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Vanuatu’s Strategic Move: Introducing the CIIP-CNO Future Fund Citizenship Option

citizenship in Vanuatu

Recently, the European Union (EU) has scaled up pressure on countries providing citizenship by investment (CBI) programs to reconsider restructuring such schemes or abolishing them altogether. The EU primarily cites increased risks of insecurity, money laundering, and tax evasion, noting that most CBI frameworks do not obligate the beneficiaries to reside permanently in their destination countries.  

As multiple countries that operate citizenship by investment programs are somewhat tied to the European Union, it was only a matter of time before such nations responded to the EU’s concerns. And the response has been fast and furious.  

Several countries, including the United Kingdom, Ireland, the Netherlands, and Spain, have since discontinued their second citizenship schemes. Others, such as the Dominican Republic, Portugal, and Vanuatu, have opted to restructure their CBI frameworks to align them with emerging international concerns.  

Vanuatu recently announced a new option to its citizenship by investment program known as the CIIP-CNO Future Fund.  

Pundits already predict that this new approach to the Vanuatu citizenship by investment program will be a game changer in attracting foreign investment into the country. But as you’re about to find out, the CIIP-CNO Future Fund also promises immense perks to investors. 

citizenship in Vanuatu

Introducing the CIIP-CNO Future Fund 

Like several countries, Vanuatu has a citizenship by investment scheme created to attract foreign investment. That program is known as the Vanuatu Capital Investment Immigration Plan, commonly abbreviated as CIIP

However, Vanuatu recently added a new route to its CIIP plan in an apparent move to address international pressure to discontinue its second citizenship program. The new option is known as the Coconut Oil Future Fund, or the CNO Future Fund.  

Like other options within the CIIP framework, the CNO Future Fund grants citizenship in Vanuatu to qualifying beneficiaries. However, it stands out in its dual approach, which requires applicants to make direct, mandatory and fully-redeemable investments into the country’s renewable energy sector.

More About the CNO Future Fund 

Vanuatu is presently the only country offering a citizenship by investment program in the Pacific region. But of more interest is its recently unveiled CNO Fund, which seeks to stimulate coconut oil production for electricity generation. It’s one of the country’s most strategic initiatives in the immigration and renewable energy industries.  

Those interested in Vanuatu citizenship by investment through the CNO route make a donation of USD 165,000 to the fund. The amount covers a family of four, including the primary applicant. It’s then split into two parts – USD 115,000 as a mandatory one-time contribution and USD 50,000 as a fully-redeemable investment into Vanuatu’s renewable energy industry.  

Not only does the scheme grant direct citizenship in Vanuatu to eligible applicants, it also promises a hefty return on investment (RoI).  

Why The CNO Future Fund? 

Four primary factors inspired Vanuatu’s decision to unveil the CNO Future Fund, as expounded below: 

1. Quest for Clean Energy 

The introduction of the CIIP-CNO Future Fund was in line with Vanuatu’s quest to achieve 100% renewable electrical energy generation by 2030. It’s arguably the country’s most ambitious climate adaptation policy in recent years.  

The new route to the Vanuatu citizenship program will position this tiny South Pacific island country among the world’s top agitators of clean energy. If properly implemented, the CNO second citizenship investment scheme will draw the nation closer to its 2030 Net Zero Goals.  

While many nations continue to champion climate change from the sidelines, Vanuatu has opted to stand up and be counted. The CNO Future Fund is evidence of the country’s strategic foresight in addressing future demand for renewable energy. It also underscores a dire need to agitate for sustainable energy production on the global stage.  

Further, considering Vanuatu’s high susceptibility to climate change, the CNO is a welcome initiative.  

But why the insistence on coconut oil?  

Emerging research has shown that coconut oil is a reliable substitute for diesel. 

It’s worth noting that all of Vanuatu’s electricity generation plants in Port Vila currently run on diesel generators.  

Diesel fuel emits numerous toxins when it burns. As a matter of fact, diesel-powered vehicles account for a significant emission of particulate matter and ground-level ozone erosion.  

Comparatively, coconut oil is safer and more eco-sustainable.  

Through the CNO Future Fund, Vanuatu aims to gradually eliminate its reliance on fossil fuels. The fund will notably appeal to climate change-conscious investors.  

Vanuatu’s abundance of coconut palm trees provides it with a head start in its quest to shift from diesel- to coconut oil-based energy production. Besides, the country has a long-held tradition for extracting dried coconut contents, known as copra. Copra is essential in coconut oil production. 

2. Need To Redefine the Global CBI Landscape 

Citizenship by investment programs were fundamentally introduced to drive inward foreign investment into the participating countries. While these schemes promise some economic perks to potential beneficiaries, they do not guarantee real return on investment.  

The Vanuatu government saw a massive gap in CBI frameworks and sought to capitalize on it. The recently unveiled Vanuatu investment citizenship route not only promises to ramp up the country’s foreign income but also provides interested applicants with a chance to benefit directly from their investment.  

According to Daniel Agius – Chief Executive Officer (CEO) of the Vanuatu Investment Migration Bureau (VIMB) and CNO architect – the CNO initiative will yield hefty RoI to investors by allowing them to acquire redeemable preference shares. Investors only need to partner with a Vanuatu-registered company and tie down their shares to a 5-year mandatory holding period.  

Once the 5-year term lapses, CIIP investors will redeem their shares via the CNO route and receive their initial net investment amount. They’ll also be entitled to any accrued capital appreciation during the holding period.  

Agius notes that the CNO Future Fund has no dividend policy. However, he’s quick to point out its favorable annual capital appreciation rates, which he claims presently stand at a minimum of 5%. 

It’s also exciting to know that CNO investors can exit this Vanuatu citizenship investment plan after recouping their RoI and gaining full citizenship. That’s certainly a step up from the country’s other CBI routes. 

Global CBI Landscape

3. Response to EU’s Growing Concerns 

Vanuatu is a Commonwealth nation, which implies that its immigration programs are closely linked to those of the United Kingdom and the European Union in general. 

But as already indicated, the global citizenship by investment landscape has shifted significantly following the EU’s growing concerns on implementing these programs. Mounting fears of insecurity and financial crimes have necessitated several countries to wind down or restructure their CBI schemes.  

It’s against that backdrop that Vanuatu also opted to introduce the CNO Future Fund to its CIIP program.  

The Future Fund seeks to change global perspectives of citizenship through investment schemes.  

International regulatory bodies like the EU will no longer view Vanuatu’s CBI program merely as a transactional route to second citizenship. Rather, the focus will be on the country’s quest to attain clean energy, which perfectly aligns with the United Nations’ (UN) sustainable development goals.  

4. Addressing National Concerns 

Besides international pressure to restructure its citizenship by investment program, Vanuatu’s decision to introduce the CNO Future Fund was also a response to domestic pressure. The country has experienced major political shifts recently, resulting in over three coalition governments.  

As with most nations, Vanuatu’s political tensions were largely due to allegations of economic inequality and corruption. 

Since the CNO Future Fund provides an extra incentive for second citizenship seekers, the scheme promises to increase foreign investment into Vanuatu. The onus will be on the government to channel the funds into programs that can empower Vanuatuans economically.  

Policymakers have implored the current and subsequent governments to minimally restructure the CNO program to make it appealing to foreign investors, particularly Vanuatu’s near neighbors, such as Australia and New Zealand.  

Experts observe that the program must convince the international community to change its perception of Vanuatu with a view to drawing more climate-conscious investors into the country.  

Other CIIP-CNO Benefits 

1. Visa-Free Travel 

Like other second citizenship routes in the CIIP framework, the CNO Future Fund option provides Vanuatu citizenship to qualifying applicants.  

Vanuatu passport holders enjoy visa-free or visa-on-arrival travel to over 100 countries.  

2. Lucrative Tax Incentives 

Vanuatu is famous for its favorable taxation policies. The Pacific island nation is incredibly tax-friendly to foreign investors.  

Below are some of the tax incentives you stand to enjoy by investing in the recently unveiled CNO Future Fund: 

  • Exemption from personal income and corporate tax 
  • Exemption from capital gains and withholding tax 
  • Exemption from wealth, estate, gift, and inheritance tax 

The absence of withholding tax means CNO investors retain 100% of their accrued capital appreciation. Similarly, exemptions from personal income and corporate tax will favor foreigners wishing to pursue other income-generating activities in the country besides their CNO investments. 

3. Comparative Affordability 

At USD 165,000, the CIIP-CNO Future Fund is one of the most affordable citizenship by investment programs in the world. Besides, it’s comparatively cheaper than similar programs provided by various Caribbean countries.  

In the wake of sustained pressure from the European Union, four Caribbean countries with citizenship by investment programs have pledged to hike their golden visa prices to a minimum of USD 200,000, effective June 30, 2024. The four nations are the Dominican Republic, St. Kitts and Nevis, Grenada, and Antigua and Barbuda.

While some might have expected Vanuatu to follow suit, the country pulled a surprise by introducing the more strategic and affordable CNO Future Fund.  

By increasing their CBI rates, the above Caribbean countries expect to solidify their trade and immigration partnerships with the European Union. Conversely, that move will shift the spotlight to other nations that offer cheaper programs, notably Vanuatu.

The promise of real RoI further makes the CIIP-CNO scheme more attractive.

Pacific island

4. Fast and Straightforward Process 

The entire process of applying for Vanuatu’s CNO Future Fund can be completed online.  

Like other options in the CIIP package, the Vanuatu government doesn’t require you to appear for physical interviews. There’s no requirement to pass language proficiency tests or possess professional experience to be eligible, either.  

5. No Stay Conditions 

Even after acquiring the Vanuatu passport and subsequently obtaining full citizenship through the CNO Future Fund, it’s great to know that there are no stringent residency demands.  

You remain a Vanuatu citizen without having to spend a particular amount of time in the country. 

6. Family Inclusion 

Another noteworthy perk of Vanuatu’s CIIP-CNO Future Fund is its provision for secondary applicants.  

The program lets you tag up to four relatives in a single application. You only pay an additional fee for any further dependents.

How to Apply For the CIIP-CNO Program

1. Submit the requisite documentation 

Vanuatu citizenship by investment requirements are generally similar to all the CIIP options except for the fees.  

The one cross-cutting requirement is to complete an initial application form. In this form, you’ll indicate your personal details and those of any dependents.  

Other Vanuatu citizenship requirements include:  

  • A copy of your valid passport
  • A police report 
  • Medical certificates 
  • Proof of financial resources. 

Remember to submit all documentation through authorized agents, as Vanuatu doesn’t process direct CNO applications.  

2. Let the government conduct its due diligence 

After providing the required documents, allow up to 14 days for the government to validate the submissions.  

Pay the CNO amount plus the applicable fees 

If you’re preapproved, you’ll need to pay the required investment amount plus any agent fees. Submit proof of the payment and wait for final approval within 1 – 2 months.  

Take the oath 

The final step is taking the oath of allegiance. If you’re located overseas, you can have the oath administered physically in Vanuatu or virtually.  

It’s upon taking the oath that you become a full citizen. You can now enjoy Vanuatu passport visa free privileges and other citizenship perks. 

Relying On the Experts 

Vanuatu maintains a fairly straightforward second citizenship application process. However, you can expedite the process by working with a professional. 

At Abode Options, we take pride in assisting our clients in obtaining second citizenship by handling all the legal and logistical challenges. 

Whether you’re seeking to acquire Vanuatu citizenship or desire safe passage to the EU through the Portugal Golden Visa program, our team of experts is ready to assist you. 

Vanuatu citizenship

The Bottom Line

For many countries that provide citizenship through investment programs, the emphasis has always been on attracting inward foreign investment. However, Vanuatu sought to upset the status quo by adding the CIIP-CNO Future Fund to its second citizenship scheme.  

Not only will the future fund spur growth in one of Vanuatu’s most promising economic sectors, but its dual approach makes it attractive to foreign investors seeking to put their money into sustainable projects.  

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