Vanuatu Financial Services Commission (VFSC)

Overview of Vanuatu Financial Services Commission (VFSC)

The Vanuatu Financial Services Commission (VFSC) serves as the primary regulatory authority for non-banking financial services in Vanuatu. Established under the Vanuatu Financial Services Commission Act No. 35 of 1993, the VFSC operates as an autonomous government agency responsible for maintaining the national registry of companies while regulating and supervising financial activities outside the banking sector.

Historical Background

The VFSC traces its origins to 1971 when it functioned as the Registrar of Companies under British administration. Following Vanuatu’s independence in 1980, these responsibilities transferred to the Ministry of Finance and Economic Management until the commission’s formal establishment in December 1993. A significant milestone occurred when the VFSC successfully implemented FATF’s action plan, resulting in Vanuatu’s removal from the greylist in June 2018 after being listed in February 2016.

Legal Authority and Regulatory Framework

The VFSC derives its authority from multiple legislative instruments including the Financial Dealers Licensing Act, Prevention of Fraud (Investments) Act, Companies Act, and Anti-Money Laundering regulations. The commission aligns its operations with international standards while adapting to emerging financial trends, as evidenced by its 2021 introduction of cryptocurrency licensing after initially banning crypto dealings in 2019.

Core Functions and Regulatory Scope

The VFSC maintains four primary operational departments: Corporate Services, Legal Enforcement & Insolvency, Supervision, and Registration. Its key responsibilities include:

• Licensing and supervising financial dealers including forex brokers
• Maintaining the official registry of companies and business names
• Implementing anti-money laundering (AML) and counter-terrorism financing measures
• Protecting investors through compliance monitoring and enforcement actions
• Promoting Vanuatu as an international financial jurisdiction

Licensing Requirements for Financial Dealers

Entities seeking VFSC regulation must meet several criteria including:

• Maintaining a VT 5 million (approx. $50,000) deposit with the commission
• Establishing physical office presence in Vanuatu
• Submitting certified financial records and three-year business projections
• Appointing experienced directors and maintaining professional indemnity insurance
• Complying with AML requirements and implementing complaint handling procedures

Contact Information

The VFSC operates from two main offices:

• Port Vila Headquarters: Companies House, PMB 9023, Rue Bougainville, Port Vila
• Santo Branch: Millennium Building, PMB 05, Luganville Santo

Primary contact channels:

• Phone: +678 22247 (Port Vila) / +678 36454 (Santo)
• Email: [email protected] (registration matters) / [email protected] (general inquiries)

Operating hours follow standard government schedules with midday closures, closing at 3pm on Wednesdays and remaining closed weekends.

Verifying Regulated Entities

To confirm a company’s VFSC regulatory status:

1. Obtain the company registration number or name from their official materials
2. Access the Financial Dealers Licensee list through the VFSC website
3. Search using the identification details (Ctrl+F function recommended)
4. Cross-check license numbers and registration details with the broker’s claims

The VFSC maintains authority to impose fines up to 125 million VUV, revoke licenses, or publish fraud notices against non-compliant entities.

Notable Regulatory Features

The VFSC offers several distinctive characteristics as a regulatory jurisdiction:

• Relatively low capital requirements compared to major jurisdictions
• Expedited licensing process typically completed within 2-3 months
• Tax advantages including no income, capital gains, or inheritance taxes
• Permits high leverage up to 1:1000 for retail forex trading
• Requires physical presence but allows international operations