More than 200 Palau islands are located on the western edge of the Micronesian archipelago, 700 miles west of the island of Guam, north of New Guinea and east of the Philippines. The land area of Palau is about 170 square miles.
The United Nations Trusteeship Mandate entrusted the administration to the United States in 1946. A formal constitution was adopted by the people of Palau in 1981. In 1994, the Republic of Palau became an independent country.
If you intend to open a business in Palau, the most significant incentives for this are its natural resources and low taxes. According to YB Case specialists, the local government encourages foreign investment, especially in the areas of improving the infrastructure, a tourism and the export industry. Deciding to register a company in Palau and to open an account in Palau, you need to know, that some industries, such as a wholesale and a retail, a land and a water, a diving, water sports, restaurant and resort businesses in Palau, must be operated by domestic Palau corporations.
However, there are no currency restrictions or controls on the islands
Registration of a company in Palau takes place mainly by type of corporations, although small and joint ventures are also welcome.
In order to set up a commercial firm in Palau, the corporation must submit an application and Articles of Association for approval by the registrar, a separate requirement is at least three participants.
Constituent documents must also contain:
- the name of the company;
- a location;
- a target;
- directors data;
- data of founders;
- property data;
- data on foreign ownership.
YB Case Help: In order to promote employment in Palau, the country has introduced an annual fee of $500, which is levied by foreign corporations for each non-local employee.
Taxes in Palau
- no income;
- an income tax is 4% is estimated from the gross proceeds of the enterprise; paid quarterly, within 30 days after the end of the quarter (in the case of financial institutions is 4% of net profit);
- a payroll tax is 6% of the first annual salary in the amount of up to $8,000 and 12% for amounts over $8,000;
- the employee social security tax (quarterly contributions) is 6% of first gross income in the amount of $5,000 salary per quarter.
If you decide to register a business in Palau, please note, that the licensing of certain activities in Palau, depending on the type, ranges from $50 (construction work) to $600 (legal activity).
Registering a business in Palau also provides for the opening a current account in Palau, which (if all documentation is available) will take 1-2 days.
If you decide to establish a company in Palau remotely or have established a company with a personal presence in Palau, experienced YB Case experts will provide support services in opening a company in Palau and (if necessary) assist you in setting up a firm in Micronesia.