Vanuatu’s Business Environment
October 14, 2016 3:08 pm | Posted in Opinions | Share now TwitterFacebook
How do we compare with our Pacific and Melanesian neighbours?
When foreign investors search for potential investment locations, they must know how conducive it is for their business investment to prosper in the chosen site. No doubt, Vanuatu’s archipelago is well known for its peaceful and rich cultural environment.
According to the 2016 World Bank’s ‘Ease of Doing Business’ Report’, Vanuatu is ranked 94 out of 189 economies. Within the Pacific region alone, our distance to the frontier score is 61.8, slightly above Samoa at (60.7) and Solomon Islands at (57.86).
However, when it comes to starting a business investment, Vanuatu ranks 147 out of 189 countries way below Samoa at (92.46), Solomon Islands at (85.11), and Kiribati at (76.46). These rankings provide useful information for foreign investors to identify how easy it is to start a business in Vanuatu.
World economies have recognize the need to simply their starting a business investment rules and procedures —in streamlining and establishing a one-stop shop facility, making the procedures simpler and faster through the introduction of technology and the reduction or elimination of minimum capital outlay requirements. Many have introduced business registration reforms in stages—often being part of a larger regulatory reform program. Among the benefits have been greater firm satisfaction and savings and more registered business investments, financial resources and job opportunities for these innovative countries.
Vanuatu made starting a business easier by reducing the time required for company registration at the Vanuatu Financial Services Commission and the issuance of provisional licenses by the Department of Customs. Furthermore, the Vanuatu Investment Promotion Agency (VIPA) had reduced its processing time from 30 working days to 15 days. VIPA is engaged with ongoing negotiations with its key stakeholders to establish a one-stop-shop facility to be housed with VIPA. VIPA had also eliminated its capital outlay requirement of needing to sight a minimum threshold of 5 Million Vatu before approving a foreign investment approval certificate (FIAC).
VIPA had also recognized the need to invest in a Management Information System that will assist in fast-tracking VIPA FIAC applications to further reduce the processing time of new VIPA FIACs from 15 to 3-5 working days to be compatible with the Solomon Islands and Fiji.