Vanuatu Corporate Services

Choosing the Right Company Type

Limited Liability Company (LLC)

A Vanuatu Limited Liability Company, also referred to as a “resident” or “local” company is the most common type of company in Vanuatu and can be used for a variety of purposes, ranging from single asset holding companies to active trading companies. As Vanuatu does not impose income-tax, there is no requirement to file accounts with the ‘Companies regulator’, but a company must keep accurate and up-to-date accounting records. Companies can be formed either as Public or Private Companies in standard form or as a Company Limited by Guarantee ‘CLG’.

• Quick and Easy Setup: Upon submission of a formal application, company incorporation can be achieved within days. Alternatively, purchasing an existing (fresh or shelf) company reduces processing time to hours.

International Company (IC)

A Vanuatu International Company, often referred to as an International Business Company (IBC), offers opportunities for individuals and companies looking to incorporate in a tax-free jurisdiction, as either a holding or trading corporate entity. However, Vanuatu IC’s cannot do business in Vanuatu except to further their business elsewhere, thus financial reporting obligations are relatively minimal, with no reqiurement for directors or shareholders to be resident(s) of Vanuatu. Similar to an LLC, an IC can be formed either as Public or Private Company or as a Company Limited by Guarantee ‘CLG’, and is quick and easy to set up.

Incorporated Cell Company (ICC)

A Vanuatu Incorporated Cell Company (the core-company) is a single legal entity, and thus a separate legal entity. An ICC has the ability to create its own incorporated cells as part of its corporate structure for the purpose of segregating and protecting the assets of each of the cells. The failure of one cell shall not affect another.  Importantly, the cell is not a subsidiary of the core-company. Each incorporated cell will have its own board of directors and ‘Constitution’ (formerly memorandum and articles of association). The identity of the core-company’s board of directors must be the same as that of each cell.

• Cells may enter into legal contractual obligations with one another (such as providing guarantees and loans or acting as feeder funds based on different currencies).

Protected Cell Company (PCC)

A Vanuatu Protected Cell Company is a company that is a single legal entity with separate and distinct cells. The PCC itself (the core-company) is a single legal entity but the cells of the PCC, as distinct from an ICC, do not have separate legal personality. It is therefore the core-company that will contract on behalf of a protected cell. Each cell can, if required, issue its own shares and pay dividends in relation to the assets and liabilities it holds which are segregated (by law) from those in the other cells thereby avoiding contagion. A PCC has a single registered office and the same board of directors for the cells.

• An ICC adopts a fundamentally different approach to cells of a PCC. The ICC incorporates each cell as a separate legal entity without the cell company needing to have any shareholder relationship with the relevant cell. The principal difference is, therefore, that each incorporated cell is a separate company as a matter of law whereas each protected cell is not a body corporate and has no separate legal identity.

Common to both Cell-Structures:

There are a number of common advantages of using a cell-company structures. The cell structure of both ICCs and PCCs offers an alternative to the traditional group holding arrangement providing economies of scale by reason of a common infrastructure and so offering costs savings in corporate governance and company administration.

Each cell structure may have its own shares the proceeds of which form part of the “cellular assets” exclusively attributable to that cell. As such, the creditors of one cell-company cannot have recourse to the assets of other cell-companies, nor to the core company. As such, the assets and liabilities of the cells are segregated from the assets and liabilities of each other cell in the group structure.

Furthermore, the assets of a particular cell, but not of the core, can be transferred to another entity or person wherever resident or incorporated. In order to preserve the integrity of the cell structure, as a general rule the creditors of a cell have recourse to that cell only and not to the assets of other cells or to the core. Similarly, creditors of the core only have recourse to the core and not to the cellular assets. Cell-companies, being separate legal entities are treated separately for taxation purposes.

Company Limited by Guarantee (CLG)

A Vanuatu Company Limited by Guarantee is established through its Constitution, adopting either a Limited Liability Company or an International Company structure. Unlike traditional companies, a CLG does not have shareholders; instead, it operates with members. Legally, the company remains ownerless. Directors, elected by members, manage the company in accordance with its Constitution and membership precepts. A CLG cannot distribute dividends. However, every CLG must have an Appointor and Guardian who toggether hold sole authority over asset disbursement upon company dissolution. Additionally, CLGs are not required to maintain public records of members, making them an effective asset protection vehicle.

Vanuatu Corporate Services