Vanuatu Citizenship by Investment: The Ultimate Guide

Have you always wanted to hide away at a beach-front villa, or perhaps a private island is more your thing? It’s all possible in this country full of deserted beaches and breathtaking landscapes. 

A tropical archipelago in the South Pacific, Vanuatu is many people’s idea of paradise. 

It’s ideal for those who want the utmost privacy in a place as far removed from the rest of the world as possible. 

Apart from its remoteness, one other thing that sets Vanuatu apart is its citizenship by investment program – the only one in the Pacific region.

However, even though Vanuatu is used to being an offshore tax haven, it certainly has found running the passport scheme (or schemes) challenging at times. 

Getting up-to-date information about Vanuatu’s CBI program is extremely hard, to say the least. With lots of similar attempts, failed programs and different variations of CBI, the information available about Vanuatu’s program is the most confusing of all citizenship by investment programs. 

And it’s a huge shame, because Vanuatu’s CBI has a lot of potential as a tax-free jurisdiction with visa-free access to 125+ countries, including the Schengen Area, Russia, the UK, Ireland and many others. 

It has also experienced a huge surge in demand as its popularity has grown over the last two years. 

So, let’s take a look at exactly what the program entails, untangle some of its labyrinthine rules and regulations, and look into how you can buy a Vanuatu passport.

Citizenship by Investment: The Basics

Countries all around the world have set up citizenship by investment (CBI) programs that allow people to obtain a second passport. 

These programs exist for various reasons: as a way for a government to diversify its income, to create jobs for the locals, or simply (and most importantly) to raise capital.

Island states in the most remote parts of the world, such as Vanuatu, have little choice but to attract foreign investors with their favorable offshore tax regimes and passports for sale.

An investor tempted by the promise of a passport will usually have to do one, or a few, of the following:

• Make a donation to a government fund
• Purchase real estate
• Purchase government bonds or other financial instruments
• Set up and run a business and employ locals 

The sum required for each of these actions will vary per jurisdiction, but it generally ranges from $100,000 to $2 million and more. 

It all depends on the desirability of the program. 

Why Vanuatu?

So, what’s special about Vanuatu and why would you want its passport? 

Well, it’s the only CBI program in the Pacific region. But its main selling point is its remoteness. We’re pretty sure that if you looked up ‘middle of nowhere,’ Vanuatu would show up. 

Although it’s a relatively short flight away from Brisbane, Sydney, and Auckland, it’s extremely far from the rest of the world. 

Vanuatu has taken its location and made it the best thing about itself. 

The country is consistently rated as the “Happiest Country on Earth” – probably having to do with its off-the-radar location that lets you escape all the world’s troubles, as well as its pristine nature.

Vanuatu’s population of approximately 300,000 live in a country with extremely clean air, water, and food – those will be some of the hottest commodities of the future. 

Vanuatu has a very young workforce; the median age is just 21.5 – lots of potential there. 

It’s also part of the Commonwealth, which means Vanuatu’s citizens get extra rights in the UK due to historical ties. It’s official language is English, French, and Bislama, but the really interesting fact is that Vanuatu has the highest density of languages per capita in the world – over 100 native languages and dialects are spoken across Vanuatu’s islands. 

Vanuatu’s climate is tropical and, for three quarters of the year, the weather is hot and humid. 

The paradisaical setting also means tropical storms are frequent, and it’s volcanic origin means the archipelago also suffers from earthquakes. However, the islands are well-prepared for these acts of nature. 

Vanuatu’s Economy 

Although Vanuatu has been independent since 1980, its story is yet to be written. Just like any other island-nation, Vanuatu suffers from its over-reliance on just a handful of industries. 

The four main pillars of Vanuatu’s economy are agriculture, tourism, offshore financial services, and beef export. 

Cue citizenship by investment. 

In 2018, over 30% of government revenue ($88 million) was raised from the multiple citizenship programs geared at foreigners. It actually became the government’s biggest source of income, overtaking VAT receipts for the first time. 

That figure grew still – to 37% – in 2019, and it’s expected to continue on its upward trajectory. 

Rest assured that the carpet won’t be pulled from under your – the investors’ – feet. The government fully recognizes just how important the Vanuatu citizenship program is to its economy and how instrumental it will be for its further growth.

However, one thing about Vanuatu’s CBI is clear: it won’t grow indefinitely. The International Monetary Fund (IMF) said in 2019 that Vanuatu should treat this money as a “windfall, and not a new normal.”

So, the country continues looking for new revenue streams and ways to diversify its economy. 

Luckily, its other important industries are growing too. 

Back in 2000, there were only 57,000 visitors who came to Vanuatu. Now, over 100,000 people visit the islands every year, many of whom come for the premier scuba diving opportunities. 

And financial services continue to play a major part in Vanuatu’s economy. It has been a long-standing tax-haven – the Bahamas of the Pacific, so to speak. Until 2008, Vanuatu didn’t share any information with governments or law enforcement agencies abroad.

However, as the country is affected by external political forces, it has started to come around and implement more transparent practises. 

Vanuatu has managed to get removed from the OECD’s blacklist for money laundering, but it still remains blacklisted by the European Union due to failure to comply with its financial information sharing requirements. 

All in all, Vanuatu still has a long way to go in terms of tax framework implementation and tax collection itself, but its economy is in no bad shape as it is, thanks to its CBI program. 

The Main Pros of Having a Vanuatu Passport

The Vanuatu Citizenship by Investment Program

Remember how we said that Vanuatu’s citizenship by investment program is one of the hardest ones out there to get accurate information about? This is where that comes into play.

What we do know, however, is that Vanuatu’s Passport Office has issued more than 4,000 passports to foreign investors, which is a huge number. 

It sure is a successful CBI program. 

A Tale of Two CBI Programs

Believe it or not, Vanuatu has launched and ran, or is running, five CBI programs. The actual number differs depending on which source you choose to believe. 

However, the two most prominent ones that run simultaneously, and which are geared towards different locales, are these: 

• The Vanuatu Contribution program (VCP) – this program probably won’t be for you because it’s run by a single agent in Hong Kong and is geared towards clients in mainland China. In the past, this program was often discounted to attract more applicants.

• The Vanuatu Development Support Program (VDSP) – run by many government-approved agents around the world, this is the program you want to be looking for. It was launched in January of 2017 and it’s sole purpose is to grow Vanuatu’s economy and support its infrastructure, development, and changes. 

Why would one country need two or even more CBI programs? Nobody really knows. Up until recently, the programs had different fee structures, different processes, and different citizenship features. 

The government recognized just how confusing this was and that it made investors doubt the quality of Vanuatu’s CBI program. So, they have worked to harmonize all of Vanuatu’s CBI programs and have appointed a new chairman of the Vanuatu Citizenship Commission who has been given the task to resolve this paradox.

While they are still called different things, the features, fees, and processes should all be the same now. 

And, if you’re an avid cryptocurrency investor, you’ll be glad to know that it’s possible to pay for the citizenship program with Bitcoin, ensuring top security of your personal and financial information. 

The government itself won’t take Bitcoin from you, but multiple authorized agents will. The money then has to be remitted to the government in US dollars. 

How to Buy A Vanuatu Passport

It’s an oxymoron that with such a confusing history and multiple CBI programs running concurrently, actually obtaining Vanuatu citizenship is extremely simple. 

So, if you can look past the history of all the CBI programs and just focus on the Vanuatu Development Support Program (VDSP), things aren’t that bad. 

Your only route to Vanuatu citizenship is to donate a non-refundable lump sum to the local government fund:

• A single applicant will have to pay $130,000.
• A married couple will have to shell out $150,000.
• A family of four will pay at least $180,000.

Additional dependents can be added for an extra fee of $25,000 each. 

And don’t forget the application fee, which is $5,000 and covers the due diligence and government fees for everyone under the same application. 

There is also an additional $400 fee that covers the passport application, citizenship commission, and certificate fees.

Whatever agent you choose to work with, make sure they are offering these same prices because the agent’s commission comes directly from the donation you make to the government. If an agency wants to charge more than $135,400 for a single applicant, you should find another agent.  

Another thing you’ll need to prove is that you have funds no less than $250,000 available in banking assets and at least $500,000 in net assets. There is some flexibility on this. Mostly, Vanuatu wants to know that you’re good for the money seeing as it doesn’t require you to make the investment prior to lodging your application, or even a partial payment of it. 

As we already mentioned, the process is extremely speedy – probably the fastest in the entire CBI industry. It will take you just eight weeks to obtain a passport, provided all the processes are running smoothly.

How Does Vanuatu Citizenship Compare? 

Other than getting to say that you have a Vanuatu passport – very cool bragging rights indeed – you should compare the Vanuatu CBI program with others before you take the plunge.

It’s not the cheapest program. For instance, many of the Caribbean CBIs start at just $100,000 (in case of Antigua and Barbuda, it’s that for a family of four).

However, apart from its unique location and remoteness, Vanuatu’s main selling point is that it’s the fastest way to obtain a second passport. 

The streamlined process takes two months – you could be a proud owner of a brand new passport in just eight week’s time. 

No other CBI program can beat that. 

It’s also the only jurisdiction that doesn’t require the total investment sum or a big part of it up-front. All you have to pay is the $5,000 fee to get the application process going and get an approval from the government.

Only after that’s completed will you be required to pay the rest of the investment sum. At this stage, there is pretty much no chance that your citizenship wouldn’t get approved. 

So, Vanuatu’s CBI program is extremely speedy and ideal for the investor less tolerant of risk. 

Meanwhile, the visa-free access to 125+ countries is pretty standard among CBI countries. 

The Step-by-Step Application Process

Interested in obtaining your Vanuatu passport? Before we get to that, you should check if you can apply.

So, who’s eligible for a Vanuatu passport?

Although Vanuatu’s CBI program is pretty liberal, there are some requirements to ensure that you are an applicant of good character and solid financial standing:

• You must provide proof of net personal assets no less than $500,000, of which, at least $250,000 should be banking assets.
• You must have a spotless criminal record.
• You must be of high standing in your community, society, or country. 
• You must not have lived in Iran, Iraq, Syria, North Korea, or Yemen for the past five years. 
• You cannot be on any sanctions lists worldwide.

If you fulfill all of these requirements, you can apply for a Vanuatu passport. Here’s how in three simple steps.

2. Apply for Citizenship and Wait

Next, you’ll have to gather up all your documents (the list is pretty standard) and submit the full payment.

If all of your paperwork is in order, it will take anywhere between 30-60 days for the government to make a decision on your application.

The committee meets twice a month, so it also depends on your timing as to how long you’ll have to wait for your citizenship approval.

For example, you could meet the officials in a place like London or Dubai. This option obviously involves extra fees, as you must pay for the travel and accommodation of the Vanuatu officials at your nearest Consulate.

The second option might delay your passport issuance, as travel arrangements will need to be made. 

Aside from travel arrangements (yours or the government officials, you decide), you will need to pay the additional $400 fee at this point, which includes $250 for the passport application, $50 for the citizenship commission fee, and $100 for certificate fees. 

After the ceremony, you will be issued a Naturalization certificate which will allow you to apply for and obtain a Vanuatu passport. 

Permanent Residence: A Good Alternative 

Is getting a passport too much hassle? Would you prefer to invest in real estate rather than donate money to a government?

It’s possible to do just that and get a chance to enjoy a tax-free life in Vanuatu. 

To qualify for permanent residence in Vanuatu, you must purchase real estate worth at least $100,000 and have a monthly income of at least $2,500. 

This will allow you to enjoy all the benefits that Vanuatu residence brings, including zero percent tax, top international schools, clean air and water, pristine beaches, and a remote location. 

And if you spend at least 10 years living in Vanuatu as a permanent resident, you can eventually become a naturalized citizen of the island too.

However, if your goal is citizenship and you would rather not wait a decade, you can always hand over the $130,000 and get it in a matter of weeks.

The Pros of Vanuatu Citizenship

So, what are the advantages of Vanuatu citizenship by investment and what can a Vanuatu passport do for you?

Your passport in 2 months. The biggest pro of Vanuatu’s CBI program is the speed. The streamlined process takes only 8 weeks – from the lodging of your application to holding your new passport. Can’t beat that.

Only pay when you get pre-approved. Unlike other jurisdictions, you’ll only have to pay the full investment price after you get pre-approved for a Vanuatu passport, making it a less risky proposition. 

Go off radar. Vanuatu is one of the most remote countries, far removed from the world’s troubles and worries. It’s also a politically neutral country that promises complete anonymity – fly off the radar.

Access to 125+ countries visa-free. Increase your global mobility and access countries like the UK, Ireland, Russia, Hong Kong, and all of the Schengen Area with your Vanuatu passport. The country is also part of the Commonwealth, offering easier access to countries like Canada and Australia. 

Optimize your tax. Become a tax resident of Vanuatu and take advantage of its favorable tax regime; no income tax, no inheritance or capital gains tax, and more. Vanuatu is also international business friendly.

Your family can come along too. The main applicant can add a spouse, all of their dependent children and even their parents to the application for Vanuatu citizenship.

Great lifestyle opportunities. Visiting or living in Vanuatu? It’s been rated as the Happiest Place in the World for over a decade now, offering a great lifestyle.

Pass it on. Vanuatu’s citizenship is hereditary, so all of your children will be born into it too, giving them more options for a brighter future.

There is no language or residency requirement. You won’t have to attend any in-person interviews or brush up on Vanuatu’s history. Vanuatuans also speak decent English. 

Further investment opportunities. Vanuatu is an island paradise; purchase an island of your own or a beach front villa to enjoy some of the most pristine natural environments on the planet. 

The Cons of Vanuatu Citizenship

While the Vanuatu passport has many good things going for it, there are also various cons that you should consider before buying Vanuatu citizenship. 

Economy overly reliant on its CBI program. Although Vanuatu’s economy is in no terrible shape, it’s also extremely reliant on its CBI program. If that were to fall through, Vanuatu wouldn’t have much of a leg to stand on. 

Confusing legislation. With multiple historical programs and a few programs currently running simultaneously, even the government’s website can’t keep up with all the changes. Vanuatu’s CBI program is hard to navigate and it’s hard to understand. 

Lack of transparency. Vanuatu ranks 64th in the world in the Corruption Perception ranking compiled by Transparency International. The entire region has made little progress when it comes to the eradication of corruption. 

Remoteness. While for some it’s the biggest pro, others will be turned off by Vanuatu’s remote location. That’s unless you happen to be a resident of Australia or New Zealand. 

In-person oath ceremony. To obtain a Vanuatu passport, the final step is to take an oath. Unfortunately, this must be done in-person, so you must either travel to Vanuatu yourself or pay for two government officials to come and see you, wherever you are in the world.

Your Vanuatu Citizenship And Passport

Vanuatu might be a gorgeous archipelago in the South Pacific with a regionally strategic location to boot, but most people know it as an offshore tax haven.

Although tourism has picked up in recent years and its agriculture is doing well, the government attracts most people and capital by running its citizenship by investment program. 

And while you would think that such a program would be accountable to its stakeholders – from investors to the agents selling it – the lack of transparency and the shroud of mystery that surrounds it has definitely put a dent in the program’s reliability. 

We think that Vanuatu’s CBI program has tremendous potential if it does away with the multiple programs, convoluted regulations, and inconsistent processes and pricing. 

The program that is run by a single agent in Hong Kong especially needs to be cleared up or decommissioned altogether to allow for more transparency. 

An experienced hand needs to steer the main CBI program of Vanuatu towards clarity and stability. We hope that the moves to harmonize the various programs back in 2019 are just the beginning. 

But despite the troubles and the uncertainty, the program remains an attractive option for those seeking a second passport. Its revenue also continues to rise.

The government is even toying around with a real estate investment option and other direct investment routes besides the donation route that is currently available.

Only time will tell what comes out of those talks, but if you’re ready to jump in and acquire a Vanuatu citizenship right now, you need an advisor you can trust. 

The Nomad Capitalist team is here to help. Feel free to reach out.