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VFSC (Vanuatu Financial Services Commission)

Vanuatu is a small Pacific island nation which is well known for its offshore financial services. In recent years, it has become a popular destination for all sorts of Forex brokers who want to operate under a license but without considerable restrictions imposed by such jurisdictions as the United States, Europe, or Japan.

Vanuatu Financial Services Commission (VFSC) The Vanuatu Financial Services Commission (VFSC) is a government agency that regulates non-banking financial sector in Vanuatu and keeps the country's register of companies. The VFSC was established on December 20, 1993, based on the Vanuatu Financial Services Commission Act No. 35 of 1993.

Goals and responsibilities

  • Operate effective and efficient registry of companies, administering and collecting associated fees.
  • Protect public against financial loss and dishonesty.
  • Participate in the international arena in regards to supervision and regulation of the financial industry.
  • To assist and advise the government of Vanuatu in the matters of financial business and its regulation.
  • Promote the level of industry compliance.
  • Promote the country's financial industry overseas.

Who should get licensed by the VFSC?

Licensing requirements for financial dealers by the VFSC

  • A physical office in Vanuatu is required.
  • The source of funds for the company's capital should be certified.
  • The company must keep its records in Vanuatu, available for review whenever requested.
  • Compliance with AML requirements is a must.
  • A change of ownership or shareholding of 15% or more needs to be approved by the VFSC.
  • A deposit of at least 5 million VUV (approximately, 50,000 USD) needs to be kept at the VFSC.
  • A clear risk management policy should be presented on application.
  • At least one member of the company's board should substantial and recent experience in finance.
  • Appointed representative and other officers of the company should be insured against professional indemnity.
  • An independent approved auditor should be assigned should prepare audited financial statements.
  • A 3-year financial projection based on a business plan to be submitted with the application.
  • There is a one-time 50,000 VUV (approximately, 500 USD) application fee and a principal licensing fee of 100,000 VUV. International companies also pay $300 annual fee. The application review usually takes 3 weeks.
  • A licensed dealer must observe high standards of integrity and fair dealing in the conduct of its business.
  • Financial dealers should implement internal policies that impede any kind of market misconduct: market manipulation, misinformation and rumor-mongering, insider trading.
  • A licensed dealer has to install well-documented procedures for the processing of customer complaints.
  • A detailed prospectus should be issued on each of the financial instrument (product) offered by a regulated broker.

Powers at the VFSC's disposal

Publish notices of fraud certificates. In July 2021, the VFSC published a notice about fraud certificates of the financial dealer license used by 24 companies.

Issue a fine not exceeding 125 million VUV.

Revoke a license. On July 4, 2019, the Commission issued a notice about its intention to revoke the financial dealer license of Capital City Markets Ltd. The cited reasons are complaints of suspicious activity, problems with withdrawals, failure to respond to the Commission's letters.

Impose conditions on a license.

Financial Centre Association

Apart from the Vanuatu Financial Services Commission, you might encounter a mention of the Vanuatu Financial Centre Association (FCA). Established in 1993, the FCA isn't a regulatory body but a non-profit organization, which is registered with the FSC and represents members from banking, insurance, real estate, online trading, brokerage, financial dealing, accounting, business advisory, and legal industries.

The Financial Centre Association is working tightly with law makers, regulators, policy makers, and government to promote the position of Vanuatu as one of the leaders in the international financial arena. In other words, the FCA makes sure that the regulatory environment remains attractive to its members and that those members don't do anything stupid that would jeopardize Vanuatu's reputation as a financial center.

Membership in the Vanuatu Financial Services Commission is completely optional.

Financial Markets Association

Similar to the Financial Centre Association, the Financial Markets Association (FMA) of Vanuatu is a charitable organization licensed by the FSC. It is working as a self-regulatory organization (SRO) exclusively for financial dealer license holders in Vanuatu.

As is the case with the FCA, it is not necessary for a company holding a financial dealer license to become a member, however, this improves the possibilities for the company to influence future legislation for the sector and to work with other members on bettering of the Vanuatu as a jurisdiction for Forex broker regulation.

The FMA of Vanuatu was founded on October 9, 2020. As of September 22, 2021, the Association's membership is composed of 12 FSC-regulated brokers.


The Vanuatu FSC looks quite attractive from brokers' perspective as their licensing requirements are much simpler and cheaper than those in developed countries. At the same time, looking at the lack of serious regulatory enforcement notices signals the lack of serious oversight work, which is what retail Forex traders really need. Yet, it is evident that the country's FSC is doing steps in the right direction and is working on making its financial dealer license a viable alternative to many other offshore offerings.

If you want to share your opinion, observations, conclusions, or to ask a question regarding the Vanuatu Financial Services Commission (VFSC), feel free to start a discussion on our Forex forum.

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