Vanuatu continues to reaffirm its commitment to implement the
internationally agreed tax standard set by the
OECD(1)Global Forum on Transparency and
Exchange of Information for Tax Purposes (Global
Forum). Last month Vanuatu entered into seven tax
information exchange agreements (TIEAs) with
Denmark, Finland, Iceland, Norway, Sweden, Greenland and the Faroes
Islands. The Vanuatu Government also recently amended the
International Companies Act [Cap 222] (Vanuatu) (Act) to require
that all bearer shares issued in an international company be
deposited with a custodian by 31 December 2012.
Tax Information Exchange Update
On 13 October 2010, Vanuatu entered into seven TIEAs taking the
tally of TIEAs to 10. Assuming that Vanuatu signs two more TIEAs,
it will shortly follow the Cook Islands and Samoa onto the Global
Forum's 'White' list of countries which have
substantially implemented the internationally agreed tax
The internationally agreed tax standard requires exchange of
information on request by a treaty partner in all tax matters for
the administration and enforcement of domestic tax law (without
regard to the domestic tax law and bank secrecy provisions of the
country receiving the request). Please see
The OECD International Tax Standards and the Current State of
Play for more information.
The Vanuatu Government is yet to enact enabling legislation
necessary to give effect to the TIEA provisions; however, we
understand it is currently considering the form that this
legislation will take. Vanuatu will be the first Pacific
jurisdiction to be examined by the Global Forum's peer review
group in the first half of 2011. This review will assess the
adequacy of a Vanuatu's legal and regulatory framework for the
exchange of information.
Bearer Shares to be Registered
The Vanuatu Government has also recently moved to improve the
transparency of the ownership of international companies. The
International Companies (Amendment) Act No. 11 of 2010
(Amendment Act), which commenced in August 2010,
requires that all bearer shares issued in an international company
be deposited with a custodian by 31 December 2012(2).
This follows similar moves in Samoa under the International
Companies Amendment Act 2008 where all bearer shares and
bearer debentures were effectively
PLN Article for further details).
The Act currently permits the issue of bearer shares to company
members(4). On the share certificate of a bearer share
the word "bearer" is inserted instead of the true owner,
effectively masking the ownership of the shares.
However, by depositing the bearer share with an
'authorised' or 'recognised' custodian, the person
delivering the relevant share or shares must provide the full name
of the beneficial owner of the bearer share and any other person
having some form of interest in the share(5). This
change will disrupt the use of bearer shares as a mechanism to hide
the true ownership of international companies in Vanuatu.
1. Organization for Economic Co-Operation and
2. Section 9 of the Amendment Act.
3. See section 6 and 8 of the International Companies
Amendment Act 2008 (Samoa).
4. Section 22 of the Act.
5. See the Guidelines – Custody of Bearer
Shares Order No 15 of 2007.
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