Country overview

#108

Palau

Country stats

Rating Points

This indicator describes the overall rating of a given jurisdiction on several parameters according to cryptocurrency operations - market volume, crypto regulation, business climate, taxation framework.

Crypto Penetration

Estimated percentage of crypto users out of the country's total population based on public data.

Legal Entities

Number of crypto companies registered in the country based on regulator data if available or other types of public data.

Regulation Points

An overall assessment of the granularity of crypto regulation in a given country. A high score is also given to countries where cryptocurrency transactions are highly regulated.

Amount of crypto users

180

Total amount of crypto users out of the country's total population based on public data.

Taxation points

This figure, according to our analysts' calculations, indicates the overall level of tax burden for cryptocurrency transactions in a given country. The higher the indicator, the lower the burden.

Market volume points

A rough estimate of this jurisdiction's retail crypto market relative to the rest of the world. The higher the indicator, the higher the market potential.

Status of crypto

De facto

General status of cryptocurrency regulation in this jurisdiction.

Crypto payments

No regulation

The legal status of cryptocurrency payments for goods and services in a given country based on information from regulators, public data and feedback from our community.

Security Level

Safe place

The overall level of security in a given country based on open data.

Crypto Salaries

No regulation

The legal status of cryptocurrency salaries to employers in a given country based on information from regulators, public data and feedback from our community.

Business Climate

Medium

Overall assessment of the friendliness of this country for crypto-business. This indicator takes into account the cost of obtaining a license and the attitude towards crypto entities in the country.

Stablecoin Regulation

No info

This indicator is evaluating the regulation of stablecoins in a given country. Complex regulation means that it is possible to issue steiblcoins and obtain a license for this activity. Basic regulation means that the issuance of stablecoins is possible, but not all legal aspects are defined in the law. Standard regulation means that there is a legal practice of steylcoin circulation in a given country.

Bad Factors

This section describes the unfavorable economic factors for crypto-business in a given country. These are countries that are under sanctions or on the FATF grey list and other factors.

Types of licenses

No licenses exist

Good

Medium

Bad

intro

This is general info about crypto regulation in Palau. The more precise overview will be published later. However, if you find any inaccuracy or have other feedback - please write us in telegram @ilya_ii or by e-mail - editor@cryptopenetration.com

Palau is an island state in Oceania. Based on Wikipedia (1) it has an area of 460 km2 and a population about 18,000 people.

Based on Visa Guide (2) anyone except Bangladesh and Myanmar citizens can visit Palau without a visa. US citizens can live in a country up to 1 year without visa, EU residents - 90 days and most other nations - 30 days. Also it’s possible to renew an entry visa for a fee.

Palau also has a special digital residency program. Even Chanpeng Zhao (CZ) has visited (3) Palau in June 2022 and has welcomed this initiative. Palau digital card can be used for standard individual KYC procedures, financial services and also it’s possible to use for on chain verification. And it has a really affordable price - $248 for a year.

Based on Livemint (4) most crypto exchanges (90%) accept Palau’s documents for KYC purposes. And according to Guardian (5) most Palau’s digital identity card owners are based in the USA, China and EU.

Security level

Palau has a safe place security level according to our rating. It has only 33 from 100 crime points in Numbeo crime rating (6). The homicide level (7) is 11.2 per 100,000 inhabitants a year.

Crypto Payments

We have no information about crypto payments in Palau and their legal status. Please, contact us if you have such information.

Crypto Salaries

We have no information about crypto salaries in Palau and their legal status. Please, contact us if you have such information.

Legal

Palau is providing pro crypto and blockchain regulation policy. At the same time there is still no clear crypto regulation in the country. Since March 2019 local regulator Financial Institutions Commission (FIC) has initiated (8) a moratorium on crypto licensing in the country. In November 2019 this moratorium was confirmed by joint statement of FIC with Local Tax Authority. And according to IMF Report (9) in the end of 2023 this moratorium was still in force and supported by IMF.

In December 2023 The Ministry of Finance of Palau officially launched (10) Palau Stablecoin (PSC) program in partnership with Ripple and testing its CBDC platform. PSC is a stablecoin pegged to the US dollar, 1:1. There is a detailed official document (11) about this program published on the government website.

Moreover, in June 2023 local Financial Intelligence Unit has issued a notice (12) for VASPs operating the jurisdiction, that they need to register for AML purposes.

We have a lack of information on this matter, but probably there are no laws regulating cryptocurrencies and VASP activities in the country yet, and the notice was published as part of international agreements joined by the local FIU. It is likely that there are companies in the country that are de facto operate with cryptocurrencies but are not yet publicly registered as VASPs. This situation exists in some other offshore jurisdictions as well.

Taxation

Palau doesn’t have any tax for foreign source income of Palau eID holders according to e-residence FAQ (13). Based on Orbitax (14) a gross revenue tax (GRS) in Palau is 4% from the company's revenue. According to the government website (15) GRS is applied for foreign source income of persons or legal entities, which are not registered as GST taxpayers. And GST is levied only on local goods/services with a 12% tax rate. So it looks like a company/person can choose whether to pay 4% from foreign revenue or 12% from local income. Probably crypto income in the country is tax free as a foreign income or is levied by GRS tax.

Links

1)👉🏻Palau. Wikipedia

2)👉🏻Visa in Palau

3)👉🏻Binance wants to make the “Palauan Dream” come true Island Business

4)👉🏻A crypto side door… Livemint

5)👉🏻‘Trojan horse’: Palau’s bid to become global crypto hub could turn it into scammers paradise, critics warn

6)👉🏻Crime in Palau Numbeo

7)👉🏻List of countries by intentional homicide rate

8)👉🏻Palau holds firm on cryptocurrency moratorium IPD Forum

9)👉🏻Palau Report IMF

10)👉🏻Palau advances CBDC… Cointelegraph

11)👉🏻Ministry of Finance Republic of Palau Stablecoin Program

12)👉🏻Virtual Asset Service Providers Palau's FIU

13)👉🏻RNS FAQ

14)👉🏻Palau Orbitax

15)👉🏻Message from the tax reform committee chair… Palaugov

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intro

Palau is an island state in Oceania. Based on Wikipedia (1) it has an area of 460 km2 and a population about 18,000 people.

Security level

Palau has a safe place security level according to our rating. It has only 33 from 100 crime points in Numbeo crime rating (6). The homicide level (7) is 11.2 per 100,000 inhabitants a year.

Crypto Payments

We have no information about crypto payments in Palau and their legal status. Please, contact us if you have such information.

Crypto Salaries

We have no information about crypto salaries in Palau and their legal status. Please, contact us if you have such information.

Legal

Moreover, in June 2023 local Financial Intelligence Unit has issued a notice (12) for VASPs operating the jurisdiction, that they need to register for AML purposes.

Taxation

Links

1)👉🏻Palau. Wikipedia

2)👉🏻Visa in Palau

3)👉🏻Binance wants to make the “Palauan Dream” come true Island Business

4)👉🏻A crypto side door… Livemint

5)👉🏻‘Trojan horse’: Palau’s bid to become global crypto hub could turn it into scammers paradise, critics warn

6)👉🏻Crime in Palau Numbeo

7)👉🏻List of countries by intentional homicide rate

8)👉🏻Palau holds firm on cryptocurrency moratorium IPD Forum

9)👉🏻Palau Report IMF

10)👉🏻Palau advances CBDC… Cointelegraph

11)👉🏻Ministry of Finance Republic of Palau Stablecoin Program

12)👉🏻Virtual Asset Service Providers Palau's FIU

13)👉🏻RNS FAQ

14)👉🏻Palau Orbitax

15)👉🏻Message from the tax reform committee chair… Palaugov