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Vanuatu all out to woo Chinese property investors after strengthening ties with China

For many, investing in a waterfront villa in the stunning South Pacific may sound like a pipe dream, but in reality, it is more feasible than you think. Especially so in Vanuatu.

Vanuatu is a collection of 83 islands that blends boutique resorts, pristine beaches and genuine tribal communities with spectacular geography, including volcanoes and tropical underwater environments. Its capital is Port Villa and the local economy is driven by agriculture, fisheries and the tourism industry, which is experiencing rapid growth.

Let’s examine why Vanuatu may soon become a property hotspot for Chinese buyers.

Chinese tourists are discovering Vanuatu

Although Fiji springs more to mind as a popular choice for holidaymakers headed to the South Pacific, Vanuatu actually offers many similar sights and experiences. Plus, it is 10 times less crowded. The island archipelago has a lot to offer holidaymakers, including world-famous beaches, accessible volcanos and tasty cuisine. Author James A. Michener wrote his Pulitzer Prize-winning book, Tales of the South Pacific, while based in Vanuatu.

For adventure-seeking Chinese travellers, Vanuatu has become a destination to tick off on their bucket list. Visitor numbers to Vanuatu grew by nearly 30 per cent from 2015 to 2018, driven partially by rapid expansion from China and other Asian source  markets.¹ Although China only accounted for less than four per cent of visitors to Vanuatu in 2018, the numbers are growing. In 2013 there were less than 4,000 visitor arrivals from Asia and Chinese tourists only numbered 1,000. In 2018, Chinese arrivals have increased to 4,000. This uptick has given tourism chiefs much optimism and they believe China will overtake Australia as the largest source of tourists within the next 10 years. ²

If this forecast proves correct, Vanuatu real estate will benefit as Chinese travellers tend to invest in holiday destinations that appeal to them.

Economic cooperation

Vanuatu was the first Pacific nation to support China’s claims in the South China Sea and its ties to China have been increasing since. For several years now, China has been on a construction spree in Vanuatu, erecting government buildings, stadiums, convention centres, roads and extensions to its Port Vila’s runway to allow for larger planes.

In 2018, both counties agreed to a strategic partnership within the framework of China’s Belt and Road Initiative (BRI) whereby China will assist Vanuatu in areas such as trade, investment, fishery, tourism and infrastructure construction to help boost the island nation’s economic and social development.³

Chinese buyers tend to put down stakes in countries that work closely with Beijing. The political stability and favour for foreign investment could make Vanuatu one of the best countries to exploit business opportunities and settle.

Easy to invest

Vanuatu has made it easy for foreigners to buy a property. Buyers don’t need to be residents to invest. There are no restrictions on what type of property buyers may purchase and no limit to the number of properties they can buy. Property can be rented out long term without any business licences or permits, and there are no regulations to impede repatriating of funds from selling or renting a Vanuatu property.

Vanuatu also has no income tax, no corporate tax, no land tax and no death duties. The local banks in Vanuatu will provide finance to approved applicants from 70 per cent to 80 per cent on land and house packages depending on the client’s credit references. 

Properties to fit every budget

In Vanuatu, there is real estate to fit every purse string, from a few hundred thousand dollars for a three- and four-bedroom family house to multi-million dollars for a plush, luxurious waterfront residence with private access and a private beach. Furthermore, they cost a fraction of the price of beach properties in Australia or New Zealand.

One can easily find oceanfront house plots between one and two acres for USD70,000 to USD140,000 and modern apartments in Port Vila, with stunning views over the harbour for under USD30,000. ⁴

Golden Visa

Many countries have citizenship by investment schemes, but none is as easy as the one offered by Vanuatu. Applicants can become a Vanuatu citizen without even needing to set foot in the country and it only costs about USD130,000 cash payment for a single application and USD180,000 for a family of four plus fees. ⁵

For Chinese buyers, this is a big draw because the passport offers visa-free access to 129 countries including the EU. It also entitles them to live on a picturesque tropical island in the South Pacific and an opportunity to get away from the rat race back home.

Source: 1. CAPA: Air Vanuatu: new A220 fleet to support rapid inbound growth; 2. The Blue Swan Daily: Vanuatu and its flag carrier prepare for surge in Asian visitors; 3. Xinghua: China, Pacific island countries lift ties to comprehensive strategic partnership. 4: Pacific Island Living: Property Update Vanuatu; 5. AJC: Vanuatu Honorary Citizenship