The Parliament of Vanuatu has recently approved legislation modifying its citizenship by investment program through real estate.
The law amends the Vanuatu’s Citizenship act, which was originally passed through a majority vote of 27 to 17.
It introduces the new REO Program (Real Estate Options).
An option owner (or optionee) is given an irrevocable and absolute right to buy property from option seller (or optioner) within the timeframe that the option was in effect.
Also, the investor is given purchase rights at a fixed price tag specified in the option contract.
This is extremely advantageous to real estate investors with an eye for good property deals.
It allows them to capitalize on Vanuatu’s property market, which in turn pools more funds into the island’s economy.
Is REO Really a New Program?
Originally, this program’s prototype existed in 2014. However, it was repealed by Vanuatu’s parliament in 2015.
Thus far, the amendment is an attempt at restarting the program, putting Vanuatu on the investment map.
Is the Program Worth Investing In?
According to Vanuatu’s Prime Minister, the program is competitive, introducing the measure of VGAP (Vanuatu Government Approved Projects).
VGAP acts as a guiding institution, helping investors find safe and reliable projects for their citizenship program.
Additionally, VGAP aims to compete with the attractive CBI programs of the world.
The program is trying to taking advantage of Vanuatu’s status as an island removed from major political problems.
This may serve to attract larger investors, especially those seeking vacation homes and retirement spots.
In fact, the Vanuatu’s government is using those as marketing points for its program. It aims to use its beautiful natural environment and scenic beaches to get committed citizens into its territory.
Vanuatu – Using the Program to Build its Infrastructure
One of the program’s goals is to expand Vanuatu’s public welfare.
The program aims to upgrade Vanuatu’s education and critical health infrastructures.
It also aims to bring an employment increase (specifically through the tourism industry), plus economic growth.
As a result, Vanuatu’s CBI program expects a large degree of dedication from investors. It expects them to commit and help in the expansion of the island’s public welfare.
Vanuatu’s CBI policy places certain restraints on what investors can buy/sell.
Investors can only purchase constructed condominiums, apartments, and houses. They aren’t allowed to sell vacant land (though they can still purchase it).
Are There Obstacles to Implementing the Program?
For starters, the legislation forces an application processing time of 60 to 90 days.
This isn’t long by most standards, but considering the island’s size, this may put off some applicants.
Also, many crucial details have yet to be defined. They include:
- Minimum investment amounts per project
- Criteria for project eligibility
So while approved, the REO program is yet to take full effect.
Beyond those details, many agents working to develop the program hope that the government follows strict methods of selecting applicants.
After all, the last thing Vanuatu needs is a program that attracts investors with little experience (or worse) criminal financial records.
Implemented correctly, the program should be a boon to its citizens, and an improvement for their economy!