Table of Contents
- Executive Summary: Vanuatu’s Evolving Business Law Landscape
- Key Legal Frameworks and Regulatory Authorities
- 2025 Legislative Updates: What’s New in Business Law
- Company Formation: Registration, Licensing, and Compliance Essentials
- Corporate Taxation and Incentives: Latest Laws and Rates
- Foreign Investment: Entry Requirements and Restrictions
- Compliance, AML, and KYC: Meeting Regulatory Standards
- Dispute Resolution and Enforcement: Courts and Arbitration in Vanuatu
- Sector-Specific Laws: Financial Services, Real Estate, and More
- Future Outlook: Predicted Legal Developments Through 2029
- Sources & References
Executive Summary: Vanuatu’s Evolving Business Law Landscape
Vanuatu’s business law landscape is experiencing significant evolution in 2025, driven by both domestic reforms and international compliance requirements. The jurisdiction is renowned for its offshore financial services sector, but in recent years, the government has intensified efforts to modernize business legislation, enhance transparency, and align regulatory frameworks with global standards. Key areas of focus include company law, anti-money laundering (AML), and digital business regulation.
The Vanuatu Financial Services Commission (VFSC) has spearheaded reforms to the Companies Act, strengthening corporate governance and disclosure obligations. Amendments in 2023 and 2024 introduced stricter requirements for beneficial ownership registration, annual reporting, and director accountability. These changes are intended to bolster investor confidence and position Vanuatu as a credible jurisdiction for international business.
In response to pressure from the Financial Action Task Force (FATF) and the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes, Vanuatu has overhauled its AML and counter-terrorism financing regime. The Anti-Money Laundering and Counter-Terrorism Financing Act has been updated to require enhanced due diligence, suspicious transaction reporting, and robust supervisory mechanisms. These measures have resulted in Vanuatu being removed from some international “grey lists,” but ongoing monitoring remains in place.
Compliance has become a top priority for both regulators and businesses. The VFSC reported a 25% increase in compliance audits in 2024, with a focus on financial institutions, trust service providers, and virtual asset service providers. The growth of the digital economy has prompted new regulations on electronic transactions and the licensing of fintech startups. The Reserve Bank of Vanuatu continues to refine its oversight of digital payment systems to mitigate emerging risks.
Key statistics highlight the sector’s dynamism: as of Q1 2025, Vanuatu hosts over 4,800 registered international companies and 350 active financial licenses, according to the VFSC. The government projects moderate growth in new business registrations, underpinned by improved regulatory certainty and a streamlined business registration process.
Looking ahead, Vanuatu is expected to further harmonize its business laws with international norms, particularly in tax transparency and digital commerce. Continued collaboration with global standard-setting bodies and the adoption of new technologies in regulatory supervision will shape the business law landscape through 2025 and beyond.
Key Legal Frameworks and Regulatory Authorities
Vanuatu’s business law landscape is shaped by a blend of common law principles and statutory instruments, reflecting its history and its position as a regional financial and commercial hub. The principal legal frameworks governing business activities in Vanuatu include the Companies Act [CAP 191], the Business Names Act [CAP 211], and the International Companies Act [CAP 222]. These acts regulate company incorporation, business name registration, and the operation of both domestic and international business entities within Vanuatu.
The regulatory environment for businesses is primarily overseen by the Vanuatu Financial Services Commission (VFSC), which is responsible for company registration, regulation of international companies, and supervision of financial service providers. The Vanuatu Customs and Inland Revenue (VCIR) administers tax compliance, including value-added tax (VAT) and related fiscal obligations, a critical aspect for both local and foreign businesses. In parallel, the Reserve Bank of Vanuatu (RBV) acts as the central bank, overseeing monetary policy and providing regulatory oversight for financial institutions, particularly in areas related to anti-money laundering and counter-terrorism financing.
Legal compliance requirements for companies operating in Vanuatu include annual renewal and filing obligations with the VFSC, as well as compliance with the Anti-Money Laundering and Counter-Terrorism Financing Act [CAP 268]. In recent years, enforcement of these compliance standards has intensified, as the government seeks to maintain Vanuatu’s international standing and mitigate risks of being blacklisted by intergovernmental organizations. Notably, amendments to the Companies Act in 2023 streamlined registration processes and introduced stricter beneficial ownership disclosure requirements, a move aligned with international transparency standards.
Statistically, as of mid-2024, the VFSC reported over 5,000 active international companies registered in Vanuatu, alongside a growing number of domestic business registrations. The increasing adoption of digital registration platforms has contributed to a rise in new incorporations, with the VFSC’s online business registry facilitating faster and more transparent processes for compliance and reporting.
Looking ahead to 2025 and beyond, further modernization of business laws is anticipated, with the VFSC and related authorities expected to enhance digital services and strengthen regulatory oversight. Ongoing engagement with the Financial Action Task Force and regional bodies will continue to drive legal and compliance reforms, ensuring Vanuatu remains an attractive yet reputable jurisdiction for business activity in the Pacific.
2025 Legislative Updates: What’s New in Business Law
In 2025, Vanuatu’s business law landscape is evolving in response to both international obligations and domestic economic objectives. Major legislative updates are focused on enhancing transparency, aligning with global standards on anti-money laundering (AML) and counter-terrorism financing (CTF), and improving the ease of doing business to attract investment.
A key development is the continued implementation of the Companies (Amendment) Act No. 16 of 2022, which modernizes company registration processes, strengthens director and beneficial ownership disclosure requirements, and facilitates electronic filings. These reforms aim to boost compliance with the Financial Action Task Force (FATF) recommendations, a priority since Vanuatu’s removal from the FATF ‘grey list’ in 2021. The Vanuatu Financial Services Commission (VFSC) has issued updated guidance to ensure companies meet new reporting obligations and face stricter penalties for non-compliance.
The Anti-Money Laundering and Counter-Terrorism Financing (Amendment) Act No. 13 of 2023 is another cornerstone for 2025. This legislation expands the scope of reporting entities, requires enhanced due diligence for high-risk customers, and introduces more robust record-keeping standards. The Reserve Bank of Vanuatu and the Vanuatu Financial Intelligence Unit are jointly responsible for monitoring compliance, and regular audits are expected to increase throughout 2025 and beyond.
In terms of business registration, the VFSC reports a steady increase in new company incorporations, with 2024 statistics indicating over 900 companies registered—a 7% rise year-on-year. This growth is attributed to streamlined online processes and reduced administrative barriers. Additionally, reforms targeting the Business Names Act and Partnership Act are under consideration, aiming to further simplify the legal environment for micro, small, and medium-sized enterprises (MSMEs).
Looking ahead, the government has signaled its intention to review the Insolvency Act and introduce new regulations governing digital assets and fintech operations, reflecting the rise of virtual business models. Consultations with the Ministry of Finance and Economic Management are underway, with draft bills expected to be tabled in late 2025.
Overall, Vanuatu’s legislative updates in 2025 emphasize compliance, transparency, and modernization, positioning the jurisdiction to remain competitive and reputable in the Pacific region’s business sector.
Company Formation: Registration, Licensing, and Compliance Essentials
Vanuatu offers a favorable environment for company formation due to its streamlined regulatory processes and commitment to fostering international business. The primary legislation governing company registration is the Companies Act [CAP 191], which outlines the incorporation, operation, and dissolution of companies. The Vanuatu Financial Services Commission (VFSC) is the central authority responsible for company registration, licensing, and oversight of compliance.
As of 2025, the VFSC has continued to modernize its online registration system, allowing both local and international applicants to incorporate companies efficiently. Most companies can be registered within a matter of days, provided all documentation is in order. The most common types of entities include International Companies (ICs), Local Companies, and Limited Liability Companies (LLCs), each with distinct compliance requirements.
- Registration Process: Applicants must submit a company name reservation, memorandum and articles of association, and details of directors and shareholders. The VFSC requires at least one director and shareholder for ICs, with no residency requirement.
- Licensing: Certain business activities, such as banking, insurance, and financial services, require additional licenses from relevant authorities, like the Reserve Bank of Vanuatu for financial institutions.
- Compliance: Recent years have seen increased emphasis on anti-money laundering (AML) and counter-terrorism financing (CTF) compliance. All companies must adhere to the Vanuatu Financial Intelligence Unit (FIU) regulations, including customer due diligence and regular reporting.
- Annual Requirements: Companies are required to file annual returns and pay renewal fees. Failure to comply can result in penalties or deregistration.
- Key Statistics: According to the VFSC, over 5,000 international companies were active as of 2024, with steady year-on-year growth projected through 2025 as digital registration attracts more foreign investors (Vanuatu Financial Services Commission).
Looking ahead, Vanuatu is expected to enhance regulatory oversight in response to evolving global standards, particularly around beneficial ownership disclosure and AML/CTF. The government is also exploring further digitization of compliance processes, aiming to balance international obligations with the country’s reputation as a flexible, business-friendly jurisdiction (Vanuatu Financial Services Commission).
Corporate Taxation and Incentives: Latest Laws and Rates
Vanuatu remains a notable jurisdiction for its unique corporate taxation framework, characterized by the absence of personal income, corporate income, capital gains, and withholding taxes. As of 2025, these fundamentals are unchanged and continue to be a significant draw for both domestic and international investors. The government of Vanuatu has not announced any plans to introduce corporate income tax in the near future, maintaining its reputation as a tax-neutral jurisdiction for businesses.
Under the Vanuatu Financial Services Commission (VFSC) regulatory regime, international companies registered in Vanuatu benefit from zero direct taxation on profits, dividends, or capital gains. Local businesses, however, are subject to indirect taxes such as Value Added Tax (VAT) at a standard rate of 15%, and certain business license fees. The Department of Customs and Inland Revenue oversees VAT compliance and enforcement, with ongoing efforts to strengthen tax administration and compliance mechanisms.
In recent years, Vanuatu has faced international pressure to improve transparency and combat tax evasion. In response, the government has enacted several reforms to align with global standards, most notably through the implementation of the International Companies (Amendment) Act and compliance with the OECD’s requirements for economic substance. Companies engaged in banking, insurance, and trust services are now required to demonstrate substantial activities and local presence, including maintaining adequate staff and premises in Vanuatu.
Foreign investment incentives remain robust. The Vanuatu Investment Promotion Authority (VIPA) continues to administer a streamlined approval process for foreign investors, offering exemptions from import duties for approved projects and facilitating fast-track business licensing. The government has also prioritized sectors such as tourism, agriculture, and information technology for further incentives, aiming to diversify the economy and attract sustainable investment.
Statistically, Vanuatu’s business registry reported steady growth in new international company registrations between 2022 and 2024, despite global economic uncertainties. The VFSC cited a 7% annual increase in new incorporations in 2023, a trend expected to continue as long as the zero-tax regime remains in place.
Looking ahead to 2025 and beyond, Vanuatu is expected to maintain its tax-neutral regime but will likely strengthen compliance, transparency, and anti-money laundering frameworks to satisfy international standards. Businesses considering Vanuatu should monitor evolving substance and reporting requirements, as the nation balances its attractiveness as an offshore center with global regulatory expectations.
Foreign Investment: Entry Requirements and Restrictions
Vanuatu remains an attractive destination for foreign investors due to its straightforward regulatory environment and favorable tax regime. The government continues to encourage foreign direct investment (FDI), primarily via the Vanuatu Investment Promotion Authority (VIPA), which is responsible for facilitating and regulating investment entry. As of 2025, foreign investors are required to submit detailed business proposals and obtain an investment approval certificate from VIPA prior to commencing operations.
Entry requirements for foreign investors include a minimum investment threshold, which varies by sector. For most business activities, investors must demonstrate a minimum paid-up capital starting from VT 5,000,000 (approx. USD 42,000). Certain sectors, particularly those considered sensitive or strategic (e.g., land ownership, media, and fisheries), may be subject to higher scrutiny and sector-specific restrictions. Full foreign ownership is permitted in many sectors, but activities such as retail trade, transportation, and agriculture may require joint ventures with local partners or are reserved for Ni-Vanuatu citizens in accordance with the Reserved and Restricted Activities List administered by VIPA.
Foreign investment is also governed by the Land Reform Act, which restricts non-citizens from owning land outright; leasehold arrangements (up to 75 years) are the primary option for foreign investors. Compliance with immigration requirements is essential, and foreign investors must secure appropriate residence or work permits from the Vanuatu Department of Immigration. Additionally, compliance with anti-money laundering and counter-terrorism financing laws is enforced by the Reserve Bank of Vanuatu.
In 2024, VIPA reported that foreign investment applications focused on tourism, construction, and financial services, with over 250 new applications approved—an 8% increase year-on-year. The government has indicated plans to further streamline the application process and digitalize compliance checks by 2026, aiming to reduce processing times and enhance transparency (Vanuatu Investment Promotion Authority). Despite these improvements, investors may still encounter bureaucratic delays and complex land registration procedures.
Looking ahead, Vanuatu is expected to maintain its open stance towards foreign investment while gradually increasing oversight and compliance requirements, especially as it aligns with international standards on financial transparency and business conduct. Investors should monitor updates to the reserved activities list and evolving compliance obligations to ensure ongoing adherence to Vanuatu’s business laws.
Compliance, AML, and KYC: Meeting Regulatory Standards
Vanuatu’s business law environment has seen significant tightening of compliance, anti-money laundering (AML), and know-your-customer (KYC) standards, especially in light of its ambitions to maintain international legitimacy and attract reputable investment. The regulatory framework is anchored by the Reserve Bank of Vanuatu (RBV), which supervises financial institutions and enforces compliance with global standards.
The Financial Intelligence Unit (FIU) is the central agency for AML/CFT enforcement, empowered by the Anti-Money Laundering and Counter-Terrorism Financing Act 2006. This law, amended several times (most recently in 2023), requires all reporting entities—including banks, company service providers, and digital asset businesses—to conduct robust KYC checks, ongoing due diligence, and suspicious transaction reporting.
In 2023, Vanuatu successfully exited the FATF “grey list”, after implementing 100% compliance with recommended action items, including stricter customer verification and enhanced beneficial ownership transparency. The Vanuatu Financial Services Commission (VFSC) plays a pivotal role in licensing and supervision of non-bank financial entities, and now requires all licensees to have documented AML/KYC policies, regular staff training, and independent compliance audits.
Recent data from the FIU Annual Reports indicate a 23% increase in suspicious transaction reports from 2021 to 2023, reflecting both greater vigilance and improved systems. The RBV has also issued updated compliance guidelines for digital financial services, with specific focus on virtual assets and fintech, sectors expected to grow by over 30% by 2027.
- All new company registrations must provide ultimate beneficial owner (UBO) information and demonstrate effective internal controls (Vanuatu Financial Services Commission).
- On-site inspections and risk-based supervision have increased, with the VFSC and FIU collaborating on enforcement action against non-compliant entities.
- Penalties for AML breaches have been raised, including license suspension and fines up to VT 25 million (approx. USD 210,000).
Looking ahead to 2025 and beyond, Vanuatu’s regulators are expected to further align with evolving FATF standards, especially in digital assets and cross-border transactions. Businesses operating in or entering Vanuatu must prioritize compliance infrastructure and ongoing staff education to mitigate regulatory and reputational risks.
Dispute Resolution and Enforcement: Courts and Arbitration in Vanuatu
Vanuatu’s dispute resolution and enforcement landscape continues to evolve, reflecting both local legal traditions and international commercial practice. The country’s dual court system—comprising the Magistrates’ Courts and the Supreme Court—remains the primary forum for resolving business disputes. The Supreme Court of Vanuatu has original jurisdiction over civil and commercial matters exceeding 1 million Vatu, while the Magistrates’ Courts address lower-value claims, including many business-related contractual issues (Vanuatu Government).
In recent years, the Vanuatu judiciary has emphasized efficiency and transparency in dispute resolution, introducing case management reforms and encouraging alternative dispute resolution (ADR) methods. Mediation is increasingly promoted, particularly for commercial disputes, to reduce court backlogs and promote quicker settlements (Vanuatu Government).
Arbitration is recognized under the Arbitration Act [CAP 162], which provides a legal framework for both domestic and international arbitration proceedings. While Vanuatu is not yet a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, its courts generally uphold arbitration agreements and enforce arbitral awards in line with domestic law. This framework is particularly relevant for offshore finance and international business operations, sectors where parties often prefer neutral, private dispute resolution mechanisms (Vanuatu Financial Services Commission).
Enforcement of judgments remains a crucial aspect of business law compliance. The Supreme Court’s decisions are enforceable throughout Vanuatu, with mechanisms for execution of judgments such as garnishment, asset seizure, and appointment of receivers. However, cross-border enforcement of foreign judgments can be complex, as it is subject to the doctrine of reciprocity and specific court orders (Vanuatu Government).
Looking ahead to 2025 and beyond, Vanuatu is expected to further strengthen its legal infrastructure for dispute resolution. Proposed reforms include potential amendments to the Arbitration Act to align more closely with UNCITRAL Model Law standards and ongoing judicial training to improve commercial case handling. These measures aim to enhance investor confidence, ensure fair enforcement, and position Vanuatu as a reliable jurisdiction for business dispute resolution in the South Pacific region.
Sector-Specific Laws: Financial Services, Real Estate, and More
Vanuatu’s business law landscape is shaped by its status as a leading offshore financial centre in the Pacific, with sector-specific regulations for financial services, real estate, and other key industries. The regulatory environment in 2025 continues to evolve in response to international standards and domestic economic goals.
Financial Services
The Reserve Bank of Vanuatu (RBV) and the Vanuatu Financial Services Commission (VFSC) are the primary regulators. The Financial Dealers Licensing Act [CAP 70] and Banking Act [CAP 63] govern foreign exchange, securities, banking, and insurance operations. In recent years, Vanuatu has tightened anti-money laundering (AML) and counter-terrorism financing (CTF) compliance, responding to evaluations by the Financial Action Task Force (FATF). The VFSC introduced stricter due diligence requirements and mandatory local office presence for license holders, contributing to a reduction in the number of licensed financial entities from over 400 in 2017 to fewer than 150 in 2024.
In 2024–2025, the Virtual Asset Service Providers Act came into full effect, formalizing the licensing and supervision of crypto and virtual asset operators. This move aims to align Vanuatu with global AML/CTF standards and attract legitimate fintech investment.
Real Estate
Land in Vanuatu is governed primarily under the Ministry of Lands and Natural Resources. Foreigners cannot own land outright but may obtain leases up to 75 years. The Land Leases Act [CAP 163] and related regulations establish processes for title registration, mortgage, and dispute resolution. In 2023–2025, the government prioritized digital transformation by piloting electronic land registry systems to increase transparency and combat fraud.
The real estate sector remains attractive to international investors, particularly via the Vanuatu Development Support Programme, which links real estate investment with citizenship opportunities (Vanuatu Financial Services Commission). Regulatory scrutiny has increased to prevent misuse of these pathways for money laundering.
Other Sectors
Company incorporation, insolvency, and trustee services are regulated by the VFSC under the Companies Act [CAP 191] and Insolvency Act [CAP 280]. Recent reforms have streamlined online registration and reporting, supporting Vanuatu’s ambitions as a business-friendly jurisdiction.
Outlook
In the coming years, Vanuatu is expected to further strengthen its regulatory framework to enhance investor confidence and maintain compliance with international standards, particularly in financial services and real estate. The ongoing digitalization of registries and licensing, coupled with proactive AML/CTF enforcement, positions Vanuatu for sustainable growth and greater integration with the global economy (Reserve Bank of Vanuatu).
Future Outlook: Predicted Legal Developments Through 2029
Looking ahead to 2029, Vanuatu’s business law environment is poised for significant evolution, driven by both domestic regulatory reforms and external pressures, particularly from international organizations and trading partners. The nation’s ongoing commitment to strengthening its anti-money laundering (AML) and combating the financing of terrorism (CFT) frameworks will remain a primary focus. This is in line with recommendations from the Vanuatu Financial Intelligence Unit and responses to evaluations by the Financial Action Task Force. Since Vanuatu was removed from the FATF “grey list” in 2018 following substantial legislative improvements, the government is expected to maintain momentum with periodic updates to its AML/CFT laws to ensure ongoing compliance and avoid future blacklisting.
Corporate governance is another domain likely to see legislative refinement. The Vanuatu Financial Services Commission has signaled continued review of the Companies Act and related statutes, aiming to align them with international best practices in transparency and beneficial ownership disclosure. This is particularly relevant as Vanuatu seeks to attract reputable foreign direct investment while deterring misuse of its corporate registry for illicit purposes.
Taxation policy is undergoing active reform. The government, with technical support from the International Monetary Fund, is exploring the gradual introduction of new tax mechanisms—such as a value-added tax (VAT) or corporate income tax—by 2027 to broaden the revenue base and reduce reliance on indirect taxes and international aid. This could significantly alter the compliance landscape for businesses operating in Vanuatu, requiring upgraded accounting and reporting systems.
Furthermore, the digitization of business registration and regulatory filings is a top priority through 2029. The VFSC Online Services platform is set for phased enhancements, promising greater efficiency and transparency in company formation, annual returns, and licensing. Digital compliance tools are expected to become mandatory for most entities by 2026, in line with regional trends.
Key statistics point to a resilient business sector: as of late 2024, Vanuatu had over 8,000 registered international companies and more than 1,000 local business entities (Vanuatu Financial Services Commission). These figures are projected to grow moderately as regulatory certainty and infrastructure improve.
In summary, the next five years will likely see Vanuatu’s business law framework becoming more robust and internationally harmonized, with a strong emphasis on compliance, transparency, and digital transformation. Businesses should anticipate ongoing regulatory updates and invest in compliance capacity to navigate the evolving landscape.
