How we came to exist
The Vanuatu Investment Promotion Authority (VIPA) was established following a recommendation from the Comprehensive Reform Program (CRP) undertaken in 1997. The need to have an institution aimed at developing clear guidelines governing the promotion of foreign direct investment was a key component under the CRP strategic pillar – Improving the incentives for private sector growth and employment.
Vanuatu was at that time on the verge of bankruptcy. The Vanuatu Government had not much choice but to accept the CRP package in the hope of rescuing the country from the political, social and economic crisis with private sector led growth as the main focus. The CRP was made possible with assistance from the Asian Development Bank (ADB) and other international aid donors.
This saw the development and enactment of the Foreign Investment Act of 1998 CAP 248 to establish the Vanuatu Investment Promotion Authority to expeditiously facilitate, promote and foster foreign investment in Vanuatu. In fact the VIPA Act CAP  was one of the top 3 priority legislation’s recommended by the CRP.
Prior to the 1997-1998 CRP, processing and approvals of foreign investment applications were done by the Department of Trades and Industries. The Board responsible at that time was known as the Vanuatu Foreign Investment Board (VFIB). There has been too many red tapes during the process – resulting in a very costly exercise for a foreigner to do business in Vanuatu. The recommendation by the CRP for a separate and autonomous institution was to address this issue.
INSTITUTIONAL AND STRUCTURAL CHANGES
Between 1998 and 2008 – VIPA has its own act, but it is still operating under the Public Service Commission. Given the nature of the institution where private sector culture is critical, the need to be detached from the PSC becomes more necessary. In 2008, VIPA was detached from the PSC and fully became a corporate body, with a board of directors as its immediate employer. Annual grant from the Government remains the only source of income for the authority. Staff numbers began with 4 and have doubled since then with a 100% increase in its annual grant.
As in any organization, the need to excel and deliver on their missions requires effective leaders with clear visions and energy to drive strategies to achieve set targets. This has been a challenge for VIPA that saw 4 (four) different persons recruited for the CEO’s position since the establishment of the authority. New staff with formal qualifications have been recruited and the composition of the VIPA BOD has seen for the first time, a private sector representative who is a business man. Prior to this, the private sector representative has been the General Manager of the Vanuatu Chamber of Commerce and Industries (VCCI).
DEVELOPMENT OF NATIONAL INVESTMENT POLICY AND OTHER REFORMS
Under the CRP, the government’s national investment policy remains one of of the important framework providing for and encouraging foreign investment into Vanuatu. The first investment policy for Vanuatu was developed in 1996. However it was claimed that the work lacked widespread consultation or agreement on the content. The Vanuatu Investment Promotion Authority (VIPA), with the support of all Government institutions that deal with investment issues and the private sector, took the initiative to prepare the current Statement of National Investment Policy for Vanuatu. The Policy was launched in 2006.
VIPA ACT reviewed and processing of application streamlined
Vanuatu’s landscape for business has changed dramatically and to be able to compete in the increasingly and complicated globalized economy, the Vanuatu Investment Promotion Authority has undergone a number of critical reforms.
1. Review of the VIPA Act – [CAP 248] – now known as the Vanuatu National Investment Bill awaiting approval by Parliament.
2. Processing of Foreign Investment Applications improved – now improved by 100% – reduced time frame from 30 – 15 working days.
3. Business Requirements Processes Streamlined – all seven processes foreign investors need to follow to start a new business have improved their administrative processing time.
4. Further Reforms Anticipated – Impacts of the IFC work in addressing business regulatory frameworks in Vanuatu have been strongly positive. The high competitive nature of the FDI market means more reforms is necessary.
PARTNERSHIP PROGRAMS ESTABLISHED
Ensuring an effective FDI facilitation service is a role VIPA cannot do alone. This led to the introduction and establishment of partnership programs between government and private sector agencies. The introduction of VIPA’s advisory committee comprised of purely private sector business owners is to provide advice to the VIPA BOD on emerging and pressing issues. Especially issues which require some due diligence need to be done.
A recently (2016) signed memorandum of understanding between VIPA and VNPF (Vanuatu National Provident Fund) will ensure consistency records of foreign investors in both registry systems and allow data exchanges where relevant for reporting purposes. Compliance has been and remains a serious issues for both institutions and is believed this MOU will significantly contribute to addressing the matter.
Media has increasingly come to be an important tool of dissemination of information sector-wide. Recently (2016) VIPA and the Daily Post (DP) the most common local newspaper have agreed through a face-to-face discussion to strengthen collaborations through information sharing. The DP’s newly introduced Business Magazine will now see a column dedicated for VIPA to present information on foreign investment requirements in Vanuatu.
Externally, VIPA has maintained its traditional working partners such as PITIC investment promotion agencies in the region.