Doing Business in Palau

Doing business in Palau offers a straightforward regulatory environment with a simplified tax system. This guide provides an overview of the business environment, registration procedures, and key considerations for entrepreneurs and investors.

Business Environment

Palau's economy is driven primarily by tourism, fishing, and government services. The business environment is characterized by:

Simple tax system (GRT on gross revenue, no CIT on profits)
No VAT or sales tax
0% withholding tax on dividends, interest, and royalties
No social security contributions for private sector
English widely spoken in business
US dollar as official currency

Registration Procedure

The process of setting up a business in Palau typically involves:

Step 1: Business Name Reservation

Reserve the company name with the Palau Registrar of Corporations.

Step 2: Company Registration

File the articles of incorporation and required documents with the Registrar of Corporations.

Step 3: Tax Registration

Step 4: Business License

Apply for a business license from the appropriate government agency. Licenses are renewed annually.

Costs and Timeline

Name Reservation: Nominal fee
Company Registration: Approximately $200 - $500
Business License: Varies by business type
Processing Time: 2-4 weeks for full registration

Ongoing Compliance

Quarterly GRT Returns: Due within 30 days after each quarter
Annual Tax Return: Due by April 15
Business License Renewal: Annual renewal
Annual Report: Filed with the Registrar of Corporations

Employment Regulations

Minimum Wage: Federal minimum wage applies
Working Hours: Standard 40-hour work week
Holiday Leave: Public holidays as designated
No Social Security: No mandatory employer contributions

Foreign Investment

Foreign investors require Foreign Investment Board approval for certain sectors. Restricted industries include retail, some services, and land ownership.