Vanuatu creates a highly attractive business environment, primarily because of its favorable tax regime, which includes no corporate tax, no personal income tax, and no capital gains tax, this tax-friendly environment, combined with the country's political stability and strategic location in the South Pacific, makes it a prime destination for investors and businesses seeking to operate with minimal tax burdens.

Additionally, Vanuatu has streamlined the processes for obtaining business licenses and permits, further enhancing its appeal to foreign investors. The absence of exchange controls allows for the free movement of capital, and a stable banking system supports both domestic and international businesses​.

Vanuatu's government operates as a parliamentary democracy, seamlessly combining modern political structures with traditional Melanesian customs. Firstly, the President serves as the head of state, elected by an electoral college for a five-year term. Meanwhile, the Prime Minister, elected by the members of the unicameral parliament, acts as the head of government. The parliament, which consists of 52 members, is elected every four years by universal suffrage. Consequently, the political environment is characterized by multiple political parties, which often leads to coalition governments.

In addition, traditional chiefs and village councils play a significant role in local governance, ensuring that customary law and practices are integrated with the formal legal system. Ultimately, this blend of traditional and modern governance contributes to the country's political stability and social cohesion​.

Vanuatu gained its independence on July 30, 1980, thus marking the end of a unique colonial period during which it was jointly administered by both the British and French under the Anglo-French Condominium established in 1906. This dual colonial rule, often referred to as the "Pandemonium" due to its complex and frequently conflicting administrative practices, consequently led to significant nationalistic movements among the Ni-Vanuatu people.

Moreover, the independence movement was driven by the Vanua'aku Pati, led by Father Walter Lini, who eventually became the first Prime Minister of the newly independent Republic of Vanuatu. Notably, the transition to independence was largely peaceful, thereby symbolizing a new era of self-governance and unity for the islands.