The United Nations Conference on Trade and Development (UNCTAD) has released its World Investment Report 2025, calling for urgent reforms and strategic action to boost foreign direct investment (FDI) in developing economies. Vanuatu, as a small island developing state, stands at a critical juncture. While global FDI declined by 11%, the report highlights that many developing countries are being left behind not due to lack of potential, but because capital continues to flow where it’s easiest, not where it’s most needed.

To strengthen its position, Vanuatu is encouraged to pursue transformative measures such as accelerating digital transformation to attract investment in the digital economy, improving infrastructure to unlock institutional investment, streamlining business processes to enhance transparency and investor confidence, and clearly defining the role of FDI within its national development strategy.
The Vanuatu Foreign Investment Promotion Agency (VFIPA) welcomes the report’s findings and reaffirms its commitment to creating a more enabling environment for investment.

VFIPA’s Investment Promotion Strategy soon to be launched aligns with UNCTAD’s call for action, focusing on priority sectors such as tourism, agriculture, renewable energy, and digital services. VFIPA’s active engagement in Joint Information System (JIS) Initiatives, International Commercial Arbitration, and the Review of the Reserve and Restricted List of business activities exemplifies its commitment to reforming and enhancing the business environment. These efforts are further strengthened through VFIPA’s collaboration with strategic partners, whose long-term support through technical assistance and capacity-building programs is both acknowledged and deeply valued.

However, the investment landscape in Vanuatu is not without its challenges. Investors continue to face a range of barriers that hinder the full realization of their projects. These include unreliable airline connections, high costs of doing business, labor shortages and a lack of skilled workers, delays in government approvals, land access disputes, and inadequate infrastructure to support e-commerce and logistics. These issues have contributed to nearly 27% of active investments either not being implemented or operating below expectations. Addressing these challenges is critical to improving investor confidence and ensuring that Vanuatu remains a competitive and attractive destination for foreign capital.

“Investment is not just about capital flows; it’s about unlocking human potential and building a sustainable future for Vanuatu,” said Lorenzo Raplili, Manager Aftercare and Advocacy.

VFIPA encourages all stakeholders' government, private sector, and development partners to collaborate in implementing reforms that will position Vanuatu as a competitive and resilient investment destination in the region.