Property and Land Investments in Vanuatu

Land prices have been increasing steadily in Vanuatu over the last decade, making real estate investments highly attractive.

Vanuatu’ s land tenure system guarantees stability for those people in the world who are dreaming of escaping a “sea change” to tropical paradises of the South Pacific.

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10 reasons why land prices are going up in Vanuatu

Here are 10 reasons why land prices – especially waterfront land prices – have been moving steadily upwards in Vanuatu.

Many investors turn to real estate when the world economy becomes unstable
The political and social problems in Papua New Guinea, the Solomon Islands and neighboring Fiji have turned investors away from these areas and Vanuatu is the choice jurisdiction base for business and holiday property holdings.
The Government of Vanuatu openly encourages foreign investment and has passed a suite of legislation – such as the Strata Titles Act – to make it easier for people to invest with good returns quite achievable.
The government has streamlined Foreign Investment , Customs, and Immigration procedures to make the formalities of investing and taking up residency as painless as possible.
Unlike Fiji and New Caledonia, the nearest competitors in the tourism sector, Vanuatu is free of ethnic or colonialist problems. The small population is 99% Ni-Vanuatu and while not everyone gets along all the time, relations between the island people are about as good as you can find.
Crime is low, people friendly, and nobody has any reason to even consider terrorism.
The Ni-Vanuatu people are happy to have real estate investors come to Vanuatu because the custom owners are the only ones who can own land. All foreigners must lease land from them and that, of course, means that they have an income – even if it is very modest.
Investors quickly realize that the land leasing arrangements actually work very well in Vanuatu. All leases must be registered in the central government Land Records Department. In the urban areas of Port Vila and Luganville, the government itself becomes the lessor on behalf of the custom owners. The government courts protect the interests of both the land owners and the lessee as efficiently as any land dispute court in the Western world and often better.
Leases are generally 50 years for residential property and 75 years for commercial property and the property lease can be renewed if, for example, the property is subdivided or the term is due to expire.
Waterfront property is always a limited commodity, especially in the best locations and it has been slowly dwindling as new homes, resorts, hotels, and businesses are built.

An excellent land ownership system

Until they understand how the system works, investors are sometimes concerned with the idea of leasing land as opposed to the Western concept of land ownership.

In fact, Western concepts of land ownership are hardly accurate. In most countries governments actually lease the land to individuals and companies but they call the lease payments “property taxes.” If the “owner” fails to pay whatever taxes are assessed on the property, the government can and does confiscate the land.

By contrast, in Vanuatu, the government can’t take the land from the indigenous people under any circumstances. But the government can and does act as an efficient and fair mediator between custom land owners and foreign investors.

The mere fact that real estate prices have been rising rapidly in Vanuatu proves their system works and works well.

You do not have to be a resident of Vanuatu or have employment in Vanuatu to purchase commercial or residential property and generate income from this property. You will not pay income taxes in Vanuatu on any income that your investment earns although the company will have to participate in the sales tax process and pay other government fees such as businesses licenses etc.
The Process of buying land in Vanuatu:

Find a suitable property and agree on a sale price.
Sign an “Agreement for Sale and Purchase” form.
Pay the deposit to the Real Estate Agent.
The Agent will apply for the Consent to Transfer.
When consent to transfer approved, sign the Transfer of Lease with the seller.
Settle the transaction.
Pay a Stamp Duty of 2% to the Government.
Register the transfer at the Lands Records Department and pay 5% registration fee.
Pay Solicitor’s fees (Negotiable, usually 1%). This step can be avoided, if desired, by allowing TransPacific Real Estate to complete the transaction.

Tax advantages

Vanuatu has an attractive investment environment that is highly competitive in the Pacific region. It has an almost absolute industrial calm and a peaceful environment with a high standard of living where investors from all over the world can live and do business for profits and pleasure.

Vanuatu has developed an excellent investment reputation as an all round investment location in the Pacific region. In particular it has:

Good infrastructure links around the country and the rest of the world.
Easy access to financial services.
Professional support from the Vanuatu Investment Promotion Authority which makes business relatively an easy thing to do.
Investor friendly tax structure.
Company Incorporation and subsequent annual fees are among the lowest in the Pacific.
No personal income tax.
No company income tax.
No capital gains tax.
No estate or death duties.
No tax on interest earned in bank accounts.
No tax treaties with other countries.
No currency exchange controls.
Property transactions may be contracted in any currency.
There are several established international banks, solicitors firms and insurance companies.
The right to repatriate investment is guaranteed by law.

Investing in Vanuatu may also qualify people for residency status. This can be one of the more exciting components of this investment. An accountant will be able to advise you on the details and benefits of residency.

Vanuatu is a full member of the Commonwealth, the French League of Nations, the United Nations, the World Bank and the Development Bank.

You can purchase the lease as a Vanuatu International Company or as a Trust to maximize tax benefits to yourself if necessary.

You can do the transaction in any currency agreeable to both parties.

If you decide to rent the property to generate income, you will be required to collect 12.5% sales tax from your tenant and pay this to the government.

The real reason people invest in Vanuatu

There is a reasonable opportunity to make money by investing in Vanuatu, but most people who invest in waterfront property in Vanuatu are seeking the relaxed, friendly, natural atmosphere of this tropical South Pacific country.

Successful investors are often international business people who wish to establish a foreign residency for tax purposes, sport fishers, SCUBA divers, or cruising yachties who come for a holiday fall in love with the place and decide to settle down.

People who come to live in Vanuatu are seeking the lifestyle, the culture, the adventure, the fishing and diving and walks in wilderness. They want a place to live where nobody hassels them and the living is easy.

About Vanuatu

Vanuatu is an archipelago, unique in its natural, scenic and historical heritage. A Y-shaped string of 83 islands covered with green tropical forests and fertile soils, whilst on the shores, sandy beaches are washed by the clean waters of the Pacific Ocean. These are the natural beauties with which Vanuatu is blessed.

The Ni-Vanuatu people are a Melanesian race speaking Bislama, a unique language mixed with Vanuatu versions of local, French and English languages. Bislama unites the country providing people of 110 different language groups the opportunity to communicate. English and French are widely spoken and are integral part of, not only the history of Vanuatu, but also the present.

Whilst the predominant population is Ni-Vanuatu, the country is peppered with the spices of many races including French, English, Chinese, South Pacific Islanders, Australians, New Zealanders, Vietnamese.

Vanuatu is a land of diversity and huge smiles, boasting Coral seas, tropical islands, fish, volcanoes and rainforest.

Snorkeling, scuba diving, game fishing and adventures are all here to enjoy in a country with a colourful history, a rich culture and a warm welcome. Every island has its owns history and unique traditions.

Tropical climate with a cooler season between May and October during which you can enjoy some lovely sunny days, and a wet season, hot and humid, from November to April, also known as the Cyclone Season.

Anyway, follow the cyclone alerts as they are regularly updated by the local governments. Also, you can check the cyclones routes and strength at : http://www.meteo.nc/ , http://www.met.gov.fj/ .

An additional comment, be prepared to enjoy the sea year-round, the water is always warm.

There has only been two cyclones that have wrecked Port Vila, One in Oct 1959, and Uma, in 1987. Earthquakes can read very high on the Richter scales, yet generally do zero damage. They are very deep down in the ocean. There is nothing to worry about.

There are a number of live volcanoes, absolutely awesome, a must see.

Marine life is abundant with some of the most exotic species you’ll ever see. And you’ll never go short of mouth watering tropical fruit.

Culturally, there are arts and crafts, carvings, sand-drawings, paintings, tattooing, pottery, weaving, jewellery and traditional clothing to see and enjoy.

And of course there KAVA, the traditional drink. The Kava found in Vanuatu is some of the strongest in the South Pacific.