Vanuatu

Law Partners, Vanuatu

Economic Overview & Business Opportunities – Vanuatu

Located in the Southwestern Pacific Ocean, Vanuatu is a conglomeration of islands. Spanning over 12,189 square kilometres of land, Vanuatu the 166^th largest country of the world with a population of around 300,000 people.

The Economy of Vanuatu

Vanuatu gained its independence from the United Kingdom in 1980. Agriculture, fishing, tourism, and offshore financial services are the main pillars of Vanuatu’s economy. Among the four main pillars, the agriculture sector has been the source of income for about two-thirds of its population. Agricultural makes up the large chunk of the country’s export, namely copra, coconut oil, kava, beef, timber, cocoa, and coffee). As such, the agriculture-based export has been the reason of Vanuatu’s vulnerability to fluctuations in world commodity prices. Apart from agriculture sector, tourism sector is generating revenue and supporting the country’s economic growth.

Since 2002, Vanuatu’s government has put in efforts proactively to promote tourism with its upgraded air connections, resort development, and cruise ship facilities. Besides, Vanuatu’s government welcomes and encourages the development of private sector and foreign investment in the country. The efforts of improving living standards and reducing economic inequalities speak volume of the government effort. Despite the economic slowdown during the period 2001–02, the economy recovered and the gained momentum to grow under good fiscal and monetary management as well as increased private capital inflows.

Vanuatu has maintained good international trade relationship with many countries and organisations. The good trade relationship and investment network have paid off well when Vanuatu sees better sustainable development towards economic growth. From the Pacific Island Forum Secretariat (PIFS), Melanesia Spearhead Group (MSG) Secretariat, Pacific Island Private Sector (PIPSO), to the Pacific Community (SPC), Vanuatu has developed sustainable trade relationship and investment network that has, in turn, benefitting the country’s economic growth.

Why Invest in Vanuatu

Vanuatu is an attractive investment destination due to its vibrant business opportunities and the favourable business environment for investment. Every elected Vanuatu’s government welcomes and always encourage local investment where the government has given particular interest and attention in encouraging investment in tourism, agriculture, fishing, forestry, and timber products. The Vanuatu’s government has mapped out proactive measures to fast-track foreign investments in the country, such as streamlined bureaucracy, minimal paperwork, enhanced international communication facilities, upgraded transportation system, low tax regime, and low labour cost.

Vanuatu has zero percent of taxes as follows:

1. Income taxes,
2. Corporate taxes on local and offshore income,
3. Withholding taxes,
4. Capital Gains taxes (except on some real estate transactions),

If you are looking forward to establishing a foothold in the region, Vanuatu has a lot to offer.