By Moustafa Daly
Vanuatu, an Oceanic country made up of a number of islands, just announced the expansion of its citizenship by investment (CBI) offerings to include an interest-yielding investment in the national Coconut Oil Future Fund (CNO Future Fund), advertised as the world’s “first sustainable CBI program.”
Under the new route, which aims to attract 120 applicants per year, investors will have streamlined access to acquire Vanuatu citizenship for an investment of $138,000, all costs included, the government announced. Investors will be entitled to annual accruals returns and partial principal repayment after five years.
The CNO Fund is part of the nation’s drive to achieve sustainable development goals. Its funds will be primarily invested in the renewable energy sector across different industries like agriculture, supply chain, and logistics.
“Having the privilege to introduce the CIIP – CNO Future Fund is a moment of immense pride for me,” said Daniel Agius, COO at Vanuatu Investment Marketing Bureau, the designated master agent for the new route. “I deeply believe in the potential of this initiative. It represents not just fiscal growth, but a transformational step towards inclusive societal betterment in Vanuatu.”
Legal professionals are skeptical about the new Vanuatu CBI route
The news comes months after the previous Vanuatu government announced introducing CBI bonds denominated in Australian dollars. But the bonds were never made available to investors, according to Laszlo Kiss, managing director at Discus Holdings.
“Vanuatu had announced an AUD bond investment option; nothing happened. They announced a property option; nothing happened,” says Kiss. “They were just announced; no official follow up or release of exact conditions, process, etc.”
Echoing similar reservations, Philippe May, CEO of EC Holdings, is doubtful about whether the CNO route would actually open up.
“I am not convinced of this new program and not even sure whether it will ever take off,” he says. “We have not seen anyone getting citizenship in Vanuatu with real estate or capital development routes in spite of pompous announcements,” he says. “As exciting as it looks, we have no choice but to adopt a conservative and pragmatic approach.”
May’s EC Holdings, which is licensed to operate in Vanuatu, is thus not promoting the CNO Future Fund option to its clients. “We are recommending that clients adopt a risk-based approach when selecting program or government agent for economic citizenship as some unproven path can lead to disappointment and high financial and personal cost,” he explains.
Political turmoil is hindering Vanuatu’s development
However, Vanuatu had been embroiled in an ongoing political impasse between the government and the opposition. These conditions create skepticism over the potential success of the new CBI route, Kiss says.
“Last month, Vanuatu had three prime ministers in one month,” the Vanuatu CBI agent explains. Also, he doesn’t expect the program to succeed until the government is stabilized.
Additionally, Vanuatu’s citizenship has lost popularity this year in one of its main attractions: visa-free access to sought-after destinations. The situation started in late 2022 when the European Union (EU) revoked visa-free access to Vanuatu citizens citing security concerns, with the UK following suit in July 2023.
No figures have been released on the CBI application volumes following these decisions. However, it’s expected they would have a substantial impact on their overall appeal.
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