Vanuatu citizenship by investment went through a significant change in 2022: the EU suspended visa-free access for Vanuatu passport holders following an audit of its CBI programme. The UK followed separately. This changed the programme's fundamental value proposition. It remains a legitimate, fast, and relatively straightforward route to a second passport — but the honest picture in 2026 is more nuanced than it was in 2019.
This page covers the real drawbacks alongside what the programme genuinely does well.
✓ What Still Works
- Fastest CBI in Asia-Pacific (~60 days)
- 90+ countries visa-free (Singapore, HK, SE Asia, LatAm)
- Remote process — no residency requirement
- Family included (up to 4 dependents per DSP fee)
- Vanuatu has no income tax for residents
- Stable programme since 1980
- Dual citizenship permitted
✗ Real Drawbacks
- EU Schengen access suspended 2022
- UK visa-free access removed
- DSP donation is non-refundable
- No tax residency without physical presence
- Banking friction with CBI passport
- Higher cost than some Caribbean alternatives
- Limited consular/diplomatic network
The 7 Drawbacks in Detail
1. EU Schengen and UK Visa-Free Access Has Been Suspended
This is the most material change to the programme. In 2022, the EU suspended visa exemption
for Vanuatu CBI passport holders after a formal audit found the programme posed risks to
EU security and financial integrity. The UK independently removed Vanuatu from its visa-free list.
As of 2026, a Vanuatu CBI passport requires a Schengen visa for EU travel and a UK visa for
UK travel. For applicants to whom EU or UK access is a priority, Caribbean programmes —
which retain Schengen access — are now more relevant.
2. The DSP Donation Is Non-Refundable
The Development Support Programme requires a non-refundable donation to the Vanuatu government.
Unlike the CIIP route (which includes a redeemable pledge component), and unlike some Caribbean
programmes that structure contributions as partially recoverable, the DSP donation is gone regardless
of outcome. Combined with the non-refundable due diligence fee, the financial exposure on a
rejected DSP application is substantial. This makes pre-screening particularly important.
3. No Tax Benefit Without Physical Residency
Vanuatu levies no income tax on foreign-sourced income for residents. However, citizenship
does not create tax residency. You must physically reside in Vanuatu and meet residency criteria
to access the tax framework. Simply holding a Vanuatu passport while living elsewhere does not
change your tax obligations. Under CRS (Common Reporting Standard), your financial information
is reported between countries regardless of your passport. The "zero tax" narrative associated
with Vanuatu only applies to genuine Vanuatu residents.
4. Banking Friction for CBI Passport Holders
Some international financial institutions apply enhanced due diligence to individuals holding
citizenship-by-investment passports from smaller nations. Opening new accounts or maintaining
relationships with certain private banks may require additional documentation or explanation.
This varies significantly by bank and jurisdiction, but is a documented practical consideration
— not a theoretical one — for some applicants.
5. More Expensive Than Some Caribbean Alternatives
Vanuatu DSP starts at $135,500 all-inclusive for a single applicant. Caribbean programmes
start lower: St Lucia from around $100,000, Dominica from $100,000, Antigua from $130,000.
Caribbean programmes are slower (~4–6 months vs ~60 days), but for applicants for whom
processing speed is not critical and who prioritise Schengen access,
a Caribbean programme may offer better value in 2026.
6. Limited Diplomatic and Consular Network
Vanuatu has a small number of embassies and consulates globally. In countries where Vanuatu
has no diplomatic presence, passport holders requiring consular assistance may need to
rely on third-country arrangements or local foreign ministry contacts. For frequent
travellers to regions with limited Vanuatu diplomatic coverage, this is a practical
limitation compared to a passport from a country with broader global representation.
7. Programme Stability Uncertainty
The EU suspension demonstrated that external pressures can change a CBI programme rapidly.
The Vanuatu government can also modify programme terms — fees, eligibility criteria,
approved investment routes — with limited notice. No CBI programme offers permanent
contractual guarantees. Applicants should factor in that the programme as it exists
today may differ from the programme in five or ten years.
Vanuatu vs Caribbean: 2026 Comparison
| Factor | Vanuatu DSP | Caribbean (avg) |
|---|---|---|
| Processing time | ~60 days | 4–6 months |
| Schengen visa-free | No (suspended 2022) | Yes |
| UK visa-free | No | Yes (most programmes) |
| Total cost (single) | From $135,500 | From ~$100,000 |
| Residency requirement | None | None (most) |
| Donation refundable | No (DSP) | Partially (some) |
| US E-2 visa access | No | Yes (Grenada) |
| Dual citizenship | Yes | Yes |
| Singapore visa-free | Yes | Varies |
| Programme maturity | Since 1980 | Since 1980s–2010s |
When to choose Vanuatu anyway
Vanuatu remains the right choice if: (a) speed is critical — ~60 days is unmatched globally among major CBI programmes; (b) your target destinations are in Asia-Pacific or Latin America, where Vanuatu's visa access is strong; (c) you are from a nationality where Caribbean programmes have additional barriers; (d) you need a second passport quickly for business or travel reasons unrelated to EU/UK access.
Not Sure Which Programme Fits You?
Our lawyers compare your situation against Vanuatu and Caribbean options — free, no commitment.
Book Free Consultation →Frequently Asked Questions
Five key drawbacks: (1) EU/UK visa-free access suspended 2022. (2) DSP donation is non-refundable. (3) No tax residency without physically living in Vanuatu. (4) Some banking friction with CBI passports. (5) More expensive than the lowest-cost Caribbean alternatives.
Vanuatu DSP starts at $135,500 all-inclusive (single applicant). Caribbean programmes start lower — St Lucia and Dominica from around $100,000. Caribbean is slower (4–6 months vs ~60 days). Vanuatu is priced for speed, not the lowest cost.
Only if you establish genuine tax residency in Vanuatu by physically living there. Citizenship alone does not change your tax obligations. CRS reporting still applies regardless of your passport.
Caribbean programmes retain Schengen and UK visa-free access, which Vanuatu lost. Caribbean processing is slower. Grenada adds US E-2 access. For speed: Vanuatu. For Schengen/UK: Caribbean.
Related articles:
Citizenship risks
Rejection reasons
Is it worth it in 2026?
Vanuatu vs Caribbean full comparison
Family cost breakdown
DSP vs CIIP explained
General information only — not legal advice. Visa-access arrangements, programme fees and
rules change. Verify current status with a licensed legal professional before applying.