Business in Vanuatu

Vanuatu has both formal and informal business activity. The 2025 Labour Force Survey reported 58.5% informal employment and 60.3% of the working-age population in subsistence activities. The 2022 Business Establishment Census recorded formal and informal businesses across the country. Informal activity is especially common among rural and island-based microbusinesses, market and open-air sellers, subsistence-linked activities, women, young people, and businesses in agriculture, tourism, fishing, handicrafts, retail and services. Informal operation can reduce access to contracts, procurement, support and expansion, but it does not create a general exemption from licensing or tax obligations for profitable activity. A sole trader or partnership is not a separate legal person, so the owner or partners remain personally responsible for unpaid business debts. A company is a separate legal person and generally provides continuity, limited liability and the ability to transfer shares. Vanuatu also recognizes private companies, public companies, community companies and overseas companies registered in Vanuatu. One person can form a company with one shareholder, at least one share and one director, but at least one director must be a natural person. A company needs company rules, a physical registered office in Vanuatu, a postal address and the required shareholder and director details. The usual formal pathway starts with a business name or company registration through VFSC. A business name is generally required when trading under a name other than the natural person's own surname, the partners' surnames or the company's full legal name. A business-name reservation lasts six months and can be made up to twice within five years. The current VFSC fee table lists VT 12,000 for business-name registration, VT 5,000 for renewal and VT 5,000 for reservation. A renewed business name is due in its anniversary month. An expired name requires a new application and can result in a penalty of up to VT 100,000. The current fee table should be checked before filing because an older VFSC guide lists different online and paper fees. Company applications can be submitted through the VFSC online service, kiosk or paper process. They normally include the proposed name, company type, rules or model rules, director consent and details, shareholder and share information, and registered-office and postal addresses. A physical registered office cannot be only a PO Box or Private Bag. The current fee table lists VT 35,000 for company registration and VT 35,000 for an annual return. Registration and annual-return fees for an overseas company are each listed at VT 60,000. The free VFSC Registry or Entity Search can show statuses such as registered, removed, amalgamated, receivership or liquidation. The DCIR issues the tax identification number (TIN) used for business licensing, VAT, Rent Tax and other tax or licensing purposes. The TIN replaced the former CT number. Changes and departure from the business must be reported, and using another person's TIN is prohibited and can be subject to penalties. Every natural or legal person carrying on a profit-making activity generally needs a business licence. DCIR handles licences in Port Vila, Luganville and Lenakel, while provincial governments handle areas outside municipal boundaries. A new licence runs from the business start date until 31 December and is charged according to the remaining months. Annual renewal covers 1 January to 31 December and should be completed by 31 January. Late renewal adds a growing 10% fee for each month of delay. A change of activity, location or ownership can require a variation or a new licence. Relocation or a name change has a listed variation fee of VT 1,500. Business-licence fees depend on the activity category and turnover. For many categories, published schedule amounts range from VT 10,000 for turnover below VT 4 million to VT 1,000,000 for turnover of at least VT 200 million. Some activities use different rules, including F1 at 7% of turnover with a minimum of VT 5.5 million and F2 at 5% of quarterly turnover with a minimum of VT 330,000. The exact activity category and current schedule must be checked before applying. Narrow exemptions exist for activities such as certain nonprofit teachers and professors, religious missions, non-proprietary clubs, exporters of Vanuatu products, credit unions and registered charitable microfinance providers. VAT applies at 15% to most taxable supplies in Vanuatu and to many imports. Registration is mandatory when taxable supplies exceed or are expected to exceed VT 4 million in a 12-month period, while businesses below that level may register voluntarily. A registered business charges and collects VAT, files returns and pays the amount due after permitted input-tax credits. Returns and payments are generally due by the 27th day of the following month; the December return and payment are due on 5 January. Exports, services to non-residents supplied outside Vanuatu and services physically supplied outside Vanuatu can be zero-rated. Financial services, approved education and residential rental accommodation are among the exempt categories. VAT records must normally be kept in English, French or Bislama for at least five years. Regulation Order No. 153 of 2025 also requires VAT-registered individuals and entities to register with the Vanuatu Sales Monitoring System (VSMS); the current status and deadline should be confirmed with DCIR. Vanuatu does not generally impose personal or corporate income tax, withholding tax or capital-gains tax according to VFIPA information. That does not remove VAT, import duties, Rent Tax, stamp duty, business-licence fees or other compliance duties. Rent Tax can apply to rental businesses at 12.5% of gross rental income for each six-month period. A natural person receives a first VT 200,000 exemption, while an entity does not receive that deduction. Payment dates are 28 June for the period from 1 December to 31 May and 28 December for the period from 1 June to 30 November. A foreign-owned business needs a Foreign Investment Approval Certificate (FIAC) from the Vanuatu Foreign Investment Promotion Agency (VFIPA) before applying for a business licence. A new FIAC application is listed at VT 120,000, a variation at VT 30,000 and the annual survey service at VT 15,000, with a target processing time of 15 working days. Applications can require a statutory declaration, reserved business name, passport identification, police clearance for investors intending to reside in Vanuatu, a business plan and, where relevant, land, purchase, sale, partnership or environmental documents. Foreign ownership, activity, location or additional activities can require a variation. The annual survey may require the last 12 months of VAT returns, the business licence, VNPF employer information and active-employee details, and the VFSC certificate. Foreign investors must check whether the proposed activity is reserved, restricted or prohibited before preparing the application. Published lists and the 2025 VFIPA review identify 15 reserved and 26 restricted activities, with examples including kava bars, open-air or mobile shops, taxi and bus services, private security, electrical work, inshore commercial fishing and some handicraft, construction, sandalwood, kava and forestry activities. VFIPA communications have indicated that construction may have been removed from a reserved list, so the current classification must be confirmed directly with VFIPA. Sector-specific approvals may also apply to activities such as mining, quarrying, logging, meat processing, canning, oil milling, brewing, air transport, finance, insurance, legal services, health, tobacco imports, tourism, food and transport. The eBusiness Link can provide a digital access point for central startup registrations. A typical local procedure is estimated in the Trade Portal at about 13 to 26 days, while a foreign-investment procedure is estimated at about 23 to 41 days, but the older cost estimates are not current guarantees. Visa, work-permit and employer-registration matters remain separate. Vanuatu National Provident Fund (VNPF) employer registration becomes relevant when the business has staff. Municipal or provincial by-laws, land access, environmental approvals, resource quotas and customs requirements can also affect the start of operations. A company must file its annual return in its assigned filing month. The first calendar year after incorporation does not require an annual return, but a delay of more than six months can lead to removal from the register. During removal, assets can transfer to the Crown, and restoration requires outstanding fees, late fees and a listed restoration fee of VT 60,000. Companies should maintain accounting records, shareholder information and a share register with a seven-year history. Issuing or transferring shares, changing directors, shareholders, addresses, names or company rules requires the relevant VFSC process. Selling a business is not the same as closing it: the seller normally surrenders the existing licence and the new owner applies for a new one, with VFIPA approval required for a foreign buyer. Closure usually involves the DCIR business-licence closure or refund process, VAT cancellation and final returns, settlement of outstanding tax and fees, and VFSC action for a business-name expiry or cancellation or a company's removal. Removal from the register does not automatically clear debts or creditor claims. Insolvent businesses may require liquidation, receivership or court procedures under the Companies (Insolvency and Receivership) Act No. 3 of 2013. Business records generally remain subject to retention requirements after cessation. Rural logistics, disaster exposure, weak connectivity, small markets and the cost of imported inputs can materially affect business planning. VCCI and Business Link Pacific offer services such as business health checks, accounting and planning referrals, marketing, e-commerce, information technology, standards, certification and export connections; access to subsidies or other programmes depends on the programme, target group and available budget.