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Offshore Trusts Report: Vanuatu

Legal Framework And Formation Rules and Fees

Trust managers in Vanuatu need to be incorporated as 'local' companies under the Companies Act since International Companies are not permitted to engage in trust management activity, although they can hold the shares of a company that does.

In Vanuatu there is no income or corporation tax, no capital gains tax, no VAT or sales tax, and no withholding tax. However, A stamp duty is assessable on each instrument of settlement at a rate of up to 1% (minimum VT 2,500). It is normal for the initial settlement to be under USD15,000 so the minimum stamp duty applies.

Further transfers, if made without an instrument (i.e., cash), to a Vanuatu trust require no further duty. Additional settlements made by an instrument which does not come under the jurisdiction of Vanuatu are not subject to stamp duty, but such instruments may not be admissible in court if it were needed as evidence, unless it was brought into the jurisdiction and the stamp duty paid at that time.

A Vanuatu discretionary trust has the following features:

  • A settlor need not be physically present in Vanuatu but must sign the trust deed; however the settlor may be a nominee.

  • The trust deed creating the trust may be executed anywhere in the world.

  • There is no register of trusts

  • The trustee may be advised by an appointor or protector.

  • There are no restrictions on the transfer of further capital nor the accumulation of income.

  • Trustees are allowed to borrow money on the security of trust funds.

  • The trust may exist for 80 years.

Trust management companies in Vanuatu are regulated by the Trust Companies Act Cap 69. Licenses, which are required for any company acting as trustee, executor or trust administrators, are issued by the Financial Services Commission.

To qualify for a licence, a trust management company must have:

  • minimum paid-up capital of VT12.5 m if its head office is in Vanuatu, or VT50m if not;

  • either a head office or a principal office in Vanuatu;

  • at least two corporate officers resident in Vanuatu.

The annual fee for a trust management license is VT200,000 at the time of writing.

A new Companies and Trust Service Providers Act was passed in 2010 although as of February 2011 the legislation had not been gazetted. The Act will require all service providers to be properly licensed and supervised by the Commission and is modelled on legislation in force in the Isle of Man. Under the new law, principals must pass a 'fit & proper' test. A new Trustee Act has also been proposed.

   

The Report

Offshore Trusts Guide: Introduction

The History of Offshore Trusts
Development of Professional Competence in the Jurisdictions
What Future for the Trust?
The New Age of Transparency
The Swiss Association of Trust Companies
The Society of Trusts and Estates Practitioners

Offshore Trusts Guide: Jurisdictions

Bahamas

Bahamas: Legal Framework and Formation Rules and Fees
Bahamas: 2006 Private Trust Companies Legislation

Barbados

Barbados: Legal Framework and Formation Rules and Fees
Barbados: Supervisory and Licensing Regime and Fees

Bermuda

Bermuda: Legal Framework and Formation Rules and Fees
Bermuda: Supervisory and Licensing Regime and Fees

British Virgin Islands

British Virgin Islands: Legal Framework and Formation Rules and Fees
British Virgin Islands: Special Trusts Act 2003
British Virgin Islands: The Trustee Act 2003
British Virgin Islands: :Supervisory and Licensing Regime and Fees
British Virgin Islands: New Laws on Private Trust Companies
British Virgin Islands: New Private Trust Company Regulations

Cayman Islands

Cayman Islands: Legal Framework and Formation Rules and Fees
Cayman Islands: Supervisory and Licensing Regime and Fees

Cook Islands

Cook Islands: Legal Framework and Formation Rules and Fees
Cook Islands: Supervisory and Licensing Regime and Fees

Cyprus

Cyprus: Legal Framework and Formation Rules and Fees
Cyprus: Supervision, Licensing and Tax

Gibraltar

Gibraltar: Legal Framework and Formation Rules and Fees
Gibraltar: Legislation, Regulation and Supervision

Guernsey

Guernsey: Legal Framework and Formation Rules and Fees
Guernsey: Trusts Law 2007

Isle of Man

Isle of Man: Legal Framework and Formation Rules and Fees
Isle of Man: Supervisory and Licensing Regime
Isle of Man: Uses Clients and Tax Treatment

Jersey

Jersey: Legal Framework and Formation Rules and Fees
Jersey: Supervisory and Licensing Regime
Jersey: Trusts Amendment Act 2006
Jersey: Foundations

Liechtenstein

Liechtenstein: Legal Framework and Formation Rules and Fees
Liechtenstein: Regulation Supervision and Transparency
Liechtenstein: Characteristics of Liechtenstein Trusts
Liechtenstein: Foundations

Madeira

Madeira: Legal Framework and Formation Rules and Fees

Malta

Malta: Legal Framework and Formation Rules and Fees
Malta: The Trust and Trustees Act 2004

Mauritius

Mauritius: Legal Framework and Formation Rules and Fees
Mauritius: Characteristics of the 2001 Trusts Act
Mauritius: Additional Provisions of the 2001 Trusts Act
Mauritius: Tax Treatment

Monaco

Monaco: Legal Framework and Formation Rules and Fees

Nevis

Nevis: Legal Framework and Formation Rules and Fees

New Zealand

New Zealand: Legal Framework and Formation Rules and Fees
New Zealand: Review of the Law of Trusts
New Zealand: Taxation of Trusts

Panama

Panama: Legal Framework and Formation Rules and Fees
Panama: Requirements for Acting as Trust Company in Panama

Seychelles

Seychelles: Legal Framework and Formation Rules and Fees

Turks & Caicos

Turks & Caicos: Legal Framework and Formation Rules and Fees
Turks & Caicos: The Voidable Dispositions Ordinance

Vanuatu

Vanuatu Legal Framework and Formation Rules and Fees

 


Vanuatu News

Aus Serious Financial Crime Taskforce Secures Convictions Thursday 16/6/2016 The Australian Taxation Office has welcomed the conviction of two men for tax offences following successful investigations under the Serious Financial Crime Taskforce.

European Parliament ACP Report Targets Tax Havens Monday 25/1/2010 The European Parliament has called on the European Commission and the governments of the African, Caribbean and Pacific states to 'include the fight against abuse of tax havens, tax evasion and illicit capital flight as a matter of priority' in the revised Cotonou Agreement, which governs relations between the European Union and the ACP states.

Ireland Tops Europe For Ease Of Paying Taxes Friday 8/1/2010 Ireland is the easiest country in Europe in which to pay business taxes for the third year running and the sixth easiest in the world, according to a new report by PricewaterhouseCoopers, the World Bank and the International Finance Corporation.

ATO Warns Against Offshore Life Insurance Policies Thursday 26/11/2009 The Australian Taxation Office has issued an alert that warns taxpayers to be cautious about investing in life insurance policies issued from insurance companies based in offshore jurisdictions, such as Vanuatu.

Pacific Islands To Negotiate New Trade Deal Tuesday 11/8/2009 The 40th South Pacific Islands Forum, held recently in Australia, agreed that Forum Trade Ministers should meet, no later than November this year, to discuss a framework for a new regional trade and economic integration agreement.

Crean Explains Next Step In Pacific Regional Trade And Economic Integration Thursday 18/6/2009 Australia's Minister for Trade, Simon Crean, and Parliamentary Secretary for International Development Assistance, Bob McMullan, have welcomed the outcomes of the 2009 Pacific Islands Forum Trade Ministers Meeting just concluded in Apia, Samoa.

IMF Concludes 2009 Article IV Consultation With Vanuatu Wednesday 3/6/2009 The IMF has concluded an Article IV consultation with Vanuatu. Economic performance has remained strong over the past several years - the impact of the global slowdown largely confined to spillovers via the tourism and foreign direct investment channels.

Australia's Crean Attends Informal Trade Minister Meeting Tuesday 12/5/2009 An informal meeting of Pacific Trade Ministers was convened by New Zealand in Auckland on May 9, 2009. Australia was represented by Trade Minister Simon Crean (pictured) and Parliamentary Secretary for International Development Assistance, Bob McMullan.

Australia To Discuss Trade Options With Pacific Islands Wednesday 1/4/2009 Australia's Minister for Trade Simon Crean and Parliamentary Secretary for International Development Assistance, Bob McMullan, will visit Vanuatu, the Solomon Islands, Samoa, Tonga and New Zealand from April 1-6, to consult with their counterparts on a range of trade and development issues.

IMF Concludes Article IV Consultation With Vanuatu Thursday 5/3/2009 The International Monetary Fund has concluded an Article IV consultation with Vanuatu, and released an IMF Staff Mission statement.