Starting a Business · Palau
Starting a business in Palau: foreigner's guide (2026)
Palau shaded by its starting a business status
Foreign nationals wishing to do business in Palau must obtain a Foreign Investment Approval Certificate (FIAC) from the Foreign Investment Board, subject to a statutory minimum investment threshold of USD 500,000 and a requirement that at least 20% of the workforce be Palauan citizens. Several sectors are entirely reserved for Palauan citizens, and the end-to-end approval process can take up to 90 days after a complete application is submitted. A new online Corporations Act registry launched in January 2025 has modernised the domestic incorporation step, but the overall foreign-investment regime remains demanding.
Key points
No FIAC may be issued for a foreign investment of less than USD 500,000. This statutory floor is one of the most significant barriers for foreign entrepreneurs and is set out in the Foreign Investment Act Regulations published by the FIB.
The Foreign Investment Act reserves the following exclusively for Palauan citizens: wholesale and retail sale of goods, all land and water transportation, travel and tour agencies, land- and water-based tour service providers, handicraft and gift shops, bar services not forming part of a hotel or restaurant, and commercial fishing. Foreign investors are entirely barred from these activities.
Foreign investors must: (1) reserve a business name with the Corporate Registrar; (2) register the legal entity (now via the FIC's online portal, operative since 20 January 2025); (3) secure a premises agreement and any zoning approvals; (4) submit a FIAC application to the FIB with corporate documents (Articles of Incorporation, Bylaws, Stock Affidavits); and (5) register with the Palau Tax Service for a Tax Identification Number. Sector-specific licences may add further steps.
The Foreign Investment Board has up to 90 days from receipt of a complete application to issue or refuse a FIAC. This statutory window, plus pre-application steps, means the full foreign-business setup process typically spans several months.
At least 20% of a foreign-owned company's workforce must be Palauan citizens. Additionally, before hiring any foreign worker, employers must advertise the vacancy and attempt for 30 days to fill it with a Palauan citizen or permanent resident.
On 20 January 2025, Palau enacted a new Corporations Act and launched an online business entity registry managed by the Financial Institutions Commission (FIC), replacing the legacy paper-based process. This reduces friction for the domestic incorporation step but does not alter the foreign-investment approval regime.
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Last verified 5/25/2026 · Orientation, not legal advice - verify against the primary sources linked above. Explore the full world map →