Tourism brings in much-needed foreign exchange. Vanuatu is widely recognized as one of the premier vacation destinations for scuba divers wishing to explore coral reefs of the South Pacific region. Tourism increased 17 % from 2007 to 2008 to reach 196,134 arrivals, according to one estimate, and has been promoted, in part, by Vanuatu being the site of several reality television shows. The ninth season of the reality TV series Survivor was filmed on Vanuatu, entitled Survivor: Vanuatu — Islands of Fire. Two years later, Australia’s Celebrity Survivor was filmed at the same location used by the US version.
Financial services are an important part of the economy. Vanuatu is a tax haven that until 2008 did not release account information to other governments or law-enforcement agencies. International pressure, mainly from Australia, influenced the Vanuatu government to begin adhering to international norms to improve transparency. In Vanuatu, there is no income, withholding, capital gains, or inheritance tax and no exchange control. Many international ship-management companies choose to flag their ships under the Vanuatu flag, because of tax benefits and favorable labor laws (Vanuatu is a full member of the International Maritime Organization and applies its international conventions). Vanuatu is recognized as a “flag of convenience” country. Several file-sharing groups, such as the providers of the KaZaA network of Sharman Networks and the developers of WinMX, have chosen to incorporate in Vanuatu to avoid regulation and legal challenges. In response to foreign concerns the government has promised to tighten regulation of its offshore financial centre.
In 2015, The Heritage Foundation and The Wall Street Journal ranked Vanuatu the 84th most economically free country.