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
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
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