Executive Summary
The review of the Vanuatu Citizenship by Investment (CBI) program was carried out at the request of the Citizenship Commission and took place between November 2019-January 2020. The purpose of the review was to contribute to:
- assessing and ensuring alignment between the CBI program and the Vanuatu People’s plan;
- creating an effective and efficient CBI system, that is acceptable to the people of Vanuatu and attractive to foreign investors;
- identifying alternative short- and long- terms option for the CBI program.
CBI programs “help create significant sovereign and societal value through transferring assets from wealthy individuals to developing countries”, supporting fiscal independence and address growing imbalances and inequalities inherent to traditional sovereign debt financing. Vanuatu is one of at least 13 countries globally offering CBI programs and one of more than 60 countries offering Immigration Investment Programs (IIP).
Vanuatu’s current CBI program is offered through its Vanuatu Development Support Program (DSP) and its Vanuatu Contribution program (VCP), both started in 2017. They are administered by the Citizenship Office, with support from related government offices. To date, 5,253 passports were issued through the two programs and the total revenue collected was 26,795,585,717 vatu. This revenue has provided significant support for Vanuatu development, including repayment of debt and support for key programs in education, infrastructure, agriculture and tourism.
The two major challenges for the program are meeting the external international pressures around security and due diligence, and addressing the internal political pressures around acceptability.
Based on the review of the CBI program, the following major recommendations are offered:
- To demonstrate and further strengthen transparency and accountability, provide a thorough public narrative of the program, explaining its purpose, functioning, revenue, and spending;
- Address the major reputational, legal, and administrative issues in the current CBI program as soon as possible, keeping in mind the urgency of many of the issues;
- Plan for a public dialogue around three policy options:
- Eliminate the CBI program and develop alternative sources of revenue through taxation;
- Improve the existing CBI program to meet international requirements and domestically, clearly demonstrate its purpose and contributions;
- Develop an alternative model to pro-actively manage immigration and attract potentially valuable contributors of capital, resources and skills to Vanuatu, using a nationality-based model and a clear, Vanuatu-centered path to citizenship, based on relationship development, community engagement and contributions to the country.
The introduction to the report reviews CBI, globally and in Vanuatu, and discusses the purpose methodology, and limitations of the review.
The next section provides an overview of the program’s transparency, accountability and alignment with the VNSDP, along with a summary of the reputation, legal, and administrative issues identified.
Each of these is discussed in detail in the subsequent 4 sections, along with specific recommendations on how to address each of the issues.
The last section – section 7- outlines the 3 policy options identified by the review.
