Background to Vanuatu Economic Citizenship

The History of Vanuatu citizenship by investment can be traced back to 1990’s when passport for sale schemes from pacific islands became very popular. Pacific island tax havens were among the first countries to enter the passport selling business in the 1980s and 1990s.  Vanuatu ran a passport for sale scheme between 1996-1997 selling 300 passport making $3.3 million, equivalent of 1.5% of GDP at that time. The passports offered several benefits including tax benefits,  overcoming visa restrictions, alternative second passport, and avoiding military service.

Vanuatu government revived the idea of opening new economic citizenship programs (ECP) to boost revenue after being hit by Cyclone PAM. The Cyclone Pam crippled Vanuatu’s infrastructure: an estimated 90 percent of the nation’s buildings were impacted by the storm’s effects bringing damages VT63.2 billion (US$600 million)

2014 – The Capital Investment Immigration Plan (CIIP) which was originally introduced in 2014, The objective of the plan is to create local jobs, stimulate the economy and keep the national budget balanced. The citizenship is for life, and does not require visiting Vanuatu.

2015 – Vanuatu Economic Rehabilitation Program (VERP), a fast track citizenship by investment scheme was introduced after Cyclone Pam (March 2015) to raise additional fund for recovery activities.

2016 – CIIP was replaced by Vanuatu Real Estate Option Program (REO Program) in November 2016

2017 – VERP is replaced by Vanuatu Development Support Program (VDSP) and Vanuatu Contribution Program (VCP) in March 2017. VDSP offers citizenship to foreign investors against one-time contribution, ranging from USD 200,000 for a single person application to USD 280,000 for a family with elderly parents. The offered “honorary citizenship” has most ni-Vanuatu rights except voting and political involvement. The application process requires a background check, including financial resources and criminal record, and takes between 1 to 2 months, making it one of the most fast-track citizenship programs in the world. However, citizens of North Korea, Yemen, Syria, Iraq, and Iran are not allowed to apply.

2018

The Vanuatu Government made important changes to the Citizenship by investment in 2018 to keep up with the competition with Caribbean programs. The Caribbean countries engaged a race to the bottom cutting prices by 50% to just $100,000 after Hurricane Maria devastated the islands. The Citizenship by Investment (Development Support Program and Contribution Program) Regulations 91/92 (2018) significantly cut the prices (from $200K) for passports for donation option to USD 80,000 (single person) and USD 100,000 (families)

2019

Vanuatu made significant changes to the DSP citizenship program in 2019. Here are the most important changes done to Vanuatu citizenship by investment program. On 24th April 2019, the Citizenship (Development Support Program) Regulations Order NO.33 of 2019 came into effect set a new threshold of selling prices USD 130,000 by agents.

•  More agents appointed for two passport schemes – DSP (more than 30 agents ) and VCP (1 agent)
• Applications of persons with criminal records will not be considered. There are also restricted countries, who cannot apply – Ineligible candidates
• Application Processing times significantly increased to less than a month.

2020

Vanuatu’s Citizenship Commission said issuance of honorary citizenship has ceased.  “Honorary Citizenship” terminology is canceled and removed from citizenship certificates. This was replaced by new regulations allowing either the Chairman of the Commission or the Prime Minister himself to sign the required documents cancelling out the “honorary” terminology as both passport schemes are the same.

The FIU was established in 2020,  regulates all financial institutions in Vanuatu as required by the AML&CTF

• FIU checks for for criminal conviction, FIU utilises several globally reputable screening databases in its due diligence process including checking INTERPOL database or past criminal conviction records , global blacklisting, sanctions, financial disqualification, corporate solvency, terrorism, individual bankruptcy and political-affluent persons.
• FIU also monitors of all successful applicants in the Program with re-screeing of checks and provides reports to Vanuatu citizenship commission (VCC) for adverse reports.
• VCC recommends the applicant to Prime Ministers office, for honorary citizenship

Upon confirmation from the FIU that the person has no criminal record, the TWG submits the name of the person to the Citizenship Commission for due diligence checking. Next, the Commission submits the name of the person to the Prime Minister who then advises the President on the name of the person to be conferred Citizenship under the VERP.

2021

The Vanuatu Citizenship Office has officially approved the second investment the Real estate REO program to invest in real estate for citizenship by investment.

2022

The European Commission expressed concerns of the Vanuatu investor citizenship program and has suspended visa waiver agreement for Vanuatu citizens who acquired investment passports after 2015.

2023

The Citizenship Act Amendments introduced a register for a new citizens.

Vanuatu Citizenship Acts

Download the legal texts of the citizenship act and amendments in PDF

• Vanuatu Constitution Law (2006)
• Vanuatu Citizenship Act [Cap_112]
• Citizenship regulations Order 91-95 of 2018
• Citizenship Regulations (Order 32-33) of 2019

CBI Revenues

Vanuatu CBI program has been a significant contributor to GDP of Vanuatu.Vanuatu passport revenues reached its peak in 2019 exceeding $100 million in revenues for that year alone, equivalent to 11.9 of GDP. This exceeded VAT revenues and even whole year’s of operating surplus of Vanuatu. IMF reported in 2018, the revenues of 5.7 billion Vatu revenues from the economic citizenship programs (ECPs) was used for unexpected expenses (Ambae disaster relief, and the mandated restoration of public benefit cuts) and early debt repayments (about 3.2 percent of GDP). As of 2020, Vanuatu has raised $340 million dollars from citizenship for sale, granting over 4000 passports to CBI citizens. Vanuatu has reached revenue target for 2021. Almost $90m dollars collected from citizenship sales on average every month. About 70 applications are approved monthly by national citizenship commission.

Source: Ministry of Finance (VUV exchange rate at 2020)