The Vanuatu group of islands was discovered by Europeans in 1606 when the Portuguese explorer Pedro Fernandes de Queirós working for the Spanish Crown, arrived on Espiritu Santo, and called it La Austrialia del Espiritu Santo or “The Southern Land of the Holy Spirit”, thinking he had arrived in Terra Australis or Australia. Europeans did not return until 1768, when Louis Antoine de Bougainville rediscovered the islands. In 1774, Captain Cook named the islands the New Hebrides, a name that lasted until independence.
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 tax, withholding tax, capital gains tax, inheritance tax, or exchange control. Many international ship-management companies choose to flag their ships under the Vanuatu flag, because of the tax benefits and favorable labor laws (Vanuatu is a full member of the International Maritime Organization and applies its international conventions).
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. Vanuatu receives foreign aid mainly from Australia and New Zealand.