facilitate your operations and strengthen your credibility with local partners and authorities.

Future Prospects for Foreign Investors in Vanuatu

Vanuatu continues to evolve as an investment destination, with promising prospects for the future. Several factors contribute to making this country increasingly attractive to foreign investors:

Infrastructure development: The Vanuatu government is heavily investing in infrastructure improvement, particularly in transportation and telecommunications. These developments should facilitate business operations and increase the country’s appeal to international investors.

Economic diversification: Although tourism remains an important economic pillar, Vanuatu is actively seeking to diversify its business sectors. Opportunities are emerging in areas such as sustainable agriculture, renewable energy, and digital services.

Strengthening international compliance: Vanuatu’s ongoing efforts to align its practices with international standards for financial transparency and anti-money laundering strengthen its reputation as a reliable investment jurisdiction.

Investment incentive programs: The government is considering implementing new incentive programs to attract foreign investment in priority sectors, potentially offering additional tax and regulatory benefits.

Climate change adaptation: As an island nation, Vanuatu is at the forefront of climate change adaptation initiatives. This opens unique opportunities for investors in areas such as sustainable construction and green technologies.

It’s important to note that these prospects also come with challenges, including the country’s vulnerability to natural disasters and fluctuations in the global economy. Wise investors will need to remain vigilant and adaptable in the face of these realities.

Conclusion: Vanuatu, A High-Potential Investment Destination

Vanuatu offers a unique and attractive environment for foreign investors, combining an advantageous tax regime, a favorable regulatory framework, and growth opportunities in various sectors. Although the country presents certain challenges, particularly regarding land ownership and adaptation to international standards, these obstacles can be overcome with careful planning and help from local experts.

The keys to success for foreign investors in Vanuatu lie in a thorough understanding of the local context, rigorous due diligence, and a respectful approach to local traditions and communities. By adopting these principles and staying informed about regulatory developments, investors can fully leverage the opportunities offered by this South Pacific paradise.

As Vanuatu continues to strengthen its position on the international investment stage, it’s clear that this small archipelago has much to offer visionary entrepreneurs and investors ready to explore new horizons.