Vanuatu: the EU confirms the suspension of Schengen visa-free access

Vanuatu enjoyed a short-stay visa exemption for the Schengen area, granted by agreement with the European Union. This exemption was the main selling point of its citizenship by investment programme.

The Union suspended and then called this exemption into question, citing shortcomings in the Vanuatu programme's checks and the security risks associated with the rapid issuance of passports.

The effect is measurable. The Vanuatu passport now gives visa-free access to only about 95¹ destinations, which puts it far behind Caribbean passports issued under comparable programmes.

The programme itself has not disappeared. The citizenship office still publishes its fees: a contribution of about $130,000² for a single applicant, plus $5,000³ in due diligence fees, i.e. $135,000⁴ in total.

We do not publish the exact date of the European decision or its precise legal basis: we were unable to verify them in an up-to-date official EU source. The current situation must be confirmed before any commitment.

Citizenship by investment rests on two elements of a very different nature. The nationality itself, which is acquired and in principle irrevocable. And the visa-free access it provides, which depends entirely on decisions taken by third countries.

The buyer pays up front for the second, but legally only buys the first. This is an asymmetry that commercial presentations never put this way, and the Vanuatu case makes it visible.

None of the Caribbean programmes is immune from a comparable decision. That is precisely why they have raised their thresholds and tightened their checks: Dominica now asks for about $200,000⁵, Antigua and Barbuda $230,000⁶ and Grenada $235,000⁷.

A second, less discussed effect concerns banks. A nationality obtained through a criticised programme becomes a risk factor in European institutions' compliance procedures, which makes opening accounts more difficult — the opposite of the intended effect.

A third effect affects those who had already acquired the passport. They keep their nationality but lose the use for which they had paid, with no recourse or compensation, and without the issuing state being able to do anything for them. This is the clearest demonstration that the buyer alone bears this risk.

The country retains a tax system without direct taxation: the rate applicable to corporate profits is 0%⁸, and the government investment promotion agency states that there is no income tax, capital gains tax or inheritance tax.

This advantage, however, requires actually living there, which remoteness, exposure to cyclones and weak medical infrastructure make demanding. The programme itself imposes no presence requirement.

There is also no tax treaty between France and Vanuatu, which deprives a taxpayer of any treaty mechanism in the event of dual residency.

For a French national, the Vanuatu programme therefore currently offers neither mobility, nor tax protection, nor easier banking. It is hard to identify a serious reason to consider it.

• Acquired nationality remains acquired; the visa-free access that made it attractive can be withdrawn.
• The Vanuatu passport has fallen to about 95¹ destinations, compared with about 154⁹ for Saint Kitts and Nevis.
• A nationality obtained through a contested programme makes opening accounts in Europe more difficult.
• Caribbean programmes have tightened their checks to avoid the same fate, with no guarantee of success.
• None of these schemes moves tax residency: that requires actually going to live there.

The general lesson applies beyond Vanuatu. When an advantage depends on a unilateral decision by a third party, it should not be valued as an asset: it should be treated as an option, whose price factors in the probability that it will disappear. Few applicants think this way, and it is the main source of disappointment in this category of spending.