Vanuatu Citizenship by Investment Programme after losing Schengen visa exemption: declining but not collapsing

Current CBI Revenue Situation

After a delay of almost a year, Vanuatu’s Ministry of Finance has released government revenue data for 2023 and the first two months of 2024. The figures show that Vanuatu’s suspension from the visa waiver program with the EU has caused a sharp decline in revenue from the Citizenship by Investment (CBI) program. Although Vanuatu does not publish specific data for its CBI programs, the government’s monthly revenue reports show income from the country’s three CBI programs. The report found that revenue from Vanuatu’s CBI programs fell to $68 million in 2023, down slightly from $71 million in 2022. Preliminary figures for 2024, including the first two months of the year, show revenue of only $7.2 million, predicting full-year revenue of about $43 million.

Causes of decline

The main reason for this decline is the European Council’s suspension of visa waivers for Vanuatu passport holders to enter the Schengen area. In March 2022, the Council implemented a partial suspension due to concerns about inadequate screening procedures and security risks related to Vanuatu passports. This decline continues to affect the appeal of the Vanuatu CBI program to potential applicants.

Current and Future Status

However, despite losing access to the Schengen area, Vanuatu’s CBI program has remained relatively stable. Revenue from the CBI has fallen by about two-thirds as a percentage of total government revenue, but has remained fairly stable in absolute numbers.

Vanuatu’s investment program remains open to Russians, while Caribbean programs have stopped accepting this group. Vanuatu allows Russians to apply for citizenship by investment, despite strict financial checks. This helps maintain interest from investors. Vanuatu is still attractive thanks to its advantages as a country that is almost tax-free, peaceful, safe and has a healthy living environment.

Competitive Strengths of the Vanuatu CBI Program

Despite the impacts of the suspension of visa waivers, Vanuatu’s CBI programs have shown resilience in terms of overall revenue. Although the $67.73 million figure in 2023 is down from 2022, it is still significantly higher than pre-2018 levels, indicating that interest in the program is still strong.

In the future, Vanuatu’s programs will have a competitive advantage in the market due to the minimum investment requirement of $130,000, which is significantly lower than the minimum of $200,000 for Caribbean programs and $400,000 for Turkey.

In addition, Vanuatu’s program offers a fast processing process that is different from Caribbean programs that are experiencing backlogs that affect processing times. A recent survey found that Vanuatu currently offers the fastest turnaround time among CIP programs: Agents report an average turnaround time over the past 12 months of just 3.3 months, which is 2-3 times faster than their Caribbean counterparts.