Publication One /2018
Business Planning;
Success or Failure

VIPA Presence inSanto

VIPA Application
Changes

INVESTMENT

Insight

A bi-annual publication by VIPA

Planning for Success; The Importance of Business Plans
Vanuatu’s appeal as an attractive tourist
destination in the South Pacific has in equal
opportunity brought in many foreign investors
established here today. It is quite common tofind that many foreign investors establishedboth in Port Vila, Luganville and other outerislands were once visiting tourists who had
fallen in love with the country either for its
beauty, its people, easy going lifestyle or all of
the above!
Yet as beautiful and laid back as it may come,a small and growing country like Vanuatu
presents numerous challenges when thetourist becomes the trader. This is where theimportance of planning, planning and moreplanning comes into effect. One that VIPA
strongly encourages current or prospective
business adventurers to take heed.
Onaverage
theCertification
andImplementation Division of the Authority
registers approximately 100 new andapproved foreign investment applications
in a year. For new investor’s information on
the necessary steps to undertake (a totalof seven) are provided in order to establish
their business presence in Vanuatu. Theseseven steps include registering at VFSC, VIPA,and residency permits with Immigration. It

also applying for business license and VAT,
applying for a work permit from labour, if theinvestor wishes to recruit foreign workers andregistering with VNPF.

by 2030. Nevertheless it is a key document ofimportance in which investors should consult
with to understand the Government’s focus
especially in terms of creating employmentand providing opportunities to up-skill theworkforce. Other key documents to consider
for research are Ministerial Policies such as theAgriculture Sector Policy by the Ministry for
Agriculture, Industry Policy by the Ministry for
Trade and Industry and other relevant policy
with regards to the economic sector that theinvestor is investing in.

For a Foreign Investment Approval Certificate(FIAC) a new investor is required to provide
key supporting documents including a police
clearance from their country of origin andpassport copies. These supporting documents
are provided with an investor’s business plan.
This plan should detail the bulk of market
research any investor has done to support
their business proposal in the country.
Competitive labour rates
In its population structure, Vanuatu’s youth
Marketgroup makes up 60% to 70% determining aAccording to 2016 statistics data the population young and strong work force. Its history withof Vanuatu sits at 270,402. In comparison to its England and France colonial rule resulted in
Melanesian neighbours Vanuatu has a small Vanuatu’s bilingual flare boasting a French
population yet the country holds one of the and English workforce, a plus for investors
highest population growth rates in the South all over. Vanuatu’s competitive labour rates
Pacific at an annual rate of around 2.2%. This also make it a sound choice for investment
determines potential for Vanuatu’s future for foreigners. It is therefore essential thatin FDI. More people will mean increased any new investor willing to invest in Vanuatu
demand in goods and services consumption should liaise with the Department of Labourand further opportunities for export. Vanuatu’s and the Vanuatu National Provident Fund
tourism industry has opened up numerous (VNPF) on any matters relating to employment
opportunities for investments that focuses and workers’ rights and benefits. The VIPA
on a range of target markets from overseas. Act directly enforces and supports a key
Apart from the obvious accommodation and government policy which is for employment
food services targeted at tourists, Vanuatu’s creation through FDI. Therefore it is essential
tourism industry has more opportunities for that an investor’s business plan provides
developing specific products to attract realisticandachievable
employment
targeted tourist groups. This is an area where and training avenues in the course of theirinvestors may want to look into as possible investment.
investment projects to kick start in the country.
Risk Management
Government Policies
It is always important in any business plan toFor the newcomer, it is important that you include a risk management strategy for theunderstand the Vanuatu Government’s obvious reasons of risk mitigation but morenational plans and the strategic direction that importantly to demonstrate that you arethe Government is moving towards. Vanuatu’s aware of the risks that may likely occur incurrent national plan is the “National the course of implementing your investment
Sustainable Development Plan 2030” also proposal. Vanuatu’s geographical locationcoined “The People’s Plan”. Focused on 3 key is quite ideal for the budding investor, sitting
pillars (Society, Environment & Economy), the within reasonable distance from key markets
plan outlines key targets and objectives that in Australia, New Zealand and Fiji. However it is
the Government’s Ministries, Departments also ranked as a highly disaster prone country
and supporting authorities should achieve in the world. In 2015 when the Category 5

tropical cyclone Pam hit Vanuatu, a lot ofbusinesses in Vanuatu suffered. It is therefore
crucial that you understand the businessenvironment and its risks in Vanuatu before
committing to your investment project. Being
one of the Pacific’s strong financial centre,
Vanuatu has a number of well-establishedinsurance companies that can assist in yourrisk management strategy.

1

Business
Planning

Organization
Structure &Training Plan

3
Financial
Statement &Projections

Business Plan
Summary&Overview

2MarketResearch& Risk
ManagementStrategy4

VIPA Reforms
The VIPA Management is currently making
changes to its application forms and has
formulated a draft business plan template
to make it easier for investors to understandwhat is needed from them through theinformation that they provide. The illustrationon the left depicts key information that has
now been incorporated into the business plan
template formulated by VIPA. This ensuresthat VIPA wholly understands the investmentthat is being proposed and the direct benefits
through its financial value, employment
creation and skills retention practices.
Vanuatu like any other small and growing
Pacific nation offers various challenges thatcan be difficult to overcome especiallywithout a plan that will provide guidance.
Through careful market research and proper
planning an investor can be better preparedin carrying out their investment in the country.
Despite these challenges any investor
intending to invest will be sure to affirm that
Vanuatu offers a unique doing businessclimate with an abundance of opportunities
that should boost economic growth.

VIPA Santo Office to reopen in July
Investors in SANMA can be pleased to hearthat the VIPA Branch office in Luganville will
be reopening its doors for good. With an
appointed staff currently undertaking training
in Port Vila, foreign investors in Santo can
now have their applications processed andchecked in Santo from July onwards.

VIPA Networking & Partnership
Engagements

VIPA Investment Promotion team met with A/
DG Shing and his Directorate on the 18th of May
to discuss closer working relations between thetwo key offices. The meeting, a follow up on
previous ones held between some heads ofMALFFB Departments was significant in termsof paving the way for better communicationand information sharing between the offices
Ms Alexine John is VIPA’s new Regional and identifying key work priorities that should
Investment Promotion Officer having worked and will be addressed by both parties inwithin the Department of Cooperatives for order to strengthen foreign investment in thewell over 20 years. Ms John will be playing an Agriculture, Forestry, Fisheries and Livestock
active role in application appraisals and also sector in Vanuatu.
in aftercare services.
It was clear through the meeting that
Vanuatu’s agriculture sector needed foreign
investment through value adding activities
however genuine FDI should come throughwith close scrutiny of investors’ plans andbusiness activities. This would mean VIPA andMALFFB must work closely to identify ways inwhich price control issues over farmers andsmallholders will be best addressed, promoting
fairness. The meeting also saw a number of key
agriculture products through FDI put forward:• Milk Dairy
Since its establishment in 1998, VIPA has had • Aquaponics (Combination of Hydronics
no permanent presence in SANMA provinceand Aquaculture)of where ___% of current FDI are active. This • Feed mills (E.g. production of hay throughgap has long been raised as a major concern
wild peanut plant and other feed mills forfrom both investors and key governmentcattle)
departments on Santo.
• Horticulture• Production of extra virgin coconut oil,With VIPA’s permanent presence on Santococonut by products
investment and investor issues can also • Bamboo processing and value adding g.
be dealt with at first hand through positive
Processing of seasonal fruits.
response actions. Moreover a presence in • Processing and value addition of timber
the Province will mean that first hand data for • Smallholder strengthening.
sector and province profiling for SANMA andkey Northern provinces can be produced for VIPA looks forward and welcomes as suchthe purposes of attracting FDI into other parts with the MALFFB and other key Governmentof Vanuatu.
stakeholders. Government determines policythat will guide private sectors and investors toVIPA is confident that Ms Alexine John will be follow allowing fair play in the market.
a useful asset to the Authority in helping bringabout these long due changes.

Developments within VIPA
VIPA’s efforts to establish a conducive business progress of securing an international expert tocontinue through various developments that work on the policy. A local consultant for thehave been happening internally.
Invsetment Policy has already been secured.
The delay in securing an international expert
VIPA Draft Investment Billfor this exercise will see the further delay into
The VIPA National Investment Bill has been achieving a full draft of the policy which may
reviewed by the State Law Office and will be happen in 2019.
shared with the public for final reviews andconsultations that will carry out. This will give VIPA Aftercare Service
it ample time for final input before it goes to In promoting assistance and aftercare, VIPA
Parliament in the last session of Parliament for must do more walk of the talk. This will mean
2018.
more time should be allocated to actual site
The Bill is a longstanding issue that needs to be visits on investment activities especially forfinalized in order for the Authority to run with those that are already in existence in Vanuatu.
a legislation that is best fitting for the current VIPA will begin aftercare and site visits fromdoing business environment that the country Quarter II onwards and will send out notices
is now going through.
to the investors to inform them beforehand.
This will be a great opportunity for investors
National Investment Policy
to express any grievances and concerns andThe National Investment Policy for VIPA is in share stories with the VIPA Team.

Doing Business Ranking Vanuatu’s Performance

Contact us today:
Vanuatu Investment Promotion Authority
PMB 9011
Tamarama Building
T: 24441/24096
E: investment@vipa.org.vu
W: www.investvanuatu.org

Investment Insight is a bi-annual publicationof VIPA that will be released twice a year
in addition to the Quarterly Newsletter
Publications that will be made in eachquarter of the year. It is part of VIPA’s
information sharing and awareness on FDI
issues happening in and out of Vanuatu.