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Are you looking for ways to reduce your tax rate as a high-net-worth individual? According to reports, the top 1% of earners in the USA paid 25.9% in taxes. This means while staying in the USA, one might pay over eight times more than the bottom 50% of earners. Such a high tax burden can significantly impact your overall wealth and financial planning. Therefore, finding legal ways to reduce taxes is essential for optimising financial health and preserving wealth for future generations.
Typically, Vanuatu stands out as an ideal location for high-net-worth individuals to conduct business and enjoy a luxurious lifestyle. When you get Vanuatu Citizenship by Investment, you can quickly gain access to a more favourable tax regime. This program offers a unique opportunity to legally reduce your taxes and enjoy other benefits of Vanuatu citizenship.
In this article, we will explore how to pay less taxes through the Vanuatu Citizenship by Investment program.
First, we will delve into the details of this citizenship program to understand its advantages and how it works.
Vanuatu’s Citizenship by Investment program is designed to attract investors by offering them a fast track to citizenship in exchange for their investments in the country's economy. This program aims to facilitate investments while providing investors with a favourable economic environment. With Vanuatu's Citizenship by Investment program, investors can obtain citizenship in as little as 3 months.
The main investment option is to make a non-refundable donation to the Vanuatu Development Support Program (DSP). This investment option has the following fee structure:
| Number of Applicants | Investment Cost |
| Single Applicant | $130,000 |
| Married Couple | $150,000 |
| Family of Four | $180,000 |
| For Each Additional Family Member | $25,000 |
Now that you understand the details of this citizenship, you might wonder how you can use it to lower your taxes. Broadly speaking, this citizenship gives you access to Vanuatu's tax regime, which has few taxes. As you will have less taxes to pay in this country, your overall taxes will be lower. In fact, fully moving your businesses and other financial assets to this country minimises your taxes.
Let us dive deeper into how this citizenship can reduce your taxes.
Vanuatu is renowned for its favourable tax regime. One of the most significant benefits for Vanuatu citizens is the absence of a wealth tax. More specifically, As a citizen, you will not need to pay a tax on your accumulated assets. In contrast, countries like Norway impose a wealth tax. Reports indicate that this 1.1% tax could cost a millionaire tens of thousands of dollars each year. After this tax increase, there was a significant rise in the migration of Norway's wealthiest citizens out of the country.
This citizenship helps you lower your taxes by eliminating inheritance tax. As you take on this citizenship, you can apply with your family members and ensure this tax does not affect them. If you have children with only this citizenship, they will be subject to no inheritance tax.
In particular, you can include the following family members:
To pay the least amount of taxes, you should consider acquiring this citizenship because, in this country, you do not need to pay capital gains tax. More simply, it means that when you sell a capital asset such as a bond or property, you will not need to pay a tax on the profit you make from the transaction. Hence, you will make a greater profit than if you sold your capital asset in a country that taxes such sales.
You will also have no capital export tax after acquiring Vanuatu citizenship. Since this country has no tax on your personal exports, you can transport your assets out of the country without paying a tax. Therefore, though you may have to pay a tax in the country where you plan to transport your assets, you will have reduced your overall taxes.
There is no personal income tax in Vanuatu. By comparison, other countries like the USA have an income tax. According to reports, the highest US personal income tax bracket is 37%. Let us take an example to elaborate on it – if you had earned 2.5 million a year, your taxes could total $925,000. On the other hand, if you had only Vanuatu citizenship and worked within the country, the government would subject you to $0 taxes. Nevertheless, you will need to pay out 6% into a pension fund that you can get back when you retire.
Vanuatu has no corporate tax rate. Specifically, your businesses will not need to pay a tax based on any rate. Instead, they can pay a flat tax for the first 20 years. To see how this could lower your taxes, consider this example: If your business had $20 million subject to tax in the USA, you would need to pay 21% of this amount, or $4.2 million. In Vanuatu, you would only pay a minimum of $300.
With this citizenship, you will not have to pay offshore corporate tax. While you may have to pay taxes in the offshore country, you will not be required to pay another tax inside Vanuatu. In fact, double taxation rarely occurs in this country. This is mainly because this citizenship allows you to optimize many taxes.
You can forget about property ownership tax with this citizenship. When you own a property in this country, the government will not subject you to a yearly tax on its value. Nevertheless, you should consider that as you sell, rent, or otherwise exchange properties, you will need to pay the following fees:
| Fee | Rate |
| Stamp Duty | 5% |
| Registration | 2% |
| Rental Income | 12.5% |
| Value Added on Purchase of Commercial Real Estate | 12.5% |
When you have a Vanuatu passport, the government does not tax your donations. This allows you to give away depreciating assets without paying taxes on the transaction. By using this tax system alongside another, such as the US tax laws, you can reduce your overall taxes by deducting donations from your taxable income.
Last but not least, obtaining Vanuatu citizenship can also help you reduce taxes due to the country's low value-added tax (VAT) rate. In Vanuatu, the VAT is 12.5%. In contrast, European countries have much higher VAT rates. For example, Greece has a VAT of 24%, Portugal 23%, and Italy 22%. So, access to Vanuatu’s economy can thus offer significant tax savings.
This citizenship offers much more than strategies to pay less tax. With it, you will gain the following benefits:
For you to access this citizenship, you will first need to fulfill the following requirements:
You may also need additional documents to prove your relationship with your family if they will join your application.
Vancis Capital is a boutique advisory firm that helps high-net-worth individuals gain Vanuatu citizenship. We have been a government-authorized agent for the Vanuatu DSP since 2017. Our team focuses on strategic solutions for citizenship and residency, ensuring your application is thorough and complete. Because of our global presence and respect for cultural diversity, we understand your unique needs. Additionally, we offer personalised assistance to help you choose the right investment options for your situation. By working with Vancis Capital, you can significantly reduce taxes and improve global mobility. We provide comprehensive support from start to finish, giving you the necessary information and guidance. This support empowers you to make decisions that align with your financial goals and personal values.
Now you know how to pay less taxes with the tax benefits of Vanuatu Citizenship by Investment as discussed above - no wealth tax, inheritance tax, capital gains tax, or personal income tax. This advantageous tax regime can significantly reduce your overall tax burden, allowing you to more effectively preserve and grow your wealth. Additionally, this investment program provides other benefits, such as increased travel freedom, access to business opportunities, and no residency requirements.
For those seeking to navigate this process smoothly, partnering with an experienced advisory firm such as Vancis Capital is crucial. As a result, you will ensure a successful and beneficial journey towards obtaining Vanuatu citizenship and enjoying its numerous tax advantages.
Get in touch to discuss how we can help you with your citizenship or residency by investment goals. One of our investment migration experts will contact you to discuss your case. With over 16 years of combined experience our team has helped hundreds of families achieve freedom.
