Vanuatu
Offshore Legal and Tax Regimes
Since
there is no direct corporate taxation in Vanuatu,
'offshore' status does not have a direct tax
advantage, but, rather, gives better confidentiality
and less bureaucracy. For a company to be 'offshore'
ie an exempted company or an International Company,
it must not conduct more than the essential
minimum of business in the jurisdiction.
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Vanuatu
Forms of Offshore Operation
Almost all non-financial companies
whose operations are external to Vanuatu adopt
the International
Company form under the International Companies
Act 1992. Financial institutions with external
operations (banks, insurance companies, trust
and fund management companies) are obliged
however to use the Exempted
Company form under the Companies Act.
Vanuatu
Tax Treatment of Offshore Operations
In Vanuatu there is no income
or corporation tax, no capital gains tax, no
sales tax (this has been replaced by a value
added tax), and no withholding tax. Companies
and partnerships pay annual fees to the Government
depending on their nature and capitalisation.
Registration fees dependent on authorised capital
are described in Forms
of Company; license fees dependent on sector
are described in Domestic
Corporate Taxes; licence
fees for financial institutions are given in
Offshore Business Sectors.
International
Companies however are exempt from licensing
and the associated fees.
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Vanuatu
Taxation of Foreign Employees of Offshore Operations
This
section refers to the taxation of foreign employees
in Vanuatu. See Domestic
Personal Taxes for the general principles
of individual taxation in Vanuatu, which also
apply to the resident employees of non-resident
entities. There is in fact no distinction between
the employees of resident or non-resident operations.
In any event there is no income tax, capital
gains tax or payroll taxation.
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Vanuatu
Exchange Control
There are no exchange controls in Vanuatu. Bank
accounts may be in any currency, and international
transfers are free of all controls.
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Vanuatu
Offshore Activities
Generally, the forms of company
and partnership described above which are those
used for offshore operations are allowed to
trade freely from Vanuatu with external partners,
but must limit their dealings on the island
to activities in direct support of their international
operations. They may operate bank accounts,
use professional services, and hold shares and
other securities (but not in local companies).
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Vanuatu
Employment and Residence
Employment
and residence by non-Vanuatu citizens requires
permits. These are normally given to skilled
workers or to those who have substantial funds
to invest. Applications for residency permits
are normally made concurrently with work permits.
A residency permit is required by anyone who
stays in Vanuatu for longer than 4 months in
any one year.
Retirement
residency permits are given to persons demonstrating
local net worth of $104,000 and a monthly minimum
income of $3,000 (for a married couple).
Residency
Permit Fees are levied at the following rates
based on the term of the permit:
- 1
Year VT20,000;
-
3 Years VT90,000;
-
5 Years VT130,000;
-
10 Years VT230,000;
-
15 Years VT330,000
For
all permits greater than one year's duration
there is an initial processing fee of VT50,000,
which includes the first year's residence fee,
and an annual fee of VT20,000. All fees are
payable in advance and are not refundable.
Prior
to the issue of a residency permit, a repatriation
bond must be lodged with a local bank.
This
usually takes the form of a blocked deposit,
with the bank certifying to the immigration
authority that it holds a repatriation bond
equivalent to airfare to the country in which
the applicant has citizenship, or its nearest
territory.
Investors
are required to obtain from a local trading
bank proof of their level of investment in Vanuatu.
This level of investment will need to vary from
Vt5 million (US$50,000) to VT100 million (US$
1,000,000) depending upon the length of permit
requested.
A
Work Permit or an exemption from the need to
hold a work permit is required by all non-citizens
before a residency permit will be issued, except
in circumstances where no active investment
in any Vanuatu based business is being contemplated.
A
work permit may be granted for an expatriate
to be employed on a contract by an employer
in an occupation where there are no suitably
qualified Ni-Vanuatu available. However, in
order to prove that this is the case, there
is a requirement for the position to have been
advertised locally for at least two weeks, and
for employers to explain why any application
by a citizen has been refused.
Labour
Department fees for a work permit are VT50,000
per person per annum. An exemption from the
requirement to hold a work permit may be obtained
for self-employed persons engaged in business
which has necessitated a minimum investment
of VT5 million. However, exemption is not automatic,
and all expatriate investors have to complete
the work permit application form.
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