advantage vanuatu

ADVANTAGE
VANUATU
Captive Insurance
and other Financial Services
www.insurance.vu
“
We recognise that a successful
financial centre must provide
confidence for the long term investor.
The benefit of British and French
influence over many years is evidenced
in our constitution, policies and the
stability of a youthful nation keen
to develop its future as a significant
international financial centre.
The Hon. Sela Molisa MP
Minister of Finance & Economic Management
Inside
Vanuatu: The logical captive choice
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Background
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Captive insurance
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Captive insurance in Vanuatu
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Insurance Manager
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Captive insurance licence
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Protected Cell Companies
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”
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General information
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Company law
14
Insurance companies
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Trusts, banks and investments vehicles
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Travel
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Shipping register
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Other matters
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Useful addresses
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Vanuatu: The logical captive choice
Vanuatu’s status as a true captive specialist is beyond doubt. Its proven
ability to offer a stable and progressive environment for the international
client is deservedly reflected in its status as the largest captive domicile
in the South Pacific. Vanuatu’s edge lies in the proactive and cohesive
relationship that underscores all financial service industry participants.
Regulators work with, not against, potential investors in a collaborative
process designed to ensure the ongoing credibility and integrity of the
financial services industry. Legislators closely follow international legislative
developments with an eye to maintaining the fertility of Vanuatu’s legal
landscape for captive investment. Licensed insurance managers have
organised themselves into a professional association devoted to the
maintenance of high service standards in the captive industry.
This relationship provides a solid foundation from which international clients
can exploit the many commercial advantages that Vanuatu has to offer.
Vanuatu is a member of the International Association of Insurance Supervisors
- www.iaisweb.org
Background
Vanuatu has developed a reputation for its commitment to the facilitation
of favourable commercial outcomes for overseas clients. A common law
legal framework, zero corporate tax rate and minimal compliance costs
provide an accessible and stable platform from which to launch any captive
insurance programme.
Vanuatu has enjoyed a long history as an international financial centre.
That experience has enabled regulators and industry participants to
intimately understand the needs of potential investors and captive clients.
It has also equipped the financial services industry with the support networks
and professional expertise necessary to service the international client.
Vanuatu prides itself on its ability to blend stability with proactivity.
Consistent with that focus and mindful of the limited insight that promotional
booklets often deliver, this publication endeavours to provide a direct
and authentic window into the financial services (and particularly captive
insurance) industry in Vanuatu.
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The commercial benefits and advantages of captive insurance include:
“Vanuatu has evolved into a full service financial centre.
It has become the offshore domicile of choice for financial
services including, company formation, trusts, mutual funds,
international and captive insurance.”
George Andrews
Vanuatu Financial Services Commissioner
• Returning underwriting profit and investment income to the owner.
A traditional insurance carrier would otherwise retain these earnings.
• Policies can be better tailored to the needs of the insured party. Premiums
can be based on a company’s individual risk profile as opposed to that of
the industry;
• Administration costs are transparent and controlled;
• The owners are able to actively participate in decisions influencing its
underwriting, operations and investments;
Captive insurance
• Expensing risk cost and tax efficiency;
A captive insurance company is effectively an “in house” insurance provider.
It is an entity, through which one self-funds risk exposure. The general
mechanics of captive insurance are relatively straightforward: A company,
having identified a risk, provides for that risk by paying regular cash instalments
to an entity over which it has complete control (as opposed to a traditional
insurance company). The basic attraction of captive insurance is self-evident.
One gets all the benefits of insurance coverage (i.e. risk protection, tax
deductibility of premiums) while retaining the benefit of accumulated premiums.
If the anticipated risk does not materialise, accumulated premium becomes
retained profit. If the risk does materialise, the entity’s risk is covered.
Insured/Owner
Dividends
Claims
Premiums
Captive
Capital
• Direct access to reinsurance (reinsurance is a means by which an insurance
company can protect itself against the risk of losses with other insurance
companies);
• There is better opportunity for risk control driven by an incentive to
understand, reduce or eliminate the risk.
Some simple captive insurance structures appear in the diagram below:
Parent or cell
owner/Insured
Parent or cell
owner/Insured
Fronting
Insurer
Fronting
Insurer
Captive
Example 1
Parent or cell
owner/Insured
Parent or cell
owner/Insured
Captive
Captive
Captive
Reinsurer
Reinsurer
Example 2
Example 3
Example 4
KEY
Investment
Income
Investments
Asset Portfolio
Source: Captives 101: Managing Cost and Risk by Towers Perrin
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risk transfer
risk carrying
(premium) captive (owned
or rented)
may include
some risk (retained
by insured)
may transfer
risk to other
insurance companies
Source: Riskman International
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Captive insurance in Vanuatu
A critical issue when considering captive insurance lies in identifying the
entity or structure which will act as the captive insurance company. The ideal
entity will inevitably vary from company to company according to a number
of individual criteria. In recognition of this basic reality, Vanuatu offers a full
suite of options, including:
• Incorporated insurance companies;
Minimum capital requirements for captives:
• US$100,000 General insurance classes
• US$250,000 Life and long term insurance classes
(i) Insurance manager for Captive
The Insurance Act requires all applicants for an insurance licence to appoint
an authorised insurance manager who is a resident in Vanuatu and has
sufficient experience to represent the company and liaise with the Vanuatu
Financial Services Commission (“VFSC”) on the following matters:
• Protected cell companies1;
• Rent-a-captive facilities.
(a) Incorporated insurance companies
• Assistance in structuring the captive and completing the licence application;
The legal framework for incorporated insurance companies in Vanuatu
is supplied by the Companies Act 191, Insurance Act 2005 and Insurance
Regulations 2006.
• Incorporation of the company;
• Provision of a principal office in Vanuatu;
• Maintenance of books and records, submission of reports, information and
documentation as required by the VFSC;
A captive insurance company is entirely free from:
• Corporate tax
• Death duty
• Capital transfer or estate tax
• Inheritance tax
• Capital gains tax
• Exchange control regulations
• Arranging for and supervising the operation of bank accounts, accounting
and audit services;
• Processing of claims data;
• Preparation of policies and certificates of insurance or reinsurance;
Basic requirements:
• Appointment of resident insurance manager;
• Establishing and maintaining reinsurance treaties where required;
• Asset management and investment services;
• Certificate of incorporation;
• Insurance licence;
• Compliance with the Insurance Act and Regulations;
• Copy of Memorandum and Articles of Association;
• Ensuring maintenance of the company in good standing with the VFSC;
• Minimum of two directors;
• Being aware and notifying the VFSC of any changes to the business plan.
• Detailed business plan;
• Books and records to be maintained in Vanuatu;
• Annual audited financial statement;
• Actuarial valuation and report as required;
• Maintain minimal solvency margin.
In practice, the insurance division of the VFSC has a good relationship with
insurance managers. Many routine problems can be solved over the phone
rather than entering into detailed correspondence.
For a list of authorised resident insurance managers please refer to
www.insurance.vu
1. At time of printing legislation is currently being prepared for Incorporated cell companies
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(ii) Certificate of incorporation
A certificate of incorporation can be obtained by completing a detailed
application form, providing all necessary documentation and paying an
incorporation fee of $US500. The fee is payable annually.
Captives are typically incorporated as exempted companies. Exempted
company status accesses extensive confidentiality protections backed by
criminal sanctions. Members of the public are unable to obtain detailed
information about such companies. Court proceedings can be held in private
with no public record. Strict confidentiality is guaranteed unless disclosure is
necessary to investigate any criminal activity.
Fees at a glance
Application fee
Annual fee
Company formation
Nil
US$500
Insurance licence
US$500
US$5,000
Protected cell
Nil
Nil
Company licence
Nil
Nil
Cell authorisation
Nil
Nil
(iii) Insurance licence
The application is then reviewed and, if approved, the company can be
incorporated. Upon confirmation that the requisite capital is in place, a
licence will be issued and the company can commence business. This process
typically takes one month.
Insurance licences are issued by the VFSC. Obtaining an insurance licence
involves a two-step process:
(b) Protected cell companies
1. Submit a draft application and business plan to an insurance manager.
The insurance manager will assess the feasibility of the proposal and suggest
any necessary amendments.
In addition to the legislation already mentioned, protected cell companies
are regulated by the Protected Cell Companies Act 2005. The Act enables
flexibility in the way in which capital and assets can be subscribed and
allocated between the core company and individual cells.
2. Submit a full application to the VFSC.
What is a Protected Cell Company (PCC)?
Any application, whether a draft or final copy, should include:
• Details of the company’s beneficial owners, directors and officers;
• A
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detailed business plan outlining:
Source of business
Classes of business to be written
Underwriting guidelines
Policy limits
Details of reinsurance programme
Currency type
Claims handling procedures
Investment philosophy
Financial projections.
A protected cell operates like a separate limited liability company but is
actually a segregated part of a single company.
Protected Cell Company
Core Capital
Cell 1
Cell 2
Cell 3
Cell 4
Cell 5
Cell 6
Cell 7*
Every application to the VFSC must be accompanied by an application fee of
US$500. An annual licence fee of US$5,000 is also payable.
* No limit to the number of cells
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When the assets and liabilities of a particular company or group have been
allocated to a cell, only persons who have entered into transactions with that
cell, or have become creditors of the cell will have recourse against its assets.
It is possible for a cell set up in a PCC to issue shares.
Similarly it is possible for dividends to be paid on shares of a cell even though
the core company has not made a profit. The proceeds of shares would
become assets of the relevant cell as would the payment of capital, share
premiums, contributed surplus, retained earnings and premiums paid into
the cell.
These assets are segregated from other cells and are not available to the
creditors of the core company or any other cells. This is achieved by the
following legal mechanisms:
(i)
The directors of a PCC are under an obligation to keep the assets and
liabilities of one cell identifiable and entirely separate from those of
another cell;
(ii)
Every third party that contracts or deals with a particular cell is deemed
to accept that in recovering its debts from a particular cell, it will not
have recourse against other cells within the PCC. The corollary of this
is that every PCC is legally obligated to put third parties on notice that
they are contracting with a PCC. This is done by:
(a) including the expression “Protected Cell Company” or “PCC” at the
end of the company name; and
(b) every director of a PCC informing third parties that they are
contracting or dealing with a PCC; the director being personally
liable for any losses resulting from a failure to do so.
(iii) A PCC can create and issue shares in any of its cells. This enables
ownership of a cell to be divided among a number of legal persons,
thereby facilitating the equitable distribution of cellular profits.
The possibilities of protected cell companies
There are two primary ways by which a company can take advantage of
a protected cell company. First, it could incorporate its own protected cell
company by following a process similar to that outlined above for standard
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captive insurance companies. Alternatively, it could rent a cell from an
existing insurance company and thereby avoid the associated set up and
compliance costs.
“The advantages and commercial benefits of captive insurance
are well documented. Yet the ideal vehicle for forming a captive
and accessing those benefits is often overlooked. For some the
incorporation of a separate company for that purpose can be
unduly costly and time consuming, while rent-a-captive facilities
can give the perception of a relinquishment of control.
The recent enactment of protected cell legislation in Vanuatu
has provided one solution to this dilemma by affording the
traditional advantages of a separate legal entity without the
associated compliance costs. When added to the range of
captive options already on offer, the protected cell legislation
has enabled Vanuatu to offer a full range of captive insurance
options for the international client.”
Kevin J Lindsay
Chairman Vanuatu Captive Association, Director Riskman International
As reported in Offshore Investment
(c) Rent-A-Captives (RAC’s)
Certain companies “rent” their “balance sheet” to entities wishing to establish
a self-insurance program without establishing their own captive insurance
company. Prior to PCC’s the only option for separation of each individual
insured’s risk exposure was facilitated entirely by contract between the
renter and the “balance sheet provider”. As noted above, with the advent of
protected cell legislation, the PCC provides statutory division for each insured
protecting the assets of one account from the liabilities of another. Each cell
is able to maintain its own income statement and balance sheet. The owner
can effectively manage its risk identification and retention.
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General information
Vanuatu consists of a group of 80 islands in the South Pacific Ocean, totalling
some 12,200 square kilometres.
Previously known as the New Hebrides, the islands were, until becoming
independent on 30 July 1980, jointly administered by France and the United
Kingdom. The capital is Port Vila and the population approximately 200,000.
There exists a large number of indigenous languages with a national language
known as Bislama, or Pidgin English. English and French are official languages
and widely used in the capital.
Vanuatu became a Republic within the British Commonwealth in 1980.
Its parliament has a unicameral chamber of 52 members, and general
elections are held at least every four years. The President, who is head of
state, is elected for five years by an electoral college. Law is based on both
the English and French systems although commercial law is extensively
modelled on English Common law. The currency is the Vatu which varies in
value against a basket of currencies (at the time of writing approximately
VT 100 = US$1).
Anti terrorism
Vanuatu is a signatory to the International Convention for the Suppression
of the Financing of Terrorism. That Convention has been incorporated into
domestic law via a multitude of statutory instruments dealing with mutual
assistance in criminal matters through to substantive counter-terrorism
measures.
Immigration and residence
Those persons wishing to live in Vanuatu must do so by virtue of a residence
permit, which can last for up to 15 years and is renewable. Residence permits
are issued to either essential employees, investors or wealthy immigrants
retiring to Vanuatu. A person seeking to retire to Vanuatu, must have
sufficient wealth, invest sufficiently in Vanuatu and enter into a bond to cover
possible repatriation. Before obtaining a residence permit evidence must be
supplied with regard to the individual’s good character and wealth.
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There is a system of work permits which are issued where there is a lack of
locally qualified staff. In addition to having a work permit an individual must
have a residence permit.
The setting up of all new businesses is subject to the issue of an approval
from the Vanuatu Investment Promotion Authority (VIPA). Approvals are
readily given where the investment is perceived to be beneficial to the
economy.
Individuals must be resident for not less than ten years (continuous or
in aggregate, with allowance for normal travel and holidays out of the
country) to apply for citizenship. The citizenship committee meets several
times during a year to assess applications. Residency is easy to obtain as a
result of an employment contract or as an investor or retiree. Investors can
obtain residency permits of one to 15 years depending on the quantum of
investment. All foreign investment must have prior approval of the VIPA.
If the project is approved, residency permits will be granted. Information on
residency or investment can be obtained from any lawyer, accountant, trust
company or the VIPA.
Vanuatu at a glance
Capital
Port Vila
Population
200,000
Currency
Vatu (VT)
Exchange rate (as at 01.10.08)
100 VT = $US1
Official languages
Bislama, English, French
Time zone
GMT +11
Head of state
President
Area
12,200 square kilometres
Date of independence
30 July 1980
Government type
democratic Republic
Electoral cycle
Four years
Legal system
Primarily English common law
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Company law
Vanuatu company law was previously only found in the Companies Act
(Cap 191). This Act is based on the UK Companies Act 1948 as altered and
extended by the UK Companies Act 1967. Thus, in addition to having the usual
limited liability company, it is also possible to have a company limited by
guarantee and an unlimited company.
Companies set up under Cap 191 to do offshore work are known as exempted
companies, with local companies undertaking domestic work. An exempted
company is one whose business is carried on outside Vanuatu although,
provided there is no trading within Vanuatu, this can include matters directed
from Vanuatu. Local companies are permitted to carry on business in Vanuatu
and are required to make full returns, although their accounts need not be
audited if their annual turnover is less than approximately US$200,000.
Companies are also divided between public and private (i.e. where there are
50 members or less and the transfer of shares is restricted). If the company
is to be a local company details of the beneficial ownership of the company
must be given. Details of the beneficial ownership of exempted companies
are not disclosed.
International companies
The International Companies Act (1992) provides for a type of company
called an international company. Both local and exempted companies can be
converted into an international company. The following information applies to
the International Companies Act, unless otherwise indicated.
(i) Formation
It is possible to reserve names, but names may not be used where they
inappropriately suggest a financial institution or a connection with an official
government department or are similar to or the same as an existing company.
One copy of the proposed constitution must be submitted to the Financial
Services Commission. Separate articles are not necessary. The company must
have the term ‘Limited’, ‘Ltd’, or such other similar designator as commonly
used elsewhere or an abbreviation thereof in any language. There need only
be one incorporator under the constitution who need not be a shareholder.
The government fee of US$150 is paid on formation and the annual
government fee of US$300 is payable on 30 June each year (reduced to
US$150 if the company was not in existence the previous 31 December).
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(ii) Preincorporation contracts
Preincorporation contracts may be ratified by an international company
upon incorporation.
(iii) Share capital
Complete flexibility with shares which may take any form or as an alternative
there need not be a share capital. A company may buy back its own shares
and hold them as treasury stock, or they may also be cancelled, so long as at
least one shareholder remains who is not the company itself.
(iv) Members
A minimum of one member is required, and he/she/it may be of any nationality.
(v) Officers
The company may choose whether or not to have officers other than one
director, which may be a corporation, and can be resident anywhere.
(vi) Registered agent
There must be a registered agent in Vanuatu. The statutory books (Minute
Book, Register of Officers and Register of Charges) can be kept anywhere
in the world, in any currency, but the Financial Services Commissioner (‘the
Commissioner’) may direct that they be brought to Vanuatu. The register of
members must be maintained in Vanuatu.
(vii) Meetings
It is not necessary to have a physical annual general meeting. The directors
can meet by any means anywhere in the world.
(viii) Accounts and annual returns
The accounts may be kept anywhere in the world, in any currency, but must
be brought to Vanuatu if the Commissioner directs. There is no annual return.
An annual certificate is required certifying:
(a) there has been no public subscription for shares in the company;
(b) the company books and records have been properly maintained; and
(c) the company has not carried on any business in Vanuatu, except as
permitted by the Act.
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(ix) Confidentiality for international (and exempted) companies
The confidentiality of international (and exempted) companies is provided for
in two ways:
(a) by keeping all statutory records confidential and protected by
the law; and
(b) by allowing trials relating to them to be held in camera with no public
record.
VT 100 million (US$1,000,000)
(iv) A mutual company
• a reserve fund equal to the value of its current liabilities plus 15% of its
liabilities.
(v)
Captives – refer to page 7.
The Commission may allow an insurer a lesser amount after taking into account
the scope and class of business and projected volume of premium to be written.
In certain circumstances, information about the Vanuatu companies can be
shared with authorities in other countries.
Insurance company, broker and agents fees
(x) Distribution of assets and dissolution
(i)
Local or external insurer
A company may at any time pay dividends out of capital or gift assets to
third parties, so long as the company remains solvent.
Fees
Application
Annual
Company formation
Nil
US$500
(xi) Redomiciliation
Licence
US$500
US$3,000
Vanuatu companies may redomicile to another jurisdiction. It is also possible,
where the current law governing the company does not preclude it, for
a non-Vanuatu company to redomicile into Vanuatu. The shareholders
must agree and the creditors must not be prejudiced. An approval for
redomiciliation is good for three years.
Insurance companies
Local and exempted insurance companies may be set up under the Insurance
Act 2005 & Insurance Regulations 2006 and the Protected Cell Company Act
2005.
Applications are dealt with by the Commissioner. Evidence of beneficial
ownership, financial standing, experience of the managers and a business
plan must be submitted.
Minimum capital requirements for insurers carrying on the following business:
(i)
(ii)
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(iii) Pure reinsurance business
(other than as captive)
General business
• Domestic insurer
• International insurer
VT 30 million (US$300,000)
VT 30 million (US$300,000)
Life business
• Domestic insurer
VT 30 million (US$300,000)
(ii) Intermediary (broker/Insurance manager)
Fees
Application
Annual
Company formation
Nil
US$500
Licence
US$500
US$1,000
(iii) Insurance intermediary (agent)
Fees
Application
Annual
Company formation
Nil
US$500
Licence
US250
US$500
(iv) International insurer or reinsurer
Fees
Application
Annual
Company formation
Nil
US$500
Licence
US500
US$5,000
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Trusts
(iv) bank and other references required;
(v)
English law of general applicability that applied as of 30 July 1980, including
legislation based on the UK Perpetuities and Accumulations Act 1964, is
applicable. One possible disadvantage is that the rule against accumulations
beyond 21 years may cause problems for some longterm discretionary
settlements. The perpetuity period is lives in being and 21 years or 80 years.
Trusts are not publicly registered although there is a stamp duty payable on
the instrument constituting them. The stamp duty relates to the value of the
property put into the settlement by instrument (0.5% – subject to a minimum
of VT 7,500).
licences non-transferable;
(vi) only banking activities allowed;
(vii) quarterly returns to be filed with the Banking Supervisor;
(viii) annual audited accounts to be filed;
(ix) the chief executive officer must be approved by the Banking
Commissioner,
(x)
bank must comply with international capital adequacy guidelines;
(xi) accounts need not be published;
(xii) profits are exempt from taxes;
Offshore trusts
(xiii) all transactions are exempt from exchange controls by statute;
New legislation has yet to be passed to provide measures for: (a) the
exclusion of foreign forced heirship; (b) asset protection; (c) recognition of
the proper law of trust and the abolition of the rules against perpetuities and
accumulations.
(xiv) suspicious transaction reporting is mandatory;
Investor protection:
setting up banks and investment vehicles
(xvi) periodic inspection by the Reserve Bank of Vanuatu.
Banks
It is technically possible to have an exempted company registered as a bank
under the international Banking Act, in which case full disclosure requirements
apply. The International Banking Act was effective from 1 January 2003 and
the information that follows reflects the new provisions.
An international bank must only undertake offshore work. However it may do
business in Vanuatu either with other exempted banks or in a manner that is
incidental to offshore business. An international bank is free from many of the
conditions that normally apply to onshore banks. The principal attributes are:
(i)
shareholder’s interests of not less than US$500,000;
(ii)
full disclosure of beneficial owners and key management;
(xv) bank must have physical premises and one or more full time Vanuatu
resident employees who are knowledgeable about the day to day
running of the bank;
An international bank must use the word ‘bank’ or an equivalent to indicate
its activities. Whilst the above relaxed requirements apply where a recognised
international financial institution is to be the beneficial owner of the offshore
bank, higher criteria are applied where the owner cannot be so described.
In such a case a higher paid-up capital may be required and in addition
references will be required as well as evidence that the bank will be run by
competent persons of probity who are suitably experienced in the running
of such institutions. In order to evaluate this information full details of the
intended activities of the bank are required, including a business plan.
There has been a policy of not granting licences to banks that intend to
provide chequing facilities for members of the public. There are currently
approximately seven licensed International banks.
(iii) no more than 20% change of ownership without government approval;
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Prevention of Fraud (Investments) Act [CAP.70]
Trust companies
Except where an exempt company is trustee for only one particular trust,
professional trust business, including acting as an executor and administrator
of estates, comes under the Trust Companies Act (Cap 69).
Fees
Application
Annual
Application for a
principal’s Licence
Nil
VT 2,500
Trust companies must be licensed and must have a sufficient paid-up capital
(US$125,000 if incorporated in Vanuatu, otherwise US$500,000). In addition,
full details of those running the company and of the beneficial owners must
be with suitable references.
Application for a
representative’s Licence
Nil
VT 1,500
Exchange control and taxation
The trustee must have the minimum paid up capital of approximately
US$125,000.
There is no exchange control.
Investment vehicles
Vanuatu has extensive legislative mechanisms dealing with money laundering.
They operate on two levels:
Legislation (the Prevention of Fraud (Investment) Act (Cap 70)) exists for
dealers in securities.
Separate pieces of legislation have been introduced to establish mutual funds
(Mutual funds Act No. 38 of 2005) and the creation of unit trusts (Unit Trust
Act No. 36 of 2005). Fund managers must be resident in Vanuatu.
Money laundering
• Prevention: The Financial Transactions Reporting Act 2000 sets out
mandatory suspicious transaction reporting requirements which are
enforced by Vanuatu’s Financial Intelligence Unit. At a transactional level,
all local banks have extensive “know your customer” protocols. It is on the
strength of this framework that Vanuatu has remained off the Financial
Action Task Force blacklist; and
Unit Trusts Act No. 36 of 2005
Fees
Application
Annual
Registration of a Unit
Trust Scheme
US$1,000
US$1,000
Manager’s Licence
US$1,000
US$1,000
Mutual Funds Act No. 38 of 2005
Fees
Application
Annual
Foreign mutual fund
Licence or a general
mutual fund Licence
US$1,000
US$1,000
Mutal fund
adminstrator’s Licence
US$1,000
• Criminalisation: Money laundering is a criminal offence under the Proceeds
of Crime Act 2002. The terms “property” and “proceeds of crime” are
defined broadly to encompass property of any type that directly or
indirectly represents the proceeds of crime. Powers of confiscation, freezing
and forfeiture are all available under the Act. Vanuatu has established a
Transnational Crime Unit dedicated entirely to the investigation of money
laundering and terrorist financing.
Taxation
(a) Direct taxation
US$1,000
Vanuatu has no income tax, capital gains tax, tax on wealth, estate duty or
inheritance tax. Every international company is granted, by statute, a 20 year
exemption from taxation on the condition that it remains solvent.
As Vanuatu does not have income tax, there are no double taxation agreements.
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(b) Indirect taxation
The following domestic taxes exist:
• Import and export duties;
• Harbour and airport dues;
• Licence fees on businesses;
Upon registration, a fee is payable which is at a reducing graduated rate
based on net tonnage. The annual tonnage tax is on a reducing scale from
0.25 to 0. 10 per tonne. There is no stamp duty on bills of sale. There is no
requirement for a shipping company to submit audited accounts. There is an
emergency flag transfer procedure which may be invoked even where the
transfer does not have the approval of the existing flag state. Charges (liens)
registered under the Maritime Act need not also be registered under the
Companies Act.
• VAT of 12.5% (not applicable to offshore transactions);
• Stamp duty: 2% on land transactions; 2% on leases; 0.6% on share transfers
(1.8% if bearer securities or 4% if company has an interest in land situated in
Vanuatu); and 1% on other documents;
• Debits tax on each financial transaction varying from 7¢ to US$3.00;
• Landlord tax on property rental of 12.5%.
Travel
Vanuatu is 2.5 hours flying time North East of Brisbane and 3 hours from
Sydney, Australia. It is a little under 3 hours from Auckland, New Zealand.
There are regular flights available through: Air Vanuatu, Air Calin, Air New
Zealand, Air Pacific and Virgin Pacific Blue. Some of these airlines also offer
onward flights to all international destinations.
Other matters
Secrecy
Details relating to international, exempted and licensed trust companies are
covered by an obligation of secrecy that is backed by criminal sanctions.
Members of the public have no right to obtain detailed information about
such companies. The obligation of secrecy applies to government officials
and to others in possession of such confidential information.
A breach of secrecy can result in a fine and/or up to five years in prison.
Confidentiality will not apply when information is required with regard to
serious criminal offences, including drug trafficking, money laundering and
terrorism. Exchange of information between relevant bodies is authorised.
Acknowledgement
Shipping register
The shipping law is modelled on that of Liberia and non-statutory US
maritime law applies. Special surveys are required to register ships that are
more than 20 years old. There are no obligations to employ Vanuatu citizens
as crew or officers although the Vanuatu Maritime College produces qualified
seafarers.
The Vanuatu Financial Services Commission wish to thank the following
for their contribution to this booklet:
•
•
•
•
Pacific International Trust Co Ltd
Riskman International
Vanuatu Tourism Office
Vanuatu Maritime Services Ltd
www.financial.com.vu/pitco
www.riskman.vu
www.vanuatutourism.com
www.vanuatuships.com
There are regional maritime offices in New York, London, Athens, Singapore,
Hong Kong and Yokohama which may effect registration. All of the major
international conventions apply. Ships registered in Vanuatu are usually
owned by Vanuatu companies.
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Useful addresses
Vanuatu Insurance Association
Professional Law body
C/- QBE Insurance
Box 186
Port Vila
Vanuatu
Vanuatu Law Society
C/- Ozols & Associates
PO Box 71
Port Vila
Tel: +678 26740
Fax: +678 24260
Email: ozols@vanuatu.com.vu
The Governing Bank
Reserve Bank of Vanuatu
PMB 9062
Port Vila
Tel: +678 23333
Fax: +678 24231
Email: resrvbnk@vanuatu.com.vu
www.rbv.gov.vu
Vanuatu Financial Services Commission
The Commissioner
Financial Services Commission
PMB 9023
Port Vila
Tel: +678 22247 Fax: +678 22242
Email: comphous@vanuatu.com.vu
www.vfsc.vu
www.insurance.vu
Tel: +678 22299
Fax: +678 23298
Email: info.van@qbe.com
Immigration Office
Principal Immigration Officer
PMB 9092
Port Vila
Tel: +678 22354
Fax: +678 23142
Address of enquiry office for tax authorities
Customs and Inland Revenue
PMB 9012
Port Vila
Tel: +678 24544 ext 16
Fax: +678 22597
Insurance regulatory authority
Vanuatu Financial Services Commission (see left)
Financial Centre
Register of Shipping
Deputy Commissioner of Maritime Affairs for Republic of Vanuatu
12th Floor, 42 Broadway
Tel: +1 212 425 9600
New York
Fax: +1 212 425 9652
NY 10006
Email: mail@vanuatuships.com
USA
www.vanuatuships.com
Vanuatu Investment Promotion Authority
The Manager, Vanuatu Investment Promotion Authority
PMB 030
Tel: +678 22770
Port Vila
Fax: +678 25640
Email: cdi@vanuatu.com.vu
www.investinvanuatu.com
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The Vanuatu Financial Centre Association
PO Box 1128
Fax: +678 23405
Port Vila
Email: fincen@vanuatu.com.vu
www.fca.vu
(many banks, trust companies, accountants, lawyers, insurance providers etc
which offer services are jointly represented under this name)
Higher courts
Supreme Court
rue Querios
PMB 9041
Port Vila
Tel: +678 22420
Fax: +678 22692
Vanuatu Captive Insurance Association
Chamber of Commerce
C/- Riskman International
Box 137
Port Vila
Vanuatu Chamber of Commerce & Industry
PO Box 189
Tel: +678 27543
Port Vila
Fax: +678 27542
www.vanuatuchamber.com
Tel: +678 26065 +678 774 5024
Mobile: +64 21 970 910
Email: risk@vanuatu.com.vu
www.insurance.vu
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