Vanuatu Bearer Shares and Beneficial Ownership Rules

Bearer Shares in Vanuatu: Where the Law Stands TodayCopy link to section

Bearer shares in Vanuatu were abolished in 2016, and no new bearer instruments may be issued by an International Company registered there. The reform aligned the jurisdiction with global transparency standards and is administered through the framework set out in the International Companies Act [Cap. 222], overseen by the Vanuatu Financial Services Commission (VFSC), whose consolidated statute is published on its own portal.

This change directly affects foreign owners who once relied on bearer instruments for ownership anonymity and anyone now weighing a Vanuatu structure on that basis. The article traces how the position developed, what survives for legacy certificates, and what the abolition means for privacy and beneficial ownership going forward.

It is most relevant to non-resident investors, company founders, and the advisers who structure cross-border holdings.

What Bearer Shares Are and Why They Mattered for Offshore OwnersCopy link to section

A bearer share is an equity instrument whose owner is whoever physically holds the certificate. No name appears in any company register, and title passes simply by handing the paper to another person.

For offshore owners, that mechanic once delivered near-total anonymity: no KYC at the point of transfer, no register entry, and no traceable chain of ownership. The Financial Action Task Force (FATF) flagged this same feature as a way to hide the true owners of legal persons, marking bearer shares as a recognised financial crime risk.

Vanuatu built an accessible offshore regime around the International Companies Act, enacted in 1993, which governs International Companies (ICs) formed for cross-border commercial activity. Bearer instruments carried real commercial weight in that system because an IC is exempt from local tax and faces no mandatory filing or audit duties unless it trades inside the country.

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The Legal History of Bearer Shares Under Vanuatu Company LawCopy link to section

Under the original 1993 Act, shares could be issued in registered or bearer form, and a company could convert freely between the two. Two parallel tracks of company law operated side by side: the domestic Companies Act [Cap. 191] and the offshore International Companies Act [Cap. 222].

Before 2015, the offshore regime added an immobilisation requirement for bearer shares. That measure had clear weaknesses: it carried no supervisory mechanism to confirm compliance, it did not reach bearer share warrants, and the regulator held no figures on how many bearer shares or warrants Vanuatu companies had issued.

The Asia/Pacific Group on Money Laundering (APG) examined the jurisdiction in a Mutual Evaluation published in 2015, which identified significant shortcomings in transparency and enforcement. Bearer shares were expressly abolished the following year, in 2016.

Domestic companies, meanwhile, fall under the Companies Act No. 28 of 2012, which governs formation, management, and dissolution for entities operating locally.

Current Statutory Position: The International Companies Act and the Companies ActCopy link to section

The governing offshore statute remains the International Companies Act [Cap. 222], administered by the VFSC, with the domestic sphere covered by the Companies Act No. 28 of 2012. Bearer shares are no longer permitted under the corporate framework.

You may encounter secondary commercial sources stating that bearer shares are "still available" under the Act. That claim conflicts with the 2016 abolition confirmed elsewhere and should be checked against the current consolidated text rather than relied upon.

An International Company may carry on international business but cannot own real estate locally beyond leasing an office, and it may not hold banking, trust, or insurance licences without separate authorisation.

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Abolition Versus Immobilisation: How Vanuatu Handled the ShiftCopy link to section

The reform moved through two visible phases. Before 2016, the immobilisation model required bearer shares to be held by a custodian, but enforcement was absent and warrants sat outside the rule entirely; in 2016, the instrument was abolished outright, ending new issuance.

The external driver was FATF Recommendation 24. Revisions adopted in March 2022 require member countries to prohibit new bearer shares and bearer share warrants, and to convert or immobilise any that remain.

By acting in 2016, the jurisdiction moved ahead of that 2022 tightening, a sequence that points to its response to the 2015 APG findings. Public records retrieved do not confirm whether a formal custodian-licensing scheme operated between the initial immobilisation requirement and the abolition.

Custody and Immobilisation Requirements for Any Surviving Bearer InstrumentsCopy link to section

Because no new bearer shares may be issued after 2016, the question of custody now applies only to pre-2016 legacy certificates. Where such instruments survive, the expectation aligned with FATF standards is that they be immobilised with a licensed custodian who records beneficial ownership, or otherwise restricted.

Registered agents are obliged to maintain beneficial ownership records, and authorities can reach those records through proper legal process. Several practical specifics remain unclear in public sources, including the prescribed custodian class, the regulation number setting custody rules, penalties for non-compliant holding, and any fee schedule.

At the time of the 2015 APG evaluation, the regulator did not know the total number of bearer shares or warrants in issue, so no verified count of outstanding legacy instruments exists in the retrieved record. To establish what applies to a specific certificate, approach the VFSC or a licensed registered agent directly.

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Transition Rules for Legacy Bearer Shares and Conversion to Registered SharesCopy link to section

The precise statutory deadline, grace period, and conversion mechanism for pre-2016 certificates were not found in retrieved sources, which is a material gap. Some secondary commentary describes bearer shares as "largely phased out," wording that hints at unextinguished legacy instruments without confirming any official cut-off.

Under the original regime, conversion was permitted in both directions, so the mechanics of moving bearer holdings to registered form would follow the same path; whether a binding conversion deadline was legislated is unconfirmed. As a general principle, jurisdictions abolishing bearer shares typically required holders to surrender or convert certificates within a set window, after which the attached rights were suspended or extinguished. Confirm the Vanuatu provision with the regulator or against the primary legislation before assuming any outcome.

What This Means for Beneficial Ownership and Transparency ObligationsCopy link to section

Beneficial ownership data in Vanuatu is collected by regulators but is not open to the public. Privacy from the general public is therefore strong, while privacy from government authorities acting through proper legal process is limited.

Foreign tax authorities can obtain information through the Common Reporting Standard, FATCA, or tax information exchange agreements, and law enforcement can do so via mutual legal assistance treaties. The jurisdiction adopted CRS and implemented FATCA agreements across 2017 to 2018, strengthening its AML/CFT framework in the process.

The 2015 APG evaluation had described ownership information on international companies as extremely hard to obtain, with criminal-penalty secrecy provisions actively impeding competent-authority access. The reforms that followed, together with the March 2022 revision of FATF Recommendation 24 requiring accurate and current ownership data, set the direction away from that earlier position. The relevant body for ongoing AML/CFT assessment is the APG.

Practical Implications for Non-Resident Owners and AdvisersCopy link to section

Any structure marketed as offering newly issued Vanuatu bearer shares is non-compliant with current law. Treat such an offer as a warning sign about the provider rather than a genuine privacy feature.

To form an International Company, you must engage a licensed registered agent, who will collect KYC documentation such as passport, proof of address, and source of funds before filing with the VFSC. The company must keep records of its directors and shareholders, though those details are not placed on the public file.

Where bearer shares underpinned a legacy structure, confirm with a licensed agent whether immobilisation arrangements exist and what recordkeeping now applies. Ownership confidentiality rests on the non-public register, registered-agent obligations, and nominee shareholders and directors, which remain permitted within the AML and KYC framework, rather than on anonymous paper.

Outlook for Bearer Shares and Investor Confidentiality in VanuatuCopy link to section

Bearer shares as a working privacy tool are permanently closed. The 2016 abolition sits ahead of the 2022 revision of FATF Recommendation 24, so the jurisdiction already meets the prohibition-and-conversion standard that other regimes are still adapting to.

The wider trend points consistently toward transparency: CRS adoption, FATCA implementation, and continuing APG evaluation pressure all move away from instrument-level anonymity. A complete abolition is generally viewed more favourably under FATF Round 5 evaluations than an immobilisation-only approach, which leaves the jurisdiction in a defensible position on this point.

What remains is genuine tax exemption for international business and meaningful privacy from the public register, not secrecy. No scheduled next evaluation date or pending amendment to the Act on bearer shares was found in public sources.

ConclusionCopy link to section

Bearer shares no longer offer a route to anonymous ownership in Vanuatu, and any offer suggesting otherwise should be treated with caution. The residual privacy that exists comes from a non-public register, registered-agent confidentiality, and lawful nominee arrangements, all of which sit inside an AML framework that gives regulators and foreign tax authorities lawful access. If a legacy certificate is part of your structure, settle its status with a licensed agent before relying on it. For new formations, plan around registered shares and proper KYC from the outset.

How Expanship Can Help Your Business in VanuatuCopy link to section

Expanship helps foreign owners assess where bearer instruments leave a legacy structure, coordinate with licensed registered agents on the status of older certificates, and set up compliant registered-share arrangements that meet current beneficial ownership rules. The same team supports the wider needs of a foreign-owned International Company across its life cycle.

• Company incorporation and structuring for International Companies
• Licensed registered agent and registered office services
• Tax registration and filing where obligations arise
• Ongoing compliance and annual renewal management
• Accounting and bookkeeping for cross-border entities
• Introductions to banking partners

To discuss your structure, contact Expanship Vanuatu.

Frequently Asked QuestionsCopy link to section