Island nation at the center of global interest with easy ‘golden passport’

The Pacific island nation of Vanuatu has launched one of the world’s most popular ‘Citizenship by Investment’ (CBI) programs. It is commonly known as the ‘Golden Passport’. Under this program, wealthy foreigners get the opportunity to acquire Vanuatu citizenship in exchange for financial contributions. Vanuatu passport holders, known as a tax haven state, get visa-free or visa-on-arrival benefits in 113 countries.

According to the Global Residence Index, an investment-based immigration organization, Vanuatu’s citizenship program is one of the fastest and easiest processes in the world. Very limited documents are requested from applicants and the entire process can be completed digitally. Most importantly, applicants do not need to be physically present in Vanuatu at any stage. UNB News reports.

The cost of obtaining Vanuatu citizenship is approximately US$135,500 to US$155,500, which is approximately 1.18 million to 1.35 million taka in Bangladeshi currency. This opportunity is also available for a family of four. Applications are usually processed within 30 to 60 days. A BBC report in 2019 mentioned that passport sales provide about 30 percent of Vanuatu's total revenue. The popularity of this program is not only due to the speed and ease of the process, but also some other important benefits.

Vanuatu passport holders receive visa-free or visa-on-arrival benefits to 113 countries. Vanuatu is ranked 51st in the Henley Passport Index, which is ahead of Saudi Arabia, China and Indonesia. India is ranked 80th in comparison.

However, due to security concerns, the European Union suspended the visa-free benefits of Vanuatu passports in March 2022. This suspension was later implemented permanently in February 2023.

Vanuatu is known as a de facto tax haven. The country has no personal income tax, capital gains tax, inheritance tax, or wealth tax. Although there are some indirect taxes on VAT and property transactions, they are also lower than in other Pacific countries. The country has become strategically attractive for tax planning due to its lax financial reporting system.

According to the World Bank, Vanuatu's per capita GDP in 2023 was only $3,515.2. As a result, the offshore financial services sector has become an important source of income for the country.

Controversy and criticism: In recent years, Vanuatu's citizenship program has been the subject of controversy. Allegations of abuse and corruption by international crime groups are growing.

An investigation by The Guardian, which analysed more than 2,000 Golden Passports issued in 2020, found that recipients included a Syrian businessman under US sanctions, a suspected North Korean political figure, an Italian businessman accused of extorting money from the Vatican, a former member of an Australian motorcycle gang and two South African brothers linked to an alleged cryptocurrency fraud worth around $3.6 billion.

Experts say the programme could create money laundering and security risks and could also be used as a ‘backdoor’ into the European Union and the UK.