Vanuatu: Vanuatu - Excellent Privacy With No Tax & Minimum Admin
Protected by the International Companies Act

Contributed by Dr. Geoffrey Taylor (Founder GT Group of Companies, New Zealand, Vanuatu & Elsewhere)

Vanuatu - Tax Haven

This South Pacific tax haven that has recently been returned to the white list, consists of 80 small islands situated 1,500 miles east and northeast of Australia and 800 miles west of Fiji. Port Vila, the administrative centre, is situated on Efate Island.  

The climate of the group ranges from tropical in the north to sub-tropical in the south. The average day temperature from November to March is 80°F, and from April to October, 75°F. Average rainfall is about 95 inches pa.

The International Companies Act makes it a criminal offence for any person to divulge, attempt, offer or threaten to divulge or induce or attempt to induce other persons to divulge information concerning an international company.

The secrecy provisions of the Companies Act, the Trust Companies Act and the International Companies Act are not unrestricted. Officers and employees of companies may be required to provide evidence about those companies if ordered by the Supreme Court of

Vanuatu. However, court proceedings involving international or exempted companies are all heard in camera. The Serious Offences (Confiscation of Proceeds) Act and the Mutual Assistance in Criminal Matters Act were enacted in 1989 to, among other things, prevent the laundering of proceeds of criminal activities.

The main principle upon which the International Companies Act is based is that of the solvency test. An international company (1C) can do what it wishes with its assets so long as it remains solvent. It may distribute its net assets to its owners or gift them to others, purchase their own shares, cancel shares etc.

Specific characteristics of the International Companies Act include those set out below.

These characteristics do apply to all three types of International Company; companies Limited by Shares, companies Limited by Guarantee or the Hybrid, which is a company that is limited by both Shares and Guarantee.

A Vanuatu International Company:

1. Has a "Constitution" instead of a Memorandum and Articles of Association.
2. Has abandoned the concept of authorized capital.
3. May be limited by shares, guarantee or both.
4. Has "Incorporators" rather than "Subscribers" because they do not subscribe for shares. The first shares are allotted by the directors and thus there is no need to transfer shares out of the names of the incorporators to the company purchasers (or their nominees).
5. Deems incorporators to be members until one or more members are registered.
6. May have a single incorporator as well a single member.
7. Need not name its first directors in its Constitution. The incorporators who exercise the powers of directors until they appoint the first directors will subsequently appoint them.
8. May have its official name in any language including Chinese characters (with a requirement for a second official name in either English or French).
9. Must have in its name a word or popular abbreviation thereof, which connotes the existence of a body corporate with limited liability.
10. Need not appoint a Company Secretary or other officers.
11. Need not hold Annual General Meetings nor file Annual Returns
12. Has all the powers of a natural person.
13. Must have a registered agent in Vanuatu (who need not be an officer).
14. Must have a Registered Office in Vanuatu.
15. Must have one or more directors (natural persons or corporate) who may reside anywhere in the world.
16. May transfer its assets to trustees acting on behalf of third parties.
17. May not carry on business or own land in Vanuatu except in furtherance of its international business.
18. May change its status to/from being limited by shares/guarantee.
19. May have shares that are in registered or bearer form, have full, conditional, partial or no voting rights, with or without par value, and be convertible, common, preferential or redeemable, subject to forfeit or not, and issued in any currency.
20. May purchase or redeem or hold its own shares without court approval, so long as the 1C does not become the sole member of itself.
21. May convert from/to no par value, change currencies, and convert from/to bearer shares.
22. May issue fractional shares.
23. May issue share warrants in registered or bearer form.
24. Need not issue share certificates.
25. May apply to the Vanuatu court to not recognize any acquirer of shares in the company if they were acquired by force, confiscation, imposition of any tax, assessment or other foreign government charge.
26. May do anything by resolution of directors/members that could be done by a meeting of directors/members.
27. May make loans to directors, or other persons.
28. Need not appoint any Vanuatu resident as director(s) or hold any meetings in Vanuatu.
29. Shall indemnify any person who has acted in good faith on behalf of the company.
30. May hold meetings anywhere in the world, which may be held in any manner so long as the members can hear and recognize each other's voice.
31. May keep its accounts, records, minutes, and registers any place in the world it wishes, but they must be brought into Vanuatu if the Registrar so directs.
32. May adopt a "Common" or "Corporate" seal which may be affixed anywhere in the world.
33. May execute contracts under seal or by signature of director(s).
34. May ratify any pre incorporation contract, whereupon that contract will bind the company as if it were the party when the contract was made.
35. Must lodge with the Registrar, its Constitution, the location of its registered office, and the name of its Registered Agent and any changes thereto, all of which are available for public inspection.
36. Must register all charges against the assets of the company to be valid. Such registration is not available for public inspection.
37. May voluntarily lodge with the Registrar details in respect of Directors, Secretaries and Members.
38. May issue debentures or series of debentures and if issued they may by their terms suspend the votes of the members.
39. May not offer its shares or debentures to the public.
40. May merge with another company with one of them surviving or consolidate with another company resulting in a new company.
41. Continue its existence under the laws of another jurisdiction or become an I.C. by continuing in Vanuatu so long as the previous jurisdiction does not specifically prohibit continuation outside that jurisdiction.
42. May delay for up to 3 years its continuation in Vanuatu or moving out of Vanuatu after approval has been granted.
43. May be struck off if it no longer qualifies as an I.C.
44. May hold shares in Vanuatu local or exempted companies e.g. Banks or Insurance Companies.
45. Is obliged to pay all government fees in US$, the main ones of which are:

1. US$150 upon registration
2. US$300 each 30th June (US$150 in the year of incorporation)

46. Need not disclose on its letterhead etc its place of incorporation.
47. Is exempt from stamp duty, exchange controls and tax on profits, capital gains, and distribution for a period of 20 years.

This article has been contributed by Geoffrey Taylor, B. Com, M.B.A., PH. D., FAIBF, F.Inst.D, who was the founder of the GT Group of Companies whose website can be found at: www.lesstax4u.net or www.gtgroup.com.vu.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.