The World’s Cheapest CBI Program at Risk of Cancellation
Following the EU Commission’s proposal to partially suspend the union’s visa waiver agreement with the country, the government of Vanuatu has taken measures to save its citizenship by investment program, by assigning a UK-based due diligence agency and a new marketing firm. On January 12, the EU Commission announced that Vanuatu’s CBI program posed a threat to the security of the EU since applicants were not being properly screened. After that, the Vanuatu government also announced that it was signing an agreement with the due diligence UK agency, FACT UK and reassured that more international due diligence firms would be appointed to make the country’s CBI program more robust.
The advisory and marketing firm CS Global Partners has announced it was partnering with the government of Vanuatu to restructure and rebrand the country’s CBI program. The Vanuatu government said the program would be completely reviewed “in line with internationally accepted standards,” according to an official statement. “The government shall retroactively run full due diligence checks on all CBI applicants granted citizenship in the last six years to ensure that only reputable applicants have been approved. If an economic citizen fails the due diligence check, their citizenship will likely be revoked,” it added.
According to media reports, Vanuatu will have about two months of breathing space to negotiate with the EU Commission before the partial suspension of the union’s visa waiver deal with the country is implemented following the Council of Europe’s approval of the measure.
Vanuatu has amended its citizenship by investment law to give wealthy foreign investors the option to invest in the republic’s real estate sector and receive Vanuatu passport in return.
Previously, the island nation offered just a donation route to passports to foreign investors who had met the due diligence requirements under the country’s citizenship by investment program. A single applicant would just have to pay $100,000 to gain a Vanuatu passport within a few months while families with up to four members were required to donate at least $130,000.
On April 26, 2021, The Real Estate Option Program came into effect when the Vanuatu parliament approved the amendment to the citizenship act by 27 votes. Foreign investors would now be able to also apply for the REO Program on top of the donation route with the latest amendment to the citizenship law.
Vanuatu Restores Real Estate Citizenship by Investment Program
The REO Program was launched once before in the country. It was running throughout 2014 as well but the parliament later repealed it in 2015.
Vanuatu Prime Minister Bob Loughman explained in his note, prefacing the text of the latest citizenship amendment act as published in the official gazette, that the program has been brought back to make the country’s CBI program even more attractive to wealthy foreign investors.
“Vanuatu exists within the global economy and, to attract the necessary major investments, it must compete with the rest of the world in offering incentives to major investors,” Loughman said.
The new policy will allow foreign investors to invest in only those real estate projects that the government has assigned for the REO Program.
With an estimated population of around 250,000 people, the government of Vanuatu wants to use this money from the program to develop the country’s infrastructure, improve the healthcare and education facilities, and give a boost to the country’s tourism sector.
Explaining what REO means, the prime minister said it “is an agreement that grants the party owning the option (“the optionee”), the exclusive, unrestricted, and irrevocable right to purchase property from the party selling the option (“the optionor”), during the specified period of time that the option is in effect.
“When an optionee buys a real estate option, he or she buys an exclusive, unrestricted, and irrevocable right and option to purchase a property at a fixed purchase price within a specified option period.”
The government of Vanuatu hopes that the REO program would create employment and business opportunities in several areas, including hotels, resorts, food supply, retail, tourism as well as improvement of roads, telephones, electricity, and water networks.
The amendment stipulates that any investor applying under the program must receive a result within three months of their application.
Selling the Purchased Property
In his note, the prime minister clarified that the foreign investor will not be allowed to sell land under this program.
“As the aim of the policy is to maximize economic growth with a focus on providing the necessary infrastructure to cater for the growth of the tourism industry, the major investor will only be allowed to sell constructed houses, apartments, and condominiums, and will be prohibited from selling vacant land,” Loughman said.
In addition, foreign investors would not have an unlimited freehold of their real estate investments. Although the text of the bill and the prime minister’s note does not give an exact timeframe on the lease, some media reports put it at 75 years.
For more detailed information on the requirements for obtaining Vanuatu Citizenship by Investment, please contact one of our advisers in the UAE, Denmark, or Canada, we will accompany you and your family until you obtain Vanuatu Citizenship.
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